23/01/2017 9:55 AM AEDT | Updated 23/01/2017 12:37 PM AEDT

Centrelink Admit Review System Too Slow To Save People From Fake Debts

Average dispute takes 49 days to resolve. Debts are due within 28.

Centrelink has admitted its review system to dispute debts is too slow to save people from false debts, taking an average of 49 days to resolve despite debts being due within 28 days.

The welfare agency's controversial automated debt recovery data-matching system has come under fire for months, with countless claims from clients that debts levelled are too high or just plain false. However, as we've reported, clients are still being told to pay their debts -- which can be in the many thousands of dollars -- even if they know them to be false to avoid extra debt recovery fees to be added to their bill.

Centrelink clients can ask for their debt to be reviewed as part of an internal dispute process, but that is unlikely to give them any immediate relief as the debt recovery process is not paused (with some exceptions) while the review is conducted. Debts are due within 28 days of the debt notice being received, and anecdotal reports have previously stated the dispute process can take up to six weeks.

Now, in response to questions from The Huffington Post Australia, the Department of Human Services admitted Centrelink's dispute process takes a full three weeks longer than the time limit to pay back that debt.

"The time taken to finalise a formal review depends on the complexity of the individual case. For the financial year to date, the average time to finalise a review in relation debt decision was 49 days," Department of Human Services general manager Hank Jongen said in a statement.

"The standard approach is to recover a debt where it is owed even if there is a review of decision underway."

Brett, a man from Sydney, received a $2360 debt from Centrelink which he is disputing. Centrelink staff told him that the timetable for his debt repayments would not be altered, even though he was disputing the debt.

"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?"

The department admitted that it has the power to pause the debt recovery timetable if it chooses.

"In relation to the online compliance activity, we recognise some people are former welfare recipients and their address may have changed. If the person can demonstrate letters have been sent to old addresses and can provide an updated address, the department can suspend debt recovery action until the review of the decision is complete. People can request a review of their debt at any time," Jongen said.

It also said clients would be repaid their money if debts were found to be incorrect or false.

"If the debt amount is reduced or overturned as a result of the review, and the person has paid too much, any overpaid amounts will either be credited to any other outstanding debts the person may have, or be refunded to them as soon as possible," Jongen said.

Jongen did not give an indication to how long it would take for incorrect debt payments to be returned to clients.