Where a person is paid a pension, benefit or allowance to which they are not entitled, a debt may be due to the Commonwealth.

A 10% penalty may be added to debts resulting from a refusal or failure to provide information in relation to employment income, or knowing or reckless provision of false or misleading information in relation to employment income if the person doesn't have a reasonable excuse.

If the person is still receiving a payment, a debt can be recovered by withholding part of the payment. The Commonwealth Government can also recover an overpayment by civil court proceedings. Other means of recovery include:

In some circumstances, Centrelink may write off or waive recovery of the debt. Centrelink may only waive recovery of a debt in certain defined circumstances (ss.1237–1237AB) including where:

Similarly, write off criteria are outlined in section 1236. Any person who is faced with a demand for recovery of debt should immediately seek independent advice (from a community legal centre, Victoria Legal Aid or a solicitor, see: Chapters 2*3 Legal Representation, and 2*4 Advice Directory, for further information) and consider whether to lodge an appeal (see Chapter 7*2).

Similar, though not identical, provisions relating to Family Assistance overpayments can be found in Part 4 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth).