Mr Shorten, who is on summer holidays until the end of the week, has not previously commented on the project, which the government estimates will add an extra $4.5 billion to the budget. The automated system has been accused of miscalculating bills and sending debt notices to people who do not owe.

Stories have mounted in recent weeks of Australians – including asylum seekers and people with disabilities – who say they have been sent inaccurate debt notices.

Fairfax Media has spoken to one man who says he was sent an inaccurate debt notice for a period in which he was off work recovering from invasive brain surgery.

"This farce has to end," Mr Shorten told Fairfax Media. "This stuff-up has delivered a summer from hell for thousands of people who have done absolutely nothing wrong.

"They are hounding ordinary Australians for debts they do not owe. It's a toxic mix of incompetence and cruelty. I'm saying to the Prime Minister, just admit you've stuffed this up and suspend the program now."

Mr Shorten said Prime Minister Malcolm Turnbull should cut short his holidays to deal with the issue.

Social Services Minister Christian Porter has defended the system, saying it was working "incredibly well" and had attracted only a tiny number of complaints.

Caleb Dawson, 32, said he received a letter in November questioning $1500 of sick-leave payments to him in 2011. Mr Dawson, who was working for a cabinet maker at the time, was off work after suffering an aneurysm that required invasive brain surgery and three weeks in hospital.

He has provided Centrelink his payment details and his health records, but has been unable to clear the debt.

"I've spent the whole holidays battling them," Mr Dawson, from Manly, said. "It has caused me a lot of grief, it's really quite stressful. It makes you feel like a criminal.

"I've rung about 15 times, spoken to people on the phone for an hour and they say, 'There's nothing we can do.' "

Mr Dawson said Centrelink staff had acknowledged on the phone that his payments appeared to have been correct, but the issue was now in the hands of a private debt-collecting agency.

"It seems to be a very clunky system – it's just not working," he said.

The new compliance system data-matches Centrelink's income information with other government records, including at the Australian Taxation Office.

Mr Porter said last week that Centrelink had received only 276 complaints from the 169,000 letters that had been sent out. The process has already returned $300 million to the taxpayer, he says.

"From what we've seen in a high-volume system, it's actually working incredibly well," he said.