Survivors of institutional child sex abuse have been waiting months to receive agreed compensation money due to "major delays" in the Centrelink approval process.
The compensation money is meant to be paid after a successful civil mediation between the victim and institution.
The victim's lawyer provides Centrelink with a settlement agreement and Centrelink provides clearance to the institution, confirming whether the client owes any money to Centrelink.
The institution either receives a nil clearance or has to pay the amount owing before funds are released to the client.
Newcastle lawyer Peter Kelso, who represents a number of survivors, said the process for Centrelink to provide clearance usually takes a week or two, but survivors had been waiting months for their clearance approvals, causing major disruptions to their lives and ability to heal.
His firm is currently waiting on clearances totaling about two million dollars from matters that were settled between June and August.
"You've got all this positive momentum going for their healing and then it's taking months and months and months for Centrelink, so you're losing all that positive momentum for the healing process with your client," Mr Kelso said.
"The client is ringing us saying when's the money coming, they don't understand.
"Waiting for answers is stressful and potentially re-traumatising."
One of Mr Kelso's clients Donna, who asked for her last name not to be mentioned, is still waiting on a six-figure payment following her mediation on March 2.
She said she didn't owe any money to Centrelink and was frustrated and upset that the funds had not come through yet. She is currently on JobSeeker, only works part-time and doesn't have a car.
"I'm 63 - all this happened to me when I was 11," she said. "I've been dealing with it my whole life and now they're making me wait even longer.
"This was before COVID but they said it would take eight to 12 weeks. It's been six months.
"I thought it was all over. It's just not fair. I had a dream the other night I died before I got it.
Mr Kelso raised the issue with Federal member for Newcastle Sharon Claydon in July, when the firm was still waiting on payment clearances from March.
Ms Claydon contacted the Social Services and Government Services ministers and the issue was quickly rectified, with the exception of two of Mr Kelso's cases.
But, within a few weeks, Ms Claydon said the backlog had built up again.
She raised the issue in Parliament last week, saying the situation was "untenable".
"These people have been betrayed by institutions time and time again," Ms Claydon told The Newcastle Herald.
"They have zero trust in government agencies. They've been through a long battle to be believed only to be held up at this last obstacle.
"Words fail me - it's appalling
"Does everyone have to get their Member of Parliament to make a special representation for what should be a very ordinary process of administration?
"That's a diabolical place to be in."
Mr Kelso likened the situation to The Herald's 'Shine the Light' campaign, saying that only when a spotlight was put onto Centrelink that any progress was being made.
"If you're watching them then they do the right thing, but if you're not watching they do what they like," Mr Kelso said.
"It's life-changing money for these people. It's cruel - I know they're not trying to be cruel but it is cruel holding this back.
"There's a lot of people who don't even think there should be Centrelink clearance."
Services Australia general manager Hank Jongen said he appreciated the distress delays in processing compensation can cause.
"Services Australia has examined all outstanding settlement requests received before June 2020 and has not found any that relate to institutional child sexual abuse," he said.
On average, Kelso Lawyers estimated Centrelink was taking about six weeks to process the clearances. In order to ensure they are being processed, the firm is having to call Centrelink weekly.
But when speaking with Centrelink and explaining the matters are historical childhood abuse cases, the law firm says it was told its clients had to wait in line and no priority would be given, unless the clients were terminally ill or could prove they were in severe financial hardship.
Ms Claydon believes the issue lies in Centrelink staff shortages.
She said staff were doing their best, but they were stretched to the brink with COVID-19 demands.
"More and more people are now lining up for Centrelink," Ms Claydon said.
"The human face of the situation is now visible with these kinds of delays.
"I call on the government to give Centrelink the resources it needs to ensure that all survivors awaiting clearances are treated with dignity and respect and have their clearances processed as an absolute priority."
Mr Jongen said since mid-March, Services Australia had processed more than 1.5 million JobSeeker claims, which is more than the amount they would normally process in two years.
"In response to this surge in demand, we rapidly redeployed our workforce and hired and trained thousands of new staff to deliver critical payments to the millions of Australians relying on us," he said. "We also experienced a high inflow of compensation activities due to the increase in people coming on to a compensation-affected payment such as JobSeeker.
"Staff were reallocated to help with compensation clearances and our focus is on actioning outstanding compensation settlements.
"We prioritise compensation activities for people most in need. This includes those experiencing severe financial hardship, and we encourage anyone in these circumstances to contact us.