Centrelink has been urged to review its privacy policy and invest in some locked filing cabinets after a Melbourne woman was unwittingly given a stack of forms that were already filled out by a stranger.

Michelle Piefke, 44, was given a swag of documents after visiting a Centrelink office in Boronia, in Melbourne's eastern suburbs, last Friday to help her daughter Sarah apply for a payment.

She was told to return the forms by Tuesday, but at home she realised that someone else had already filled them out.

Centrelink is being urged to re-train its staff after sensitive documents were given to a stranger. ( AAP: Tracey Nearmy )

"I actually had a bit of a panic attack about it," Ms Piefke said.

"I wasn't sure who to ring, or where to go or what to do, and I didn't want to read the paperwork myself or get the person's phone number or contact them because I'm worried that then I'm breaching the Privacy Act."

The documents contained sensitive information about the other person, including bank details, addresses and signatures.

"That's a big mistake, a really big mistake. I'd be very upset if it had have happened to my family," she said.

"If all of our information went to somebody else and they were to do the wrong thing with it, they could hack our bank accounts.

"They could just take our whole lives really, they could steal our identity."

Ms Piefke is worried that the person who filled out the forms would be told their paperwork was never handed in.

"I've been told that several times before, and what if this is the reason why," she said.

"I'm really concerned that the other person might get their payment suspended or their application's going to take longer.

"I can't feed my children or pay my bills without the help of Centrelink and if it was me that had my payments suspended or my application declined or even delayed, it would be detrimental."

The Department of Human Services said it was investigating the matter.

Centrelink 'already difficult'

Ms Piefke's daughter, Sarah, has an intellectual disability and her son Ryan, who is 13, is on life support.

"It could be life threatening to our kind of family with my son's condition and I think that's why I ended up having a panic attack just thinking … what if they do it to my paperwork too," she said.

She has not been able to return the paperwork because she is a full-time carer and would need someone to provide respite.

"It's not fair to make them wait because it's sitting on my kitchen table and I can't get it back to them at the moment," she said.

In the meantime, she's contacted her local federal MP, Liberal frontbencher Alan Tudge, whose office is liaising with the minister's office to resolve the issue.

Kat Lane, from the Australian Privacy Foundation, said the data breach was troubling.

"It's difficult to deal with Centrelink already," she said.

"This person who is trying to get something paid, not only is their information being given to somebody else … they're possibly missing out on a benefit and may need to wait on hold for hours at Centrelink to try and sort it out. It's an incredible inconvenience."

She said Centrelink needed to acknowledge how upsetting the incident was.

"We're not saying human error doesn't play a part in things, but what is really important is that Centrelink has processes in place to make sure human error doesn't occur at all," she said.

Centrelink urged to train staff

Ms Piefke said her daughter's application has now been delayed too.

She has called on Centrelink to change its practices.

"They need to update their systems, they need to train their staff better, they need to maybe buy some filing cabinets that are lockable," she said.

"It's a big stress that the system can't be trusted. You don't know who your information is going to at all. Like at the moment, this poor person's information is sitting on my kitchen table.

"It's not just as a mistake, if I made this kind of mistake at a job that company would be sued."

The Department of Human Services said it took its privacy responsibilities seriously.

"We are investigating this incident and sincerely apologise for any distress caused," said Hank Jongen, its general manager.

"The department cannot comment on individual cases, however, we will work closely with those involved to address any concerns and ensure they are appropriately supported."