Since about April 2015, Centrelink has been contacting current and former welfare recipients claiming that an automated check of their tax returns had revealed an overpayment of benefits.

Anyone handed a 'robodebt' was required to pay back the money unless they could prove otherwise.

Wagga resident Danielle George, who received a demand in 2018 to pay $40,000 back to Centrelink, told The Daily Advertiser she hoped to be among the 470,000 other people due to be refunded a total of $721 million.

"I was like 'what the hell?' because that's a lot of money. I called them up and asked them what was going on," she said.

Miss George said the letter from Centrelink had taken her higher-than-normal wages from working in retail over Christmas and assumed she earned that money all the time.

She contacted Centrelink staff, who said there had been a mistake but she would still owe $3000 if she could not supply payslips from five years ago.

"I tried contacting the store but since it was bought out and moved, I was unable to obtain that stuff because they get rid of it after two years," she said.

Miss George said she had so far paid back $2800 of the debt that had since grown to $4000, including having $20 a fortnight taken from Centrelink payments.

"It was really hard. It's OK now since I have been working casually [at a supermarket] but If I hadn't gained that employment and I was still in debt, I would be living quite sparsely," she said.

"$20 doesn't sound like much, but that was my food money."

A Riverina man aged in his 70s but still working, who asked not to be named, said he had paid back $18,000 to Centrelink via money taken out of his pension.

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"I've had cancer and I lost my wife ten years ago and I've been travelling ever since," he said.

"I've also at times haven't been working and relied on my Centrelink but I have always filled out a tax return.

"It's a lot of money that I have had to pay back after being accused of somehow understating the income that I had been paying tax on."

Federal Minister for Government Services, Stuart Robert, made an announcement Friday that effectively ended the five-year political and legal battle to defend the automated 'Income Compliance Program'.

"From July this year, Services Australia will refund all repayments made on debts raised wholly or partially using income averaging of Australian Taxation Office data," Mr Robert's statement said.

"Refunds will also be made for any interest charges and/or recovery fees paid on related debts.

Federal opposition leader Anthony Albanese said the announcement was "dropped out on a Friday afternoon" and "without even an apology".

"I hope this gives some relief to vulnerable Australians who were chased and hounded for these unfair debts by this incompetent Government. They deserve so much better," he stated on social media.