The inquiry will focus on the error rates of debt notices made after July 1, 2015, and the steps Centrelink staff took to identify and remedy errors.
Since moving to an entirely automated system in July last year, 169,000 letters have been sent by Centrelink asking people to explain discrepancies in welfare payments and reported income.
But thousands of Centrelink recipients said the calculations – which compare annual income information from the Australian Tax Office to the fortnightly income reported to Centrelink – were wrong.
Greens Senator Rachel Siewert said the thousands of people wrongly accused of owing money to Centrelink need, and deserve, answers.
“This is just the tip of the iceberg, as we know so many people are yet to receive the debt notice; it’s only going to get worse,” Siewert told BuzzFeed News.
Siewert described the system as a “monumental mess”.
“It is bizarre that despite the rollout of the automated debt recovery system going so dismally wrong and at the expense of struggling Australians, the Government has offered no answers and next to no guarantee that they will improve the program, nor have they committed to abandoning it,” she said.