Rob Carroll was one of 170,000 clients sent letters demanding repayment of money which the government claims they were not entitled to.

Mr Carroll described his debt recovery letter as “ludicrous”.

“After a couple of decades of work and taxes I found myself unemployed and received a total of $1600 in Newstart payments in 2015,” Mr Carroll said.

“To be eligible for this assistance I had to provide documentation proving that I had ceased employment. Which I did.

“This is the same documentation that I have again been required to ‘obtain and provide to Centrelink’ to prove that I am innocent of not declaring income whilst briefly receiving Newstart payments.”

Mr Carroll has been informed that if he does not begin paying, the debt will be referred to collectors.

Social Services Minister Christian Porter conceded on Tuesday that “one in five” letters had been sent in error.

“It is ludicrous to think that a system which the department admits will falsely accuse at least 20 per cent of people like me of fraud is allowed to be implemented,” Mr Carroll said.

While Mr Carroll said he was vigilant in maintaining his own financial records he held serious concerns for others who may not be so conscientious.

“There is no question that vulnerable, honest people, who did not hold onto employment records from work they did several years ago, are going to be ruled as fraudulent by this current system,” he claimed.

The Department of Human Services was contacted for comment, however could not provide a response at the time of going to print.