Deputy ombudsman, Richard Glenn told the Guardian that the matter was "of significant interest to this office".
“I can certainly say the ombudsman has approved an own-motion investigation into the matter... this one will be self-initiated because we have a number of complaints and there is significant public controversy about the issue. So it is an inquiry into the issue at large, rather than into a specific complaint," Mr Glenn said.
“Certainly there’s enough information from complaints we’ve received and … that it’s an issue of significant interest to this office, and we’ll be pursuing it.”
The investigation will reportedly focus on three areas: the data-matching process used to compare Centrelink records with those of the tax departments; how Centrelink communicated with clients and how the agency managed the fallout.
Mr Glenn says that while the investigation process may take a long time, his agency has the resources to carry out the task.
Those affected by Centrelink's demand letters have been sharing their stories on the #NotMyDebt website.