Thousands of Aussies could soon be reimbursed after unknowingly paying more than they owed on Centrelink debts.
Many of these excess payments were made through automatic systems like BPAY, which continued to withdraw money even after debts were cleared.
Services Australia has acknowledged the bungle and is now investigating over 40,000 instances where people may still be entitled to refunds.
“Services Australia is investigating approximately 44,000 records where customers paid more money toward a Centrelink debt than they owed and a refund may still be owing. Of these records, 50 per cent of the potentially owed refunds are less than $50, 80 per cent are less than $500 and two per cent are for $5000 or more,” Centrelink said in a statement.
“In most cases when people overpay their Centrelink debt, we refund the money or transfer the balance to another debt, if they have one. We process hundreds of thousands of refunds like this every year. The vast majority are processed correctly and in a timely manner.
“In some instances, the correct process to issue the refund didn’t occur and a refund may still be owing to the customer.”
According to the agency, unintentional overpayments are common when customers do not cancel recurring payment arrangements such as BPAY. Payments can only be stopped by the customer.
Overpayments may also occur when debts are revised following a reassessment.
“Family Tax Benefit debts that have been reduced after the customer lodged outstanding tax returns. This is generally where large overpayments arise when people lodge several years of tax returns at once,” Services Australia explained.
Refunds will begin being issued from late October 2025, with impacted individuals notified by phone or mail.
