For a number of weeks the federal government agency Centrelink has been sending out automatically generated debt notices to current and former payment recipients.
Now, an online campaign has begun sharing accounts of people disputing the amounts they're said to owe the government.
Lyndsey Jackson helped create the 'Not My Debt' website and social media pages.
She says some of the most socio-economically vulnerable people are being incorrectly sent letters from Centrelink demanding repayment.
"These are not people that have defrauded the system. These are people that have legitimately followed the processes that are set up and that Centrelink was designed for, and they've done all the right things, and now, three, four, five years later they're being hit with these debts. And that's a dangerous precedent to be setting."
The automated system was introduced in July as part of an effort by the federal government to recover around $4 billion in estimated welfare overpayments.
It cross references data from the Australian Tax Office with Centrelink income records to identify potential discrepancies.
Lyndsey Jackson says in some cases, wages earned even after a person stopped receiving Centrelink payments have been used to retrospectively determine eligibility.
Ms Jackson says it has led to apparent miscalculations that are creating difficulty for people.
"A lot of people with debts that go back a number of years, and just the amount that is required to appeal the debt - like the number of pay slips and the process that you have to go through - is quite onerous. And a lot of people are just paying the debt. So, that's really quite concerning."
Legal Aid in Victoria has also expressed concern.
Spokesman Dan Nicholson says while people can appeal the debt notices some may find it too difficult to do so.
"People with a mental illness or people for who English isn't the first language, they may find it very difficult to pull together the information Centrelink needs, or to navigate Centrelink's very inaccessible systems."
He is calling on the federal government to temporarily pause computerised debt recovery until any issues are resolved.
"We're putting too much onus on ordinary people to correct Centrelink's blunt and inaccurate system of data-matching. So to me the real question is what the government, and what Centrelink should be doing. And in our opinion that is suspending the system until all the problems are fixed."
The Minister for Social Services, Christian Porter, is defending the program, saying there have only been 276 formal complaints so far.
And he told the ABC, it has recovered some $300 million since the start of the 2016-17 financial year and is here to stay.
"Since the start of the financial year we've sent out a 169,000 review letters. These are not debt letters. These are letters which use automated cross referencing information from the ATO to information received at Centrelink, which shows that there might be a discrepancy. They are polite letters, an initial letter, which go to a welfare recipient saying that an issue has arisen, that there may be a discrepancy and we require some further information. And you can go online and do that in a very seamless and easy way."
But the federal opposition's human services spokeswoman Linda Burney says she, too, has received complaints about allegedly erroneous debt notices.
Ms Burney says Labor supports debt recovery, but sees problems in the way it is being done.
"The issue is the algorithm, or the method, that's being used in this case is totally wrong. I mean, it has more holes in it than Swiss cheese. The Australian Taxation Office averages out your salary over 12 months and that is what is being used in this dragnet approach that Centrelink and Human Services Minister Alan Tudge are saying is working well. If you send out $169,000 letters, what's missing is any human oversight."
