Employment Minister Michaelia Cash says the new intern program for jobless youth unveiled in the budget will have accident cover — but it is yet to be arranged.

Budget Estimates has heard the Commonwealth's workers compensation scheme will not cover the Youth Employment Package, unveiled in the Federal Budget.

But Senator Cash said while it was a decision for the Federal Government, she anticipated participants in the program would be protected by the time it starts in April 2017.

"There are laws whether your party is in government or whether this party is in government in relation to health and safety."

"Whatever it is, whether it's state laws or not, those laws are what Commonwealth and states and employers have to abide by."

Estimates heard they would not be eligible for workers compensation, because they were not technically employed, in a statement seized on by unions.

Officials from the Department of Employment said there were also laws in most states that covered volunteers and work experience participants.

A government spokesman said they anticipated there would be personal accident insurance and combined liability insurance by the time the scheme was up and running.

Program will be an alternative to Work for the Dole

Under the scheme, participants would undergo six weeks of training, compulsory after five months of receiving Newstart, and then be offered a place in a voluntary internship program with a business.

Interns would then be paid an extra $200 a fortnight on top of the Newstart Allowance, and would not be penalised if they refused to participate. They would work up to 25 hours a week.

The voluntary internship program will be an alternative to Work for the Dole, which will now be made compulsory after a year of receiving unemployment benefits.

Unions say the program amounts to paying interns $4 an hour.

Government officials said participants would not be paid an hourly rate, but instead provided $200 a fortnight, as a top-up to Newstart, regardless of how many hours a week they would work.

Workers would also not be required to pay for safety gear, with the additional payment to be exempt from any income tests.

Budget Estimates also heard employers would be monitored to ensure employers were not misusing the scheme, by firing interns after the program had finished and hiring new ones without offering new jobs.

Department Secretary Renee Leon said while there would be no limit to the number of internships, employers would also have to demonstrate a reasonable prospect of ongoing work to qualify for the PaTH program.

A total of $751 million has been pledged over four years to pay for the internship scheme.