Human-centered Artificial Intelligence (HCAI) is a term frequently used in the discourse on how to guide the development and deployment of AI in responsible and trustworthy ways. Major technology actors including Microsoft, Apple and Google are fostering their own AI ecosystems, also providing HCAI guidelines, which operationalize theoretical concepts to inform the practice of AI development. Yet, their commonality seems to be an orientation to commercial contexts. This paper focuses on AI for public services and on the special relationship between governmental organizations and the public. Approaching human-AI interaction through the lens of social contract theory we identify amendments to improve the suitability of an existing HCAI framework for the public sector. Following the Action Design Research methodological approach, we worked with a public organization to apply, assess, and adapt the “Google PAIR guidelines”, a well-known framework for human-centered AI development. The guidelines informed the design of an interactive prototype for AI in public services and through this process we revealed gaps and potential enhancements. Specifically, we found that it’s important to a) articulate a clear value proposition by weighing the public good vs. the individual benefit, b) define boundaries for repurposing public data given the relationship between citizens and their government, c) accommodate user group diversity by considering the different levels of technical and administrative literacy of citizens. We aim to shift the perspective within human-AI interaction, acknowledging that exchanges are not always subject to commercial agreements but can also be based on the mechanisms of a social contract.