Centrelink has threatened to charge daily compounding interest, garnishee wages or seize funds from the bank accounts of former welfare recipients who fail to pay 'robo-debts' issued by the government's automated recovery scheme.

The strong-arm tactics used by the Department of Human Services are expected to inflame tensions with social services advocates and legal experts who are planning to challenge the controversial robo-debt program in the Federal Court.

Former chief crown prosecutor Gavin Silbert. Credit:Jason South

The blunt warnings, which were part of a DHS letter sent on March 6, also include a potential ban on overseas travel, legal action or forfeiture of tax refunds if payment is not received within 14 days.

The department, which acts on behalf of Centrelink, has refused to say how many letters were sent, but insists its enforcement activities comply with all relevant legislation.