12/01/2017 2:25 PM AEDT | Updated 12/01/2017 3:30 PM AEDT

Centrelink Clients Told To Pay Debts, Even If They're Wrong

Dispute process takes up to six weeks, but debts need repayment before that.

Centrelink is telling clients to pay debts even if they're wrong

Centrelink clients are being told to repay their alleged debts, even if they are incorrect or in dispute.

Brett, a man from Sydney, told The Huffington Post Australia last week how Centrelink had levelled him with a $2360 debt for a time before he had ever even applied for welfare. Speaking further to HuffPost Australia on Thursday, Brett said he had been told by Centrelink staff to begin paying his debt, even though he was disputing it.

"I went to an office, told them my story and the receptionist put me on the phone to someone. I thought it was a little funny, because I'd tried calling maybe 50 times in the last few days," Brett said.

"I spoke to a lady who confirmed my suspicions, that there's nothing that can be done about the debt before a lengthy review process plays out."

Brett recently received a letter saying he had been overpaid from February 1, 2013 to October 26, 2016. The problem, Brett said, is that he didn't apply for Centrelink until mid-February 2013 and didn't receive his first benefits until March of that year.

Part of the correspondence sent to Brett, saying he was overpaid from February 1, 2013 - before he even applied for Centrelink

Brett said the Centrelink employee told him that he would need to start repaying the debt to avoid further penalties, including a 10 percent penalty if the amount is referred to debt collectors. Centrelink said that if the debt was found to be incorrect, the money would be returned.

"The most harrowing part was being told that even though I've got only three weeks left to pay back the debt, the review takes six weeks and that I need to start paying it back in the meantime. It's not like they put it on hold while they're conducting this review, they just expect you to start paying it back while it's ongoing," Brett said.

"They told me even though I'm disputing this, all the rules are still in place and I need to start paying it back. They said they would reimburse me if I'm correct and the debt is false."

The Department of Human Services has been approached for comment.

Centrelink told him the timetable for him to repay the debt would not be altered.

"It seems fair that when you're disputing something, they put it on hold while it's being resolved. If a problem is discovered in a plane, they don't send it back in the sky while they find out what's wrong, they ground the plane," he said.

"It's only more hassle for them to pay me back the money I paid for a false debt. Why not stop it and work it out?"

Getty Images

Brett said Centrelink did not give further specific information about how or when the money would be returned if his dispute was successful. He signed up to a payment plan, reaching agreement to pay $50 back per fortnight.

"If it takes six weeks, that $150, so if I don't get it back, that's not much. It's like damage control, in case I don't get it back," he said.

Despite the issues he has faced -- being hit with a debt he says he does not owe, being told to start paying back the debt anyway, spending hours on the phone and in Centrelink offices to sort out the situation -- Brett said he's trying to stay positive.

"Although I'm still quite disenchanted with the entire system, I'm ready to put my faith back in them to fix the situation. I'm happy the wheels are in motion, something might be being done about this now, even though I cant see the behind the scenes work," he said.

"I've lodged a claim, started a payment plan. What else can I do? It's not the best circumstance but it's out of my hands now."

"I'm lucky I'm in a situation where I'm working and can start paying them back bit by bit until they resolve it and pay me back. I feel for a lot of people who aren't as lucky as me, in this situation where they work out whether to pay back money they don't owe or they look after their kids, with a debt collector sent after them."