Responding to a June report which slammed the process of issuing debt notices to thousands of Australians based on matching and averaging of income records held by Centrelink and the Tax Office, the government said some third parties' complaints had been "aimed solely at scoring political points".

The inquiry said debts calculated by averaging of income across a 12-month period should be reassessed, with the system redesigned and effective risk assessment process put in place.

It said the program had caused a "profoundly negative impact on the lives of thousands of Australians" and was responsible for trauma suffered by innocent welfare recipients required to prove they did not owe money demanded by Centrelink.

In April, a Commonwealth Ombudsman report found Centrelink's demands on former welfare recipients were neither "reasonable" nor 'fair".

On Tuesday, the government said there was no evidence to support the recommendation that the online system should be put on hold.

"The government's clear position, supported by the independent Commonwealth Ombudsman report, is that it is appropriate to ask people for information when there are differences between their income details held by the Department of Human Services and other third parties such as the Australian Taxation Office," it said.

"This principle has been in place under successive governments and has not changed.

"Welfare payment recipients have a responsibility to provide the most current information to maintain eligibility.

"The Australian government will continue to invest in digital technologies to make government services simpler, faster and more efficient, making it easier for the public to work and interact with government."

It said the Department of Human Services was in the process of writing to all recipients of debt notices from the online system to remind them of their review rights.

The department was seeking to call recipients who had been referred to debt collection agencies.

The government said it took seriously use of individuals' private information and income reviews were only used when recipients failed to provide the information needed to calculate their fortnightly income.

Controversy about debt demands has dogged the government since late 2016, despite Human Services Minister Alan Tudge maintaining the system was working effectively.

Greens community services spokeswoman Senator Rachel Siewert said the response was grossly inadequate and showed contempt for recipients of debt notices.

"It is frankly insulting to the people who gave evidence at the inquiry to be referred to in this response as third parties looking to score political points," she said.

"The comments that the chair's report relied on evidence that was inaccurate is insulting to those who gave evidence.

"The people who gave evidence at the inquiry were vulnerable people, whose data had been automatically matched without oversight, people who had been harassed by debt collectors days before Christmas, people living below the poverty line wrongly told they only had a number of weeks to pay back thousands of dollars.

"This inquiry was about the lives of vulnerable Australians," she said.

Senator Siewert rubbished government suggestions recipients had been given a reasonable opportunity to provide information and explain any discrepancies.

"Is it reasonable to ask people who have worked sporadically over ten years, moved countless times and escaped domestic violence to provide pay slips from a job they had five years ago for three months?"

Last month the government admitted it issued robo-debt recovery notices to 20,000 welfare recipients who were later found to owe less or even nothing.