Mrs Simmonds said Centrelink staff are at a loss to explain why she owes the money.

Despite spending 15 hours on the phone to Centrelink staff, she said the issue remains unresolved.

“According to their system I’ve under-reported (earnings) but according to my figures, I’ve over-declared my income,” Mrs Simmonds said.

“Even people who work in the compliance section don’t understand, if they can’t understand it and I can’t understand it, how is anyone supposed to understand it?,” she said.

Another resident, who asked to remain anonymous, said she too fell victim to the same error. She eventually had a $12,000 debt wiped after providing old pay slips.

“Don’t just take it sitting down and even so, people make mistakes. Humans make mistakes,” she said.

“I know how hard it is for Centrelink staff, there’s so much they need to know. People’s lives don’t fit into boxes on a computer system designed 10 years ago.”

Department of Human Services general manager Hank Jongen said the department was confident in the online compliance system used “to ensure the welfare system’s integrity”.

“If someone receives benefits to which they are not entitled, the department is required by law to recover the money,” Mr Jongen said.

“While the new online compliance system automates part of this process, it also does not change how income is assessed or how debts are calculated. The system is an easy way for people to confirm details and resolve any outstanding matters.”