A robodebt victim has described how the botched program made him feel like a criminal and still affects his mental health five years after the unlawful debts were raised.
His evidence came as the former chief legal officer for the department of human services overseeing the scheme, Annette Musolino, admitted she "should have done more" to follow up on questions about its legality.
Matthew Thompson, who lives on a rural property in Tasmania, was incorrectly told he owed $11,000 for accessing Newstart and the sickness allowance between 2012 and 2015.
This included nearly $1000 in "recovery fees" added by the department for declaring his income incorrectly.
Mr Thompson worked casually as a photographer for the Mercury newspaper in Hobart and had fluctuating shifts and pay.
Recently diagnosed with generalised anxiety disorder, Mr Thompson told the commission he had struggled with his mental health throughout his life and at times it affected his ability to work.
He described feeling "shocked" at receiving two Centrelink letters in 2018 raising the debt and had to find his pay slips from the period, which took a lot of time.
"Dealing with Centrelink is a full-time job," he said on Wednesday.
Mr Thompson later had his Newstart debt reduced and eventually wiped.
In August 2020 he received a letter saying Centrelink no longer calculated debts in the same way and it had been reduced to zero.
"There was a bit of relief but the damage had already been done," Mr Thompson said.
He followed the royal commission closely and felt compelled to give evidence after he watched former prime minister Scott Morrison being questioned.
"After Scott Morrison's appearance - I was watching the whole thing - that night I couldn't sleep. I was furious and wound up," he said.
"The robodebt scheme has had a lasting effect on me as it had on many others. It made my mental health worse. It made me feel like a criminal and a cheat."
He said the way politicians talked about people who needed support made him feel "sad and sick".
"It seems to me that the powerful people are always able to take advantage of vulnerable people and the gap between rich and poor increases ... I hope this commission changes that."
Former chief legal officer Ms Musolino, who now works as chief operating officer at Services Australia, gave evidence to the commission for a second time.
The commission previously heard from former departmental secretary Renee Leon who said Ms Musolino did not communicate that she was aware of legal advice from the Australian government solicitor who questioned the legality of income averaging.
Prof Leon said Ms Musolino assured her the department was confident of its legality.
Yet Ms Musolino said she recalled neither this interaction with Prof Leon nor the draft legal advice in January 2017, despite it being sent to the chief counsel inbox.
"We had an entrenched view at that point that it was lawful," she said.
Ms Musolino said, on reflection, the department relied too heavily on this "entrenched view" rather than investigating the legality of the scheme.
When criticisms were raised in July 2017 by Peter Hanks, an expert in constitutional and administration law, Ms Musolino tasked other members of her team to examine them.
"In hindsight, I should have done more, I should have been more alert ... I thought I had controls in place that if issues or advice needed to be brought forward, it would be," she said.
