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this is the last thing I need

Debt amount: 
$3700
Date debt issued: 
Thursday, 8 March 2018
Period debt occurred: 
July 2012 to June 2013
Has your case been referred to a collection agency?: 
No
Payment Type: 
Sickness Benefit
Appealing Debt?: 
Yes in process
Tell us about your debt and how has this affected you? e.g. anxiety levels, financial and accommodation stress: 

I worked intermittently that financial year due to poor health. I declared every hour that I worked.
Some fortnight's I earned a little, others a decent amount and many fortnight's nothing at all.
I have provided centrelink with all payslips, bank statements, medical certificates and my tax return.
According to centrelink, the "system" has averaged out my total income for the financial year and divided it into the 26 reporting periods, and therefore claim I earnt money every reporting fortnight, but did not claim it. I am able to prove the actual dates I worked and they have a record of how much I claimed each reporting period. Yet still they are averaging my income over the entire year.
How can they accuse me of earning income every fortnight when I can prove I didn't.
As a relief teacher at the time, there were 12 weeks school holidays that I definitely could not work....and yet the centrelink system still claims I earnt undeclared income during those periods!
For 2 months during that financial year I stayed with family up north because I was too unwell to take care of myself....my bank records prove my earnings and withdrawal locations and still they are accusing me of earning undeclared money.

How do you feel about the way the Government has handled this process?: 

Poorly so far. They have all the documents required to cross reference how much I reported and when, but insist my yearly income has been divided into the 26 reporting periods resulting in this debt.
I feel as though they are accusing me of lying.
My physical and mental health is in a very poor state, and this is the last thing I need.