Department was 'double-crossed' on legality of robodebt

A senior public servant insists it was "not his responsibility" to stop the robodebt scheme, despite discovering it was illegal.

The unlawful scheme ran from 2015 to 2019, using annual tax office data to calculate welfare debts.

Paul McBride, a former group manager in the social services department, first examined the robodebt policy in 2014.

He and other members of the executive team advised the human services department it could not go ahead with the "incoming averaging" plan without changing existing laws.

Despite this, human services told cabinet ministers no changes were required.

Mr McBride became aware the department was using averaging unlawfully in January 2017, which he described as a "complete surprise".

But because he had moved to a different department area, Mr McBride said he had no responsibility to do anything about it.

"By the time I became aware of it, I had no authority to do anything because it was no longer my job," he told the robodebt royal commission on Thursday.

Commissioner Catherine Holmes put to Mr McBride that human services had effectively "double-crossed" his own department.

Mr McBride agreed his department had been misled but said it wasn't his job to address it.

The commission also heard an independent watchdog had doubts about the scheme's legality in 2017.

Former ombudsman Richard Glenn conceded he should have referred human services to the Administrative Appeals Tribunal, which reviews government decisions.

The department misled his office by withholding key documents that flagged legal issues with the scheme.

Ombudsman staff still held doubts about the advice the department provided.

Yet questions about the legality of the scheme raised in a draft report were removed in the final version, which was used by the former coalition government to defend the scheme.

Mr Glenn said although his team had doubts, he couldn't form a definitive view.

He decided to focus on improving the administration of the scheme, but said he should have clearly stated the report did not answer the question of legality.

"On the material before me, I was not satisfied that we could make a declaratory statement, and I chose not to comment on legality," Mr Glenn said.

"I should have said very clearly 'I am not dealing with the legality' to exclude the possibility of people over-reading the report."

He said with the benefit of hindsight, he would have made a different decision about the tribunal review.

"My thinking was influenced by the fact I couldn't make a clear determination one way or the other about legality," Mr Glenn said.

"The advice I was receiving from the team was that they were concerned, but we couldn't land a crisp, contrary view."

Commonwealth Ombudsman Iain Anderson said it was "extremely disappointing" the department withheld crucial documents.

He said evidence heard by the commission showed department staff did not respect the role of the ombudsman as an integrity agency, or their own responsibilities as public servants.

Mr Anderson said he was committed to improving the ombudsman's processes and training about handling dishonest departments.