The department of Human Services has boosted a pay offer to its 35,000 public servants and backed down on some tough bargaining conditions in a fresh bid to settle its ongoing wage dispute.

But the main workplace union, the CPSU, says it is not impressed and that DHS employees are still being asked to accept a "bad deal".

The union says the new offer is proof that its campaign of industrial action is hitting the mark, but it still "falls well short of being a fair deal".

The department has followed other agencies in offering a 1.5 per cent a year pay rise, following a softening earlier this year of the government's strict instructions to departmental bosses on wage rises and conditions.

A demand for longer working hours and changes to carers' and other leave entitlements have also been dropped, the department said on Thursday.

DHS's pay row has become the focal point of the broader dispute engulfing the public service with both major political parties weighing in at various times in the past 12 months

The previous pay offer, made in February, offered about 4.15 per cent, but with nearly a quarter of the pay rise linked to the success of efforts to streamline the department's manager-to-worker ratio.

But DHS's general communications manager Hank Jongen​ confirmed on Thursday that a new deal had been tabled during talks with unions.

"The department is now offering a general pay increase of 4.5 per cent over the three-year life of the new agreement, with 1.5 per cent per year in 2015, 2016 and 2017," Mr Jongen said.

"Following staff feedback, this offer is no longer conditional on the department maintaining a workforce profile staffing ratio of one executive-level staff member to every nine APS-level staff."

The senior executive said the new deal also retained some of the salary advantages, available to some DHS public servants, that were in the previous enterprise agreement which expired in June 2014.

"The July 2015 pay offer also includes a performance-based salary advancement for eligible staff of 1.5 per cent per year in 2016, 2017 and 2018," Mr Jongen said.

"Under the 2011-2014 agreement, those staff who are eligible will also receive up to 2.75 per cent salary advancement in 2015 - before the proposed start of the new enterprise agreement in September this year."

Mr Jongen said the new approach had been adopted in reaction to workers' reaction to the February offer and after using some of the flexibility allowed under the softening, announced in April, of the government's tough public sector bargaining conditions.

"In addition, the Australian Public Service Commissioner advised in April he was able to consider a broader range of productivity initiatives than before," Mr Jongen said.

"Many conditions in the 2011-2014 agreement have been maintained, such as keeping working hours at the current level of 37.5 hours per week and retaining the existing accrual of … leave."

The CPSU was quick to react on Thursday, telling members in a bulletin that there was a lot wrong with the new offer, saying it contained changes to rostering that would make it harder to balance work and family life, cut part-time rights and hit the union's ability to represent its members.