More than 217,000 notices were issued by the robo-debt system between July and December last year.

These letters were generated by a computer program that compares a Centrelink client's information on the Department if Human Service’s files with data at the Australian Taxation Office.

Of these letters, more than 36,000 did not result in any debt to Centrelink and about 6600 welfare recipients first learnt of their alleged debt from debt collector. 

Senators grilled senior bureaucrats from the Department of Human Services over the effectiveness of the automated debt recovery system in Canberra in March.

NSW Senator Deborah O’Neill said 20 per cent of those people receiving letters did not need to pay any debt, while thousands more were billed for debts owing, but subsequently had the amount reduced, in some cases to zero, after providing further information.

Ms O’Neill said a new ombudsman’s report and a freedom of information (FOI) request have revealed the depth of problems with the Federal Government’s Centrelink robo-debt program.

“The FOI request by the ABC revealed Minister for Social Services Christian Porter and his department claim to not have been informed about problems with the debt recovery program. 

“This has resulted in torment and anguish for people wrongly accused of owing Centrelink money,” Ms O’Neill said.

“That Centrelink are demanding money be paid back that people do not owe is a complete abuse of power.” 

Senator O’Neill said a Commonwealth Ombudsman’s report revealed demands on former welfare recipients targeted by the robo-debt program were neither “reasonable” nor “fair”.

“The Ombudsman has recommended the Government conduct a ‘comprehensive evaluation’ of the controversial "online compliance intervention" before it goes any further,” she said.

Acting Ombudsman Richard Glenn found that many of the problems with the controversial online compliance initiative were of the department's own making, and that, ‘Many of these problems could have been reduced through better project planning, system testing and risk management."

“The Ombudsman also stated a major cause of complaints about this robo-debt program has been the ‘notorious customer service woes’ of Centrelink,” she said.