Retired nurses in South Australia have been threatened with debt collectors for as little as $33 due to salary overpayments made more than 20 years ago.

Key points: Nurses who've retired from an Adelaide hospital say they're being pursued for overpayment of wages, some dating back to the 1990s

Nurses who've retired from an Adelaide hospital say they're being pursued for overpayment of wages, some dating back to the 1990s The overpayments have been blamed on the introduction of a new payroll system in 1996

The overpayments have been blamed on the introduction of a new payroll system in 1996 Labor has accused the Government of "penny pinching" and says it should not be chasing people like retired nurses for small debts

Nadine retired in early 2018 after 32 years' service at the Repatriation General Hospital in Adelaide's south, but last month she was phoned by a government agency seeking $143.85 which it said had been paid in error in 1996.

"I cracked up laughing and said, 'Are you joking?'," Nadine told ABC Radio Adelaide's Mornings program.

"I thought it was a scam."

She requested paperwork to validate the claim; Treasury's payroll and business unit, Shared Services SA (SSSA), sent a letter demanding full payment within 10 days or instalments at a "minimum of $123 per fortnight".

"I started working at the Repat in 1982 and a lot of that overtime work was for love," Nadine said.

"It's just a bit of a kick in the teeth really."

Another nurse, Pamela, who retired in May after 45 years, was sent a letter last month stating she had been overpaid by $33.

When she asked SSSA what would happen if she didn't pay it back, she said they responded by saying, "We'll send the debt collectors".

"Years of unpaid overtime, no meal breaks, no breaks from my constant pager — what's going on here?" Pamela said.

The Repat was originally set up to cater for returned servicemen during World War II. ( ABC News: Isabel Dayman )

'Their pound of flesh'

Dave's wife worked at the Repat for 35 years before staying to help her team move to Flinders Medical Centre, after the former government closed sections of the hospital.

He said she was initially told she would get a government payout but six weeks later was announced as ineligible.

She resigned in early July but was diagnosed with breast cancer soon after — without access to the 1,300 hours of sick leave she had accrued.

"Then she received notice of overpayment of $431.56 from 1996," Dave said.

"They've kicked her in the guts three or four times for nearly 40 years of service ... they've got their pound of flesh out of her, I can tell you."

He rang SSSA but said no-one was available to speak to him because they were in a "team meeting".

"They've sent a letter here saying that she has to pay this back in fortnightly payments starting from 10 days' time at $183 a go," Dave said.

"We're not going to do that.

"We'll talk to them in January [after his wife's treatment] and work something out, but there's no way known they're going to get their money out of us [this year]."

Minutes from 1996 explaining planned debt recovery due to overpayment. ( Supplied )

Payroll changeover blamed

A payroll system called PERUSE caused the problems when it was implemented in mid 1996.

According to a staff memo at the time, people's timesheets needed to be closed off after recording 11 calendar days instead of 14.

Employees were subsequently overpaid by three days so they would not be disadvantaged by any shortfall in their regular salaries.

The memo said overpayment would be recovered from a staff member's final salary "at the time you cease employment at RGH, e.g., retirement, resignation or transfer to another department/hospital".

Nadine, however, said her last payment was at the beginning of 2018 but only received her letter earlier this month.

"They said if overpayment wasn't paid, there would be creditors notified — for $143.

"I want a copy of my payslip from back in August 1996, and when I'm provided with that, I will then contact the Australian Tax Office, because I would have paid tax on that money.

"If I do owe them money, that means the tax office owes me some money too."

Government accused of 'penny pinching'

Former treasurer and Labor MP Tom Koutsantonis said the Government should not be chasing people like retired nurses for small and old debts.

"It's mean, it's penny pinching and it's unfair," he said.

"This is a Treasurer who's dramatically increased the fees for parking to go to work at a hospital when nurses and doctors are at risk of violent assault at our hospitals, and now he's chasing down people for $40, $30 for overpayments from 20 years ago."

Treasurer Rob Lucas said about 200 SA Health employees were overpaid.

"In consultation with the union at the time, it was agreed that those overpayments would be returned at the time the staff member ultimately finished their employment," Mr Lucas said.

"Due to an administrative error, it was recently identified that 18 former staff did not have these overpayments deducted and Treasury had sought to contact them.

"I've only just been advised of this recent situation, in which the overpayments weren't repaid at the agreed time, and I've sought an urgent report into the 18 cases."