The commissioner overseeing the robodebt royal commission has said there would have been "an ice cube's chance in hell" of the debts of some people being erased, after a bureaucrat tried to defend the scheme.
Former department of human services general counsel Matthew Roser told Wednesday's hearing a sworn affidavit in the court case of Melbourne nurse Madeleine Masterton gave credibility to her statement that she had properly declared her income in the past.
The statement drew the ire of Commissioner Catherine Holmes.
"So if all those people who had contacted Centrelink saying 'but I declared my income properly' had just put in statutory declarations, that would've been accepted?" she said.
"The assertion, sworn or not, that income had been correctly declared wouldn't have stood an ice cube's chance in hell against the (online compliance intervention) program."
Mr Roser responded that he assumed that would have been the case but he didn't work in the relevant department.
Ms Holmes then expressed her "incredulity" that the affidavit from Ms Masterton's solicitor was taken more seriously than customer complaints.
"It wasn't even her sworn account, it was her solicitor's affidavit, it was hearsay," she said.
"So, in an evidentiary sense, it was worth even less than your average Centrelink customer ringing up and saying, 'I declared my income correctly'."
Robodebt ran from 2015 until 2019, recovering $750 million from 380,000 people, controversially using annual tax office data to calculate average earnings.
It was allowed to operate despite concerns it was unlawful, with several people taking their own lives while being pursued for wrongly assessed debts.
The hearing on Wednesday also heard that eminent lawyer Peter Hanks had warned of the legal and moral consequences of the robodebt scheme.
Mr Roser agreed Mr Hanks' warnings were something to be taken seriously given his stature in the legal profession.
He said there was no need for him to take the warning further with "all the relevant people" at a conference where Mr Hanks spoke on the legal concerns.
"We were all quite clear about the potential (legal) exposure and that it could be significant is probably an understatement on a number of fronts," Mr Roser told the hearing.
Mr Hanks wanted the scheme tested in court but Mr Roser said the department pushed to have Ms Masterton's debt recalculated and proceedings ended as soon as possible.
Counsel assisting Angus Scott suggested one reason to avoid a court determining on the legality of the scheme was to ensure "there is no public revelation of the extent of unlawfulness".
The department's former acting chief counsel Tim Ffrench told the hearing people genuinely believed the scheme was lawful and there were "audible gasps" when he revealed advice saying the department's court prospects were "poor".
"There was no judicial authority to support a proposition that income averaging in a social security context was lawful," he told the hearing.
"My understanding was the department's position was weak."
Mr Roser denied the department's approach was to "hunker down and hope they don't sue or worry about it when they do sue".
Mr Ffrench also told the hearing the culture in the department would have prevented people from coming forward with concerns about the legality.
He said he believed bureaucrats were scared to raise issues with the scheme because of a hostile attitude by the people in charge of making the policy who "were determined to achieve a particular outcome for government".
"I believe the culture and environment at that time prevented people from asking the questions that they should have asked because of the fear that those questions would be seen as potentially impertinent," Mr Ffrench said.
