More than one million Australians - many of them on programs such as JobSeeker - are required to see privately owned employment services providers under a $2 billion-a-year scheme aimed at getting more people into paid work.
But the system has been plagued with claims of unfair suspensions from support payments.
Workplace Minister Amanda Rishworth will outline a three-tiered system for people who are dealing with Workforce Australia as they try to find a job.
She says the move will be a big change from the current approach where all job seekers are triaged in the same way.
"A one-size-fits-all approach, across all elements of Workforce Australia, is letting too many participants fall through the cracks and creating inefficiencies in the system," Ms Rishworth will tell the National Press Club in a speech on Wednesday.
Service Stream One will be the lightest touch: a digital service for people who are ready to work.
Under Service Stream Two, private providers will help participants build skills and confidence to return to the job market, while Service Stream Three is reserved for people with complex barriers to work who need intensive support.
Ms Rishworth will also flag changes to mutual obligations, a requirement for job seekers to accept any work they're offered and attend interviews or training services.
"The second change is the introduction of effective, fair and proportionate mutual obligations, that are reflective of an individual's distance from the labour market and are designed to actually help people get a suitable job," she will say.
The mutual obligations system has been roundly criticised, including in two Commonwealth ombudsman's reports which have found the suspension of many people's welfare payments for failing to meet their jobseeking requirements may have been unlawful.
The scheme is designed to ensure welfare recipients are actively searching for work, but advocates claim it punishes people who have complex needs and may struggle to find a job.
Ms Rishworth will flag further discussions with job seekers, employers, providers and communities as the government fleshes out its reforms.
