Centrelink debt recovery starts again next month

Hundreds of thousands of Australians will soon have to start repaying more than $4.5 billion to Centrelink, as the agency's nationwide pause on debt recovery comes to an end next week.

In April last year Services Australia froze 1.3 million debts to ease pressure on household budgets during the COVID-19 pandemic.

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But with the reprieve ending in February, Services Australia General Manager Hank Jongen said those who owed money could expect to be contacted via mail regarding their next repayment date.

"It's really important for people to remember that even though you've incurred a debt, you don't have to pay the whole amount in one hit," he told 9News.

"Most people enter into regular repayment arrangements.

"If you receive a letter, do not ignore it. Understand that we're here to provide you with help, advice and support," Mr Jongen added.

The Commonwealth has a checkered history with social welfare debt recovery, due to its failed Robodebt scheme, which raised unlawful automated debts against more than 400,000 welfare recipients.

Last year it agreed to a settlement of $1.2 billion after a class action was launched.But Mr Jongen said the Robodebt scheme - which relied on averaging tax data - had been discontinued and was a separate matter to the existing debt recovery system.

"What we are talking about here are legitimate debts," he said.

"Let's not lose sight of the fact this is taxpayers' money."

Mr Jongen said anyone experiencing difficulties repaying their debt could contact Centrelink for assistance.

Debt repayments can also managed online, by accessing the "Money You Owe" section of your Centrelink account.