Staff inside the Centrelink unit responsible for income reviews and eligibility assessments warned officials from the Department of Human Services that automated data matching would lead to incorrect debts being issued to low-income and vulnerable Australians, an insider has revealed.

A longtime employee of one of Centrelink's income and debts teams said staff being reassigned to other work within the department were told computer-based debt recovery processes would be more efficient because the systems involved were relatively simple and would be less susceptible to errors.

The Victorian-based staffer, who Fairfax Media has agreed not to name, said public servants were "flabbergasted" by the justification for the new processes - which have already seen about 170,000 people receive debt notices from Centrelink including some seeking repayment of thousands and tens of thousands of dollars.

A growing list of welfare recipients say their debt notices include errors and demands for debt they insist they don't owe.