Tens of thousands of Australians may be eligible for refunds after unknowingly overpaying their Centrelink debts, with some continuing to make automatic payments even after their balances were cleared.
Services Australia has confirmed that it is investigating around 44,000 cases where customers paid more than they owed, with refunds yet to be processed.
A spokesperson for the agency said, “Of these records, 50% of the potentially owed refunds are less than $50, 80% are under $500, and 2% are $5,000 or more. In most cases, when people overpay their Centrelink debt, we refund the money or transfer the balance to another debt if one exists.”
They added that while hundreds of thousands of refunds are correctly processed each year, there have been instances where the correct procedure was not followed, resulting in outstanding refunds.
Overpayments often occur when customers forget to cancel automatic BPAY payments, which can only be stopped by the individual, or when their debt amounts are later reduced after a review or submission of tax returns.
Refunds will begin to be issued from late October 2025, with affected customers to be contacted via phone or letter.
However, advocates have raised concerns about the broader issue. Economic Justice Australia CEO Kate Allingham told 7NEWS.com.au that the current system fails to provide transparency for vulnerable Australians.
“There is no easy way for people to see how much their Centrelink debt is, how much they’ve paid, or what’s still owing,” she said. “Unlike most debts, Centrelink doesn’t issue regular statements, and people have to rely entirely on being informed by the government when their debt is paid. This needs to change.”
Allingham also criticized the government’s handling of social security administration, saying the system has become so complex that it struggles to operate lawfully and effectively.
“The Commonwealth government is supposed to be a model litigant, yet it continues to act unlawfully without adequately addressing systemic failures,” she said. “If the government makes an administrative error, the responsibility should be on them to fix it — not on the individuals already placed in vulnerable situations due to that error.”
