Approximately 44,000 Australians who have a debt with Centrelink have overpaid it, some by $20,000 or more, Guardian Australia can reveal.
It is the latest in a string of scandals to hit Centrelink after hundreds of thousands of people had their payments illegally cancelled, with several reviews concluding the welfare system is not working legally and the government announcing plans to undertake at least three remediation processes for separate issues – the robodebt class action, income apportionment and overpaid debts.
Economic Justice Australia, which has been briefed on the overpayment issue by Services Australia, said while some overpayments are in the tens of thousands, the average amount was about $5,000.
“They have found 44,000 overpayments,” Kate Allingham, the chief executive of EJA, said.
“Some, up to $20,000 or more in overpayment, and some as little as $1.”
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Allingham said the overpayments had been made by automatic deduction “for a long period of time” but the issue was related to staff training.
“It was caused due to a procedural error where staff were not following the final step in a manual process to terminate deductions,” she said.
“This is not an automated process; there has been an error in terms of the procedure within the agency.”
In a statement, a spokesperson for Services Australia said there were several reasons debts may be overpaid in the first place, including customers not cancelling automatic payments such as BPay, customers who paid back debts that were later reduced following a review, Family Tax Benefit debts that have been reduced after the customer lodged several years of outstanding tax returns at once and Centrelink not being able to contact customers.
The spokesperson disputed that the average amount was $5,000, instead saying “50% of the potentially owed refunds are less than $50, 80% are less than $500 and 2% are for $5000 or more”.
The spokesperson said it processed “hundreds of thousands of refunds like this every year” but in this case, the correct process was not followed. They said they would be in touch with everyone affected to refund the overpayments.
“There’s nothing people need to do right now. From late October 2025, we’re contacting impacted people,” the spokesperson said.
Allingham said the government needs to “take responsibility” for the overpayment, and not blame welfare recipients.
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“This is the government’s administrative error,” Allingham said.
“And so what we want to see is that they’re taking a really proactive approach in terms of fixing that error, and that the onus is not on the social security recipient or the person that has been repaying the debt to do all the work to recover that money.”
The acting chief executive of the Australian Council of Social Services, Edwina MacDonald, said this was “the latest of several breaches of the Social Security Act” by successive governments.
“We are deeply concerned about the number of systemic failures in implementing social security law,” MacDonald said. “People have had their payments unlawfully cancelled; people have paid too much in debts, and people’s entitlements have been incorrectly calculated.”
She called on the government to improve the system so it did not “entrench poverty” and subject people to “harmful compliance”.
“If governments are to learn anything from robodebt, it must be to treat people with respect and dignity, which means lifting social security payments so they cover basic costs and redesigning our social security system so it is fair and humane.”
