Robodebt proposals created amid 'pressure'

A senior public servant has rejected a controversial income averaging process was fundamental to proposals for the now-defunct robodebt recovery scheme, amid "relentless" departmental pressure at the time.

A royal commission, sitting in Brisbane, is probing how the automated robodebt scheme went ahead despite federal government departments knowing the calculation method was unlawful.

The scheme from 2015 until 2020 wrongly recovered more than $750 million from 381,000 people, with several victims taking their lives while being pursued for the false debts.

On Friday, former Services Australia general manager of business integrity, Mark Withnell, was quizzed over internal departmental documents that counsel assisting Angus Scott KC suggested showed income averaging as a "fundamental aspect" of proposals.

"It's certainly not my view," Mr Withnell said.

"That was always the proposal and it never changed," the barrister put to Mr Withnell at another point on the issue of so-called "income smoothing".

"That's not the case," the witness replied.

Mr Withnell said the period under examination, and the 18 months that followed, was a time of "ever-increasing workloads, intense micro-management and relentless pressure".

"One of the legacies of that is there are times when I have trouble focusing and concentrating for periods of time, I'm not trying to duck your questions or be difficult here," Mr Withnell said, before being granted a short adjournment.

On resuming his evidence, Mr Withnell told the inquiry: "I'm certainly not trying to avoid providing the evidence."

A previous witness accused Mr Withnell of getting frustrated in a 2015 meeting when told the scheme's income averaging debt calculation practice was not lawful.

Mr Withnell seemed "particularly unhappy" a $1.2 billion projected saving might be at risk if the scheme could not happen, Social Services official Andrew Whitecross said earlier this week.

Mr Withnell on Friday said he could not recall the January 2015 meeting and of Mr Whitecross told the inquiry: "The name doesn't ring a bell."

Earlier, ex-Social Services employee Catherine Halbert was quizzed over her correspondence with the ombudsman's office in 2017, with the suggestion she "manipulated the truth" about the department's view on the scheme in 2015.

"It's abundantly clear that you did," counsel assisting Justin Greggery KC put to the witness.

"I was not trying to mislead the ombudsman's office and if I've written it incorrectly, that's my responsibility," Ms Halbert replied.

The former group manager of payments policy rejected she understood the "importance of justifying the legality of the scheme to the ombudsman".

"I didn't feel any justification to justify the legality of the scheme," she said.

"I don't believe we were endorsing income smoothing as a concept."

She agreed that in 2015 the department advised the calculation of debts with reference to averaged payroll data was contrary to law, saying it did not resile from that position.

She conceded to surprise and anger in 2017 that income smoothing was being used to raise debts, and insisted she "was in no way trying to present a false impression of anything".

"I was passing on an understanding the department had in 2015 as it was presented to me ... I don't know what more I can say," Ms Halbert said.

Under questioning from Commissioner Catherine Holmes, Ms Halbert rejected the suggestion DSS had been "turning a blind eye" in 2017 to income averaging to raise debts.

"There was no blind eye whatever, I had no skin in this game in 2017," she said.

The inquiry continues.