Revealed: some Australians have overpaid their Centrelink debt by more than $20,000 | Centrelink

Nearly 44,000 Australians who owe money to Centrelink have overpaid their debt, Guardian Australia has revealed; some for $20,000 or more.

It is the latest in a series of scandals to hit Centrelink after hundreds of thousands of people had their payments illegally cancelled; Several reviews concluded that the benefits system was not operating legally, and the government announced plans to launch at least three remediation processes for separate problems: automatic debt class action, revenue sharing and overpaid debts.

Economic Justice Australia, briefed on the overpayment issue by Services Australia, said the average amount was about $5,000, although some overpayments were in the tens of thousands.

“They found 44,000 overpayments,” said EJA chief executive Kate Allingham.

“Some overpay as much as $20,000 or more, some as little as $1.”

_{Sign up: AÜ Breaking News email}

Allingham said overpayments had been made through automatic deduction for “a long time” but the issue was related to the training of staff.

“This was due to a procedural error when staff did not follow the last step in a manual process to finalize outages,” he said.

“This is not an automated process; there was an internal procedural error.”

A spokesperson for Services Australia said in a statement that there were a number of reasons why debts were overpaid in the first place; These include customers failing to cancel direct debits such as BPay, customers repaying debts which are later reduced following review, Family Tax Benefit debts being reduced after the customer submits several years’ worth of unpaid tax returns in one go, and Centrelink’s failure to contact customers.

The spokesperson disputed that the average amount was $5,000 and instead said, “50% of refunds potentially owed are less than $50, 80% are less than $500, and 2% are $5,000 or more.”

The spokesperson said they process “hundreds of thousands of refunds like this every year” but in this case the correct process was not followed. They said they would contact everyone affected to refund overpayments.

“There is nothing people need to do now. We are contacting affected people from late October 2025,” the spokesperson said.

Allingham said the government should “take responsibility” for the overpayment and not blame benefit recipients.

“This is an administrative error by the government,” Allingham said.

“And what we want to see is that they really take a proactive approach to fixing this mistake, and that the onus is not on the Social Security recipient or the payer to do all the work necessary to get that money back.”

Edwina MacDonald, acting chief executive of the Australian Council of Social Services, said it was “the latest in a series of breaches of the Social Security Act” by successive governments.

“We are deeply concerned by the number of systematic failures in enforcing the social security law,” MacDonald said. “People’s payments were unlawfully cancelled, too many debts were paid and people’s rights were miscalculated.”

He called on the government to improve the system so it does not “entrench poverty” and subject people to “harmful subordination”.

“If governments can learn anything from robodebt, it should be to treat people with respect and dignity, which means eliminating social security payments to cover essential costs and redesigning our social security system to be fair and humane.”