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Scott Morrison received advice as social services minister in 2015 the robodebt scheme needed legislative change to go ahead.Credit:Rhett Wyman

The Brisbane hearing was shown November 2014 advice from Department of Social Services official David Mason to colleagues that he didn’t support the proposal to leverage debts from Centrelink recipients using income averaging because there was no legal basis for it,and it was indefensible if challenged.

Advice was sent to Morrison from DHS officials in February 2015 that the debt collection proposal would need new legislation. Former DHS secretary Kathryn Campbell told the commission,“the brief that went forward said DSS indicated there would be a need for policy and legislative change”.

“At some point in time,a decision was taken that it didn’t require policy or legislative change,” Campbell said,returning to give evidence during the second tranche of hearings after previously telling the commission the scheme was a significant administrative failure.

Morrison was social services minister when the robo-debt scheme was established in 2015 and prime minister when it was wound back in late 2019 after its income-averaging debt calculation method was ruled to be unlawful.

Former DHS secretary Kathryn Campbell returned to the royal commission on Wednesday to continue her evidenceCredit:Alex Ellinghausen

He isfighting to use secret cabinet documents to firm up his defence before he fronts the royal commission on Wednesday next week. The Commonwealth opposes his bid because it is against the public interest to reveal cabinet deliberations.

A closed hearing has been scheduled for Thursday after Morrison’s lawyer,James Renwick SC,said his client’s “reputation is on the line” if he could not refer to the confidential papers to answer questions about the scheme.

Under questioning from counsel assisting the commission,Justin Greggery KC,Campbell said DHS had later received legal advice from DSS that income averaging could be used as a “last resort”.

“I didn’t want to use averaging,” Campbell said,to which Greggery responded,“why did you use it?”

Campbell replied,“the legal advice we had received from DSS was that averaging could be used as a last resort”.

Income averaging involved the system taking annual income data and averaging it over 26 fortnights,presuming income was the same across each,and put the onus on welfare recipients to prove they didn’t owe the government money.

The debt would be raised if recipients didn’t respond to initial letters sent out to them,making them aware of the alleged money owed.

When Campbell was asked whether she was troubled that income averaging would lead to the inaccurate calculation of debts,she said:“I was troubled that citizens weren’t able to engage with the system”.

Commissioner Catherine Holmes,a former chief justice of the Queensland Supreme Court,asked whether moving to automatic averaging if recipients didn’t respond to the department’s letter represented a policy change. Campbell said it represented a change in “how we would approach them”.

“The intent was to get a response,” she said,agreeing later the department had reversed the onus of proof onto recipients.

Evidence was presented to the commission on Tuesday that revealed DHS received advice robo-debt was not lawful eight months before a federal court judge found the scheme was illegal in November 2019.

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