If you get knocked back for a Centrelink payment, always appeal. Do not let it slide, make a real pain in the neck of yourself, you will be glad you did.

The following is a genuine incident. It did happen, the people it happened to are very good friends of mine from way back. I helped them with their application and advised them. A friend's wife, who was born overseas but had lived here for a number of years and is an Australian permanent resident, applied for Ausstudy while she studied for a university degree.

She was knocked back on grounds of failing to meet the residency requirements. No explanation was given.

As they were pretty much completely out of money, and figured they had nothing to lose, they immediately appealed, wanting the officer to take a closer look and see what else they may be entitled to or maybe grant payment on compassionate grounds.

After "careful consideration of all factors" they were knocked back again. A third meeting was set and once again they were told nothing could be done, they had no recourse and Centrelink was right.

I mentioned the case to a Centrelink specialist (ex FIS) from my dealer group. She told me they should apply again and I started reading up on Commonwealth payments.

One month later the application was approved. Feeling bold they then demanded a full back-payment for all the months since the original application had been denied.

While they were told that this would not happen, the case officer was obliged to file the application anyway.

Another letter came through from a supervisor, explaining in detail the reasons why they were not going to get a back-pay. I showed a copy to the specialist at my dealer group and she doubted that there was much that could be done, explaining that often Centrelink bureaucrats are something of a law unto themselves and can demand repayment of excess benefits but are not obliged to make good on past mistakes if they aren't picked up by the client within 60 days or something.

Nevertheless, at my colleague's suggestion I told my friends to lodge another appeal. So they did.

Three days later they got a phone call from a different Centrelink staff member who had been assigned their case. The new case officer had called immigration and been informed that the class of visa my friend's wife carries is indeed eligible for benefits, and was eligible right from the day of their first application, the original denials had all been in error. They should watch their bank account for a full payment, which came in two chunks and amounted to over $4,500.

The lessons? Centrelink is sloppy when denying payment, they were quick to knock it on the head when a simple phone call to immigration six months previously would have shown them my friends were eligible for benefits all along. The fact that they didn't bother calling immigration, even on the two appeals, is unforgivable.

Centrelink are not obliged to make good on their mistakes unless you have an extensive paper trail showing that you picked up on the mistake earlier and appealed. Once a period of time has gone by, even if you discover their mistake and can point out their error to them they are not obliged to pay - unless you appealed.

Centrelink are not infallible, they make mistakes all the time. My clients all tell me the same thing, they get too much or too little pay on a regular basis.

If you get too much pay you must go to the office and report it at once. What will happen is the lazy sod behind the desk will tell you that everything is normal and you should not worry. If you continue to be over paid, go back again and report it. It is highly unlikely that anyone there will actually bother to look at your case and have your benefit reduced, they simply are too busy to worry about it.

Eventually Centrelink's auditors will discover their error and send you a large bill. If their computer has a record of you going in earlier and trying to bring it to Centrelink's attention you may well appeal and be "forgiven" your debt. The key is to have a paper trail established, this will save your neck many times because Centrelink seems to stuff it up frequently.

It costs nothing to appeal, and you can do it by phone call or letter. Don't give up even if repeatedly denied. These phone calls can be worth thousands of dollars and as far as risk to return and return on investment go, these are probably the best investments you'll ever make.