Nauru's foreign minister, David Adeang, says Australia has failed to pay an increased visa fee for an Iraqi refugee held on behalf of Australia.
Australia has labelled Mohammed Sagar a security risk and he has been held in Nauru for nearly five years without any resettlement option in sight.
Two months ago, Nauru decided to charge Australia a visa penalty fee for all asylum claims not processed within a year in a bid to speed up the processing in the Australian-run centres.
Mr Sagar's visa expired at the end of August, and he is now without a visa.
Mr Adeang says the matter is still under discussion.
"I have officially communicated with the Australian government on this matter, the visa fee that is to be paid, and, of course a new month commences on Sunday."
Mr Adeang says the matter will be discussed in a cabinet meeting today.
According to an earlier report, Nauru decided to charge Australia a penalty fee of 75 000 US dollars, but Mr Adeang would not confirm this.