The federal welfare agency has sent debt notices to thousands of people across Australia in recent months in an attempt to reclaim overpayments – some dating back several years.

But many people have claimed they have been mistakenly issued debt notices demanding thousands of dollars, with the Department of Human Services saying they have to begin paying back their debts while their appeal is reviewed.

“Particularly for a person on a low income, any sign that the government might be coming after them to recover a substantial amount of money is enough to make your stomach turn,” Hunter MP Joel Fitzgibbon said.

“The situation has been made worse by a large number of people who have been wronged by this ridiculous debt recovery system.

“It’s always acceptable for the government, on behalf of the taxpayer, to recover money from those who weren’t entitled to it. The problem here, of course, is they’ve been incompetent in their attempts to do so.

“Not only are they going back a long way, they are making mistakes and hunting down people who seemingly have no debt to repay.”

A new computer system that allows Centrelink to compare its clients’ details with Australian Taxation Office records allowed the government to begin reclaiming overpayments.

Fairfax Media has been contacted by numerous Hunter residents in the past week who claim they have been mistakenly targeted by the claw-back, with debt notices reaching as high as $48,000.

In a column for Fairfax Media, Paterson MP Meryl Swanson said it was unfair for the government to approach alleged debts “with such a heavy hand”.

“Now, no one is saying that debts that are owed to Centrelink should not be repaid. Sometimes genuine mistakes are made,” she wrote.

“But the way the government has gone about it is disgraceful. 

“People are reporting to my office that it is impossible to talk to someone at Centrelink about the debt – that phone wait times are long, and that people are bounced from department to department.

“There is no question that the Centrelink system can be difficult to access, particularly as the government continues to withdraw services from shopfronts and directing clients to an imperfect online system.

“Many have come to my office for help, and the same is the case in local members‘ offices throughout Australia. The frustration is palpable.”

Last week, Fairfax Media reported that Human Services Minister Alan Tudge defended the claw-back and said the government had recouped more than $300 million in overpayments so far.

Centrelink letter fury

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