As part of the reforms – aimed to save the Morrison Government up to $1.4 billion over four years – the Jobactive program will be rebranded and replaced with an online employment services scheme.

The government said under the new model the most “job-ready job seekers” would “self-manage their return to employment” through a “digital services contact centre” while job seekers who were unemployed for more than six months would be referred to job service providers.

It said the digital process would simplify service registration and referral processes and reduce wait times for job seekers to start receiving reemployment services support.

It follows a trial of the digital scheme in South Australia over the past two years.

Kristin O’Connell from the Unemployed Workers Union said changes would create “two classes of unemployed” and enable job agencies to thrive.

“Right now, job agencies don’t make a lot of money from a person in the first six months that they’re unemployed. So even if you are with a job agency and you find a job in the first couple of months they don’t make a lot of money,” she said.

“That payment is tied to the length of time you’re unemployed.

“The government is helping job agencies by taking away the people they don’t make money from and making sure they really only have to deal with the people they make a profit from.”

Under the cost-saving measures to the social security program, the government will also no longer backpay new job seekers.

South Australian Council of Social Services CEO Ross Womersley said the new measure demonstrated the government was not interested in appropriately supporting vulnerable people into work.

“The government continues to adopt an approach to the most vulnerable people that is quite harsh and is problematic. It’s not about supporting people who are having a very hard time, it’s about harassment and punishment again,” he said.

“Currently people have their payments backdated to their first engagement with the job system.

“Under the new arrangement … people will use the digital platform to lodge a job plan and it’s only once that job plan is lodged that people will become entitled to access their payment.

“On the back of that, the government is expecting it will save an average of two days of payment for every person, because they think it will take that long for them to actually go through that process of completing that job plan.”

Axing back-payments is expected to save the government about $191.6 million over four years.

Womersely said the savings did not take into account the struggles many job seekers had engaging with Centrelink digital platforms.

“We all know that the Centrelink system, like many of the government’s platforms can be incredibly hard to work with and we also know that many of the people that we’re talking about don’t have access to affordable technologies that enable them to make these interactions with ease,” Womersley said.

As part of its broader welfare changes the government has also announced it will implement a four-year waiting period to people granted permanent residency under its Newly Arrived Resident’s Waiting Period from January 1, 2022.

Currently, wait periods for new residents depend on the welfare payment and visa types – with a maximum of two years wait period for people on an Orphan Relative or Remaining Relative visa.

The changes brings the wait period in line with the current four-year wait period requirement for new migrants applying for Austudy and Jobseeker payments.

Womersely criticised the measure, which was expected to save the government $671.1 million over five years.

“It’s shocking in all sorts of ways. These are people. And we should be wanting to welcome them into Australia and it’s unacceptable that we are being unwelcoming,” he said.

“This has to be one of the nastiest things in the whole budget.”