Yes you are paying your debt but we are still referring you to a debt collector

I received a letter asking me to confirm my income from 3-5 years ago, when I worked part time while studying at University. At the time I had difficulty obtaining my payslips from my employer (due to a programming issue in the software). I had spoken with Centrelink about it and provided evidence from my employer.
As I worked the same hours every week — the Centrelink officer recommended an amount I should report every week.
In my last year of university, I received a letter from Centrelink advising that they had done a review of my earnings and I was overpaid $60 — which I immediately paid back.

After receiving the letter requesting that I confirm my income, I rang Centrelink and was told that without payslips confirming the income I had reported, a ruling would be made and I would have a debt of $10100.

I was able to provide the original letter advising of the review of my payments and notification of the $60 overpayment. I asked them to tell me why the $10,100 over payment wasn't identified when they reviewed my account and discovered the $60 overpayment. Centrelink advised that my debt had been identified by data matching, it was 100% accurate and without payslips as evidence that it was wrong — I had to repay the debt.

When making the payment arrangement, Centrelink bullied me into making an unrealistic weekly repayment. At the time I was a contract employee with substantial debt (HECS, car loan, credit card) and I could not afford the weekly repayment they were insisting. Centrelink advised their weekly repayment amount was the lowest they could accept. I started making the payments but regularly had to borrow money from my parents to buy food and put petrol in my car.

When I contacted Centrelink to tell them I couldn't make the weekly repayment I was told too bad. I had to submit proof of all my debts and outgoings and it had to be assessed by Centrelink before they could approve a lower amount.
So I just started paying what I could afford weekly — via direct debit, every single week.

Then I started receiving threatening letters from Centrelink. The letter stated that my debt was now approximately $8000 (when it was originally $10100) but then went on to say that I was going to be referred to a debt collector because I wasn't paying my debt.

I think I was one of the first people that this happened to. Honestly (I know this is bad), I was quite relieved when it started happening to lots of other people — I thought, finally I am not alone in this madness!!! When I first learned that I had a $10100 debt I thought I was going to jail. I was distraught. I thought my life was over. I was embarrassed, I was ashamed and I felt like a criminal. I could not even tell my family. So I kept it to myself.
I can't begin to tell you the emotional and physical distress this debt has caused me. It was the straw that broke the camels back in terms of the amount of debt I had and the pressure of affording all the repayments. I started suffering random bouts of heart palpitations — especially when receiving Centrelink letters in the post. I've had numerous ECG's — including numerous bouts of wearing a holter heart monitor. My doctor and specialist attributed my heart palpitations to stress.