Mum facing court battle after Centrelink found to have bungled payments

A mum who took on Centrelink and won after she was told she owed about $45,000 for overpaid benefits is facing more legal battles as the welfare body continues to pursue her.

Queenslander Carly Hockey said the drama started when she got re-married and started collecting the Family Tax Benefit for her partner's five children.

She told Centrelink that as there was shared custody, she only had her five step-children 50 percent of the time, as well as her two youngest children 100 percent of the time.

However, three months after the payment was in place, Ms Hockey started getting paid as if she was the full-time carer for all seven.

"I rang Centrelink straight away, we were very concerned," she told A Current Affair.

She said the customer service operator told her that their computer records had all Ms Hockey's details correct.

She claims she was told Centrelink would look into it, and if she heard nothing back, to presume she was being paid the correct amount.

But two years ago, Ms Hockey said she received a series of bills from the government saying she owed tens of thousands of dollars after being overpaid in the Family Tax Benefit.

She then took her fight to the Administrative Appeals Tribunal, and won - but not before already paying off around $5000 of the outstanding debt.

"I was effectively called a liar from the first tribunal," Ms Hockey said.

The tribunal found no reason to disbelieve Ms Hockey's evidence and said the debts "ought to be waived".

However, her account still shows that owes about $40,000.

And just recently she received another call from Centrelink's lawyers, who told her they would take the matter all the way to the Federal Court in an appeal.

"They're saying there was an error in the way the tribunal has applied the law," Ms Hockey said.

Should Ms Hockey lose the upcoming legal battle, she would have to pay Centrelink's legal costs - which she says would bankrupt her.

The Department of Human Services issued a statement saying they would not discuss Ms Hockey's case while their appeal was in progress.

"This is just a disgrace, that a government department would do this," Ms Hockey said.