Services Australia chief executive Rebecca Skinner told a Senate estimates hearing Centrelink was 500 employees short of staffing numbers they were funded for, with wait times for customers ballooning.
Between July 2022 and the end of January this year, the average waiting time for Centrelink calls was just over 18 minutes, up from about 14 minutes during 2021/22.
While waiting times were four minutes during 2020/21, staffing levels at the government department were significantly boosted during the height of the pandemic.
Ms Skinner said call time performance was less than optimal.
"The agency has also ... struggled, similar to other large businesses, and we currently find ourselves in our service delivery space several hundred people short of where we could be," she said.
"We have had a larger demand, I think, partially coming out of changed economic circumstances."
The highest wait times for Centrelink included the families and parenting line as well as youth and students.
Trade Minister Don Farrell told the hearing the government was concerned about staffing levels within Services Australia, following cuts from the previous government.
"We are seeking to try and address those issues in a range of ways and we'll continue to do that," he said.
Ms Skinner said a recruitment drive was under way in order to keep up with demand.
Figures also show 25 million calls were made to Centrelink between July 2022 and January 2023.
Of those, more than 8.3 million were answered, while more than five million received congestion messages.
Senator Farrell hit out at the previous government for reducing staffing numbers at Centrelink, which fell by more than 3500 between 2016 and 2020.
He told estimates the reduction had increased the burden for staff at the agency.
"It is little surprise when you reduce the workforce as the former government chose to do and requirements increase at the same time, extreme pressure on telephony will occur," he said.
While officials said call congestion was taking place on social security and welfare lines, there had been an uptick in calls to Services Australia in regards to the PBS and childcare subsidies.
Services Australia chief operating officer Russell Egan said a high turnover of staff at the department was also contributing to shortages.
"Dynamics are pretty tight at the moment and competition for talent is something that I think a lot of organisations are working through," he said.
"Post-pandemic, I think across most workplaces are seeing quite a high rate of churn in the labour market so Services Australia is not unique."
The department brought in 800 new staff members in January, with another 400 so far in February.
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