More than two-thirds of welfare recipients say Jobactive has not been useful in helping them find employment.
A survey of more than 4000 Australians over the age of 15 also found nearly three-quarters of respondents had not met with a Jobactive provider in the last year.
WA jobseeker Chad says he has to beg the service to help him.
"I have tried to speak to the Jobactive agents about failure and rejection but they don't ever give you hope or make you feel optimistic," the 24-year-old said.
"Instead they just say 'thanks for coming to your screening today, see you next month'."
To keep their unemployment benefits job-seekers have requirements such as attending meetings with service providers and applying for 20 jobs a month.
A Senate committee recently described the scheme, which is already under review by the government, as "not fit for purpose" and said it wasn't helping people on welfare find work.
The government says Jobactive helps Australians find work by connecting them with employers and providing tailored assistance while finding employment.
The survey also found 80 per cent of respondents who have been unemployed long-term are suffering from depression or anxiety.
Close to 90 per cent said unemployment was either a factor, or the main factor, towards their mental health.
Job-seeking app Found Careers' Andrew Joyce, who commissioned the study, says the unemployed aren't benefiting from Jobactive.
"We believe that Jobactive is simply failing to keep up with the way that millennials engage with the world," he said.
"Technology will need to develop rapidly and play a much larger part in this sector in the future."
Australian Associated Press
