The High Court will consider whether federal laws introduced last year to clamp down on welfare fraud are constitutional.

Victoria Legal Aid (VLA) is using the case of single mother Kelli Keating, who was charged with welfare fraud for receiving an overpayment of $6,942 from Centrelink when she was working part-time.

Centrelink says she failed to declare her income.

If successful, the VLA believes the case could affect 15,000 prosecutions across the nation.

The Federal Parliament passed legislation in July 2011 that made it a criminal offence for a person on a pension or benefit to not tell Centrelink of "anything" that "might" affect their entitlements within 14 days.

The law applied retrospectively from 2000.

Speaking outside of the High Court in Melbourne, VLA director of civil justice, access and equity, Kristen Hilton, said the change unfairly targeted vulnerable people battling with a complex social welfare system.

"We are concerned that the laws operate retrospectively, and that means because they are 10 years old it is impossible to comply with them," Ms Hilton said.

"The case is really about challenging the breadth of the law and also challenging whether or not and in what circumstances Parliament can pass retrospective laws."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 4 minutes 9 seconds 4 m 9 s Kristen Hilton speaks to The World Today Download 1.9 MB

Ms Hilton says overpayment is different from fraud.

"This isn't about letting people off the hook where there has been clearly fraudulent behaviour, it's about people who have made a mistake, who haven't understood the system," she said.

"Centrelink's own data shows that it gets things wrong one out of every three times.

"If Centrelink can get it wrong so often, it's not surprising that people who are poor, illiterate, have a disability, or don't speak English well might misunderstand what they need to report to Centrelink," Ms Hilton said.