Hunter residents caught up in controversial Centrelink debt collection issue

STUNG: Hunter residents are among those nationwide who claim to have incorrectly been issued a debt notice from Centrelink. Picture: Nick Bielby
STUNG: Hunter residents are among those nationwide who claim to have incorrectly been issued a debt notice from Centrelink. Picture: Nick Bielby

A Metford man has slammed the federal government after he received a letter from Centrelink telling him he owed thousands of dollars, saying the situation was “a debacle”.

Danny Gilligan is one thousands across Australia who believe they have been wrongly targeted by the welfare agency, which has drawn widespread criticism in recent weeks as similar stories have emerged.

Mr Gilligan, 41, collected government benefits for about six weeks in 2013 after his employer laid him off due to a lack of work. During that time, Mr Gilligan declared the $216 income he received while training for a new job – so he was surprised when he received a letter from Centrelink demanding $3000 late last year.

“This amount is almost all the benefits I received within the time that I was unemployed,” he said.

“For the past two months I've been trying to get records from four employers that Centrelink is saying are within question, but it's been a slow process. I finally obtained all the documents and submitted them. I was told that I have to make arrangements to pay the money back while this reassessment is in process otherwise I will be dealing with debt collectors.​”

Meanwhile, a 22-year-old East Maitland woman, who asked not to be named, said she received a notice for almost $5000 related to overpayments dating back three years.

“I know this to be untrue because whenever I was overpaid from Centrelink, they caught up at tax time and took it from my tax,” said the supermarket employee, who has formally disputed the claim.

“Until they hopefully say they've made a mistake, I have to pay back $191 a fortnight, which sucks. Instead of going after legitimate fraudsters, they're going after innocent people.”

The Commonwealth Ombudsman launched an investigation into the issue on Monday, which became national news in December amid claims that Centrelink’s new computer system – which cross references data with Australian Taxation Office records – had incorrectly issued thousands of debt notices.