About 13,000 Veterans Affairs clients were overpaid $12.6 million last financial year, the department says.

About 13,000 Veterans Affairs clients were overpaid $12.6 million last financial year, the department says. Photo: Jessica Shapiro

The Department of Veterans Affairs has been recouping millions of dollars it overpaid to clients.

About 13,000 Veterans Affairs clients were overpaid $12.6 million last financial year, the department says.

This mistake would have seen the average recipient pocket an extra $1000 within 12 months on average.

The department has so far recouped $9.5 million and will waive the ''debts'' it cannot get back from veterans, their carers or family members.

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The department, which pays out $3 billion annually, has also revealed it incorrectly paid as much as $44.7 million for residential aged care that should have been paid by the Department of Health and Ageing.

A Veterans Affairs spokesman said this problem was now fixed. The executive director of the Defence Force Welfare Association, Alf Jaugietis, said overpayments may have been caused by clients confused by the bureaucracy.

''They could be more helpful in giving answers to vets,'' Mr Jaugietis said.

He said there were also underpayments for people who had claims knocked back because they had not had government language, and the evidence they required to back up claims, explained to them well enough.

''They [the vets] walk around gnashing their teeth for two years until they run into someone, perhaps from our organisation, who knows how to do it,'' he said. ''The department is quite responsive [in other areas], but where they're not good is guiding you through to the best outcome.''

Meanwhile, the Australian National Audit Office tabled a report in Parliament last month showing as much as $537.5 million may have been overpaid or not paid correctly by government departments in 2012-13.

It is regarded as a breach of section 83 of the constitution if payments are not made within the law.

The audit report said most of the breaches were caused by agencies relying on incorrect personal information, such as income estimates and employment status, from clients.

Historically, Veterans Affairs has dealt with more matters of non-compliance rather than fraudulence.

Its 2012-13 annual report says the department had 368 cases on its books. After investigation, 174 of these cases were closed due to no offence being detected, while in nine cases fraud was identified and in a further 88 cases non-compliant activity was found. Vietnam Veterans Australia ACT branch vice-president Pete Ryan said the department fixed most problems efficiently and added dishonest clients should be pursued vigorously.

Meanwhile, the report said the old department of families, housing, community services and indigenous affairs was found to have overpaid $120 million, of which $80 million had been recouped as of the June 30.

The Department of Education, Employment and Workplace Relations paid $101 million under the Social Security Act, $4.6 million under the Student Assistance Act and $452,000 under the Schools Assistance Act which were potentially in breach of the constitution. The Department of Health waived $12 million of overpayments without legal authority.