'Lack of curiosity' over robodebt legality

A senior public servant has admitted to a "lack of curiosity" over legislative changes needed to allow the coalition government's controversial robodebt scheme to be introduced.

In evidence to the royal commission into the failed program, former Department of Human Services secretary Kathryn Campbell said she didn't ask for details of the legal advice on legislative changes required in the months ahead of robodebt's start in 2015.

Ms Campbell said at that point the proposal for automated debt recovery was in its early stages.

She said her department was not responsible for providing advice on legislative changes even though such changes would affect its operations.

"In hindsight, it looks like a lack of curiosity," she told the commission on Friday.

"But I note at that time we were relying on the policy departments to provide the legislative advice.

"At this point in time we were asking for agreement to pursue these issues.

"This was a pretty preliminary piece of advice. I had envisaged that the Department of Social Services would work through those legislative changes."

Ultimately, no legislation was revised to support the scheme, which sought to recover $1.2 billion over four years from more than 860,000 welfare recipients but ended up falsely accusing many of owning money.

Hundreds of thousands of Australians were sent debt notices which recovered more than $750 million before robodebt was halted in 2020.

The program changed the system of determining a person's entitlements by relying primarily on information obtained directly from the Australian Taxation Office to automatically calculate a potential debt, rather than from the client or other sources.

The change allowed for a huge jump in the number of cases that could be examined from something like 20,000 a year to 20,000 a week.

Recipients could provide information to dispute or verify the debt notice determined by the scheme and Ms Campbell said it was always envisaged that clients would engage with the system.

However, she conceded that didn't always occur.

By 2017, further legal advice was provided to the Commonwealth ombudsman by the DSS advising that the scheme was then operating lawfully.

That advice was provided on the basis that income averaging through the ATO data was only being used as a last resort and only after every effort had been made to contact the welfare recipient.

Ms Campbell said, on the basis of that updated advice, she also thought the scheme was operating lawfully.

"At this time, I considered the system was legal," she said.

"I accept that is no longer the case. But my knowledge in 2017 was that the system, if we had provided the recipient the opportunity to respond, was lawful."

Ms Campbell said in hindsight it would have been preferable for her department to have sought its own external legal advice.

She also conceded robodebt was a failure of public administration "on a significant scale".

In other evidence on Friday, NSW Welfare Rights Centre Executive Director Katherine Boyle told the commission that when robodebt was taking off her organisation became immediately concerned and knew something was wrong.

She said it set up a "debt clinic" using law students to manage the influx of clients.

"We had hundreds of clients go through that," she said.

But she said it took months to get access to the necessary information from the government which required applying under freedom of information laws.

Ms Boyle said in some cases people had never received a letter from Centrelink advising them of their debt but had simply been called by a debt collector.

In other cases there was evidence of "manual errors" where a person's pay across two years was applied to a single year, effectively doubling their income.

"It was sort of error, compounding error," she said.