A St Helens job recruitment consultant says employment services need to be run by the government rather than for profit after a Senate Inquiry found Jobactive was detrimental to job seekers, particularly in regional areas.
Kylie Wright has seen people cut off from their payments for failing to meet Centrelink reporting obligations once, including the homeless, people without access to phones or internet, and those who miss their meetings due to their volunteer commitments.
In some instances clients have hitchhiked from Mathinna and Mangana to avoid missing appointments and having their payment cut off.
Ms Wright said the compliance system - introduced in July last year - placed the onus on punishing rather than helping the unemployed.
"One of the biggest problems is distance. People on lower incomes might not have a car, or reliable access to transport," she said.
"In the past, I was able to ring clients if they were unable to attend appointments.
"With the new system, I'm not allowed to ring people. We just have to immediately cut off their payments.
"I came into this work thinking I would be able to help people. I no longer feel that way - I feel like I'm punishing people."
Job service providers now have the power to cut off payments through a demerit point system.
A Senate Inquiry into Jobactive, which reported last week, found 42.5 per cent of participants had demerit points resulting in payment suspensions.
The Inquiry found Jobactive was "not welfare to work, it is welfare to nowhere". It also found examples of unemployed people being cut off their benefits due to administrative errors, and punishments for job seekers were "grossly unfair" and "punitive".
The $7.3 billion system, established by the Coalition Government, has resulted in 1.2 million "job placements", but it was unclear if these had resulted in people moving off income support or if they were just short-term placements.
Ms Wright - who has taken stress leave as a result of the changes - said the profit motive was not the right approach.
"These individual operators need to be eliminated, and we go back to the model run by the government, with no profit, so the service is there on a real and meaningful level," she said.
"Because it's about profit, it dictates which person gets sent to which vacancy based on how it'll make the provider money."
Australia was one of the first OECD countries to contract out its employment services, and was the only country to completely outsource the entire delivery of employment services.
The inquiry was chaired by Labor.
The government released a dissenting report, outlining that 81.5 per cent of Jobactive participants were still in employment three months after their job placement.
"Coalition Senators note that the committee has largely delivered a report which does not present any value-add beyond the extensive work program currently underway," the dissenting report reads.
Jobactive is due to be reviewed in 2020.
Prime Minister Scott Morrison told The Examiner the government would look for improvements.
"We always look to improve how we do everything," he said.
"Our government has been a jobs government."