OP, it does seem that you’re not aware of the changes in how sellers are paid. These changes have been in place for a few years now.

For anything where the buyer pays using a payment method covered by the MBG, sellers can only be paid now through eBay’s in-house payment system called Managed Payments. When a buyer pays using eBay checkout (by PayPal, Afterpay, Zip, credit or debit card, Google Pay, Apple Pay, gift card or voucher), the payment is processed by Adyen and goes straight to eBay. If there’s no hold on the payment, that payment (less FVF and any other fees) is then disbursed to the seller’s bank account as scheduled by the seller.

It is not disbursed to a PayPal account, nor to escrow. The Australian transactional bank account is a requirement.

A seller’s funds will be on hold when there are risk mitigation measures that apply. “New” sellers or sellers who haven’t sold for a while or with sufficient regularity, or sellers whose selling behaviour shows a change that might be worrying (for example, suddenly selling a lot of items, selling high-priced items esp. when it’s a new behaviour, and other behaviours that may raise red flags), will find their payouts on hold, usually for 30 days, sometimes for a shorter period.

Once the seller has satisfied eBay’s automatic bot-driven standards/algorithms, the hold is removed and future payments will go through without that hold. (Unless, that is, the seller’s selling becomes irregular, pauses for long enough to stick the “new seller” label on the seller, or in some way raises a red flag in future.)

Make sure you are registered for Managed Payments and have verified your bank account and your ID (the former with either login credentials or micro deposit method, and the latter with driver licence or passport).

This help page explains: https://www.ebay.com.au/help/selling/getting-paid/registering-seller?id=4792

Now… if you are talking about a buyer claiming they’ve paid you directly to your PayPal account, or they’re talking about eBay holding your payment until you provide proof of tracking, or payment in escrow, or you receive some sort of communication about a payment which does not show in your Seller Hub, then you’ll know it’s a scam.

Most likely a scam but can you be more specific ?

" I want to refund sale but buyer claims he has already paid "

Which sale are you trying to refund  ?     If the buyer hasn't  paid ?

" I am worried this is a scam as i am sure I deleted this item over a year ago"

Do you mean the buyer wants a refund on an item  supposedly paid for a year  ago ?

Just out of curiosity, was this a pick up only item ?

If it's an eBay sale, it would be showing in "Orders awaiting postage". If it's not showing there, then the buyer hasn't paid via eBay.

On the "Order details" page of the app, click on the blue button dropdown arrow and scroll down to "Send refund".

On the classic site, click on the three dots next to the "Get postage label" button and "Send refund" will be one of the dropdown menu options.