The Federal Government has decided to start charging interest on Centrelink welfare debts to those accused of making false claims to the Department of Human Services.

Human Services Minister Michael Keenan says the Federal Government has been too lenient in the past with debt recovery and is planning to impose an 8.77 percent interest on debts which people have refused to pay back.

Mr Keenan also said the government will not hesitate in referring deliberate defrauders to the police. There are currently 170,000 Australians with welfare debts adding up to $900 million dollars.