I have had a similiar problem with overpayment, been going back and forwards between centrelink and ato for 2 days now. c/link say that the ato have told them I earnt $11K last fin year, and i didn't tell them so they have taken my whole tax return. duh, prob cos I didn't earn that much!!! (i receive a carer payment for my sick daughter, apparently this is classed as income, as well as $1700 from accrued annual leave from my job i resigned from in may). c/link say its up to ato to fix, and ato say they cant do anything its c/links stuff up. aaauughhh so annoying!!! so now i have to wait to get my tax return back, plus the supplement payment can't be issued until the tax return stuff is resolved. waiting for a call back from a manager - wont hold my breath! sorry for the rant, thanks for letting me vent
any income support payment is classified as an income for FTB purposes - some are tax free (disability pension) but most are taxable. if the ATO are saying you earnt the money, than it's up to the ATO to fix it. nothing centrelink can do - all the details of taxable income are transferred direct from the ATO to c'link - so any updates HAVE to be made at the ATO end.

i understand that dealing with ANY organisation can have it's frustrations, and i know that c'link is probably the one that everyone rubbishes the most because of the fact that almost everyone has had some sort of dealings with them - but let's be realistic - there is no grand conspiracy to make it difficult for you! welfare payments are a sensitive issue, and the government (not c'link) make the rules as to what you need to do to claim those payments. employees can only do what they can within the delegations they have.

and as i've said before, you always have the right to appeal any decision you don't agree with.

just remember, for every negative, there are hundreds of positive outcomes that you don't hear about. having the negative "centrelink sucks" or "centrelink makes it hard" attitude just makes the customer negative, they give the consultant a hard time - and consultants are people that will help - if you give them reason to!! who, in ANY role, is gonna go beyond what they HAVE to do, to help a person that is treating them like cr@p?

there are obviously situations where people will be unhappy - but honestly, i speak to 50 people a day, and half of them come onto the phone ready to treat me like i'm nothing simply because i answer a phone for c'link and they "hate c'link" because of something they heard that happened to they're mother's best friends daughter's cousin...