At least half of the Department of Human Services' compliance workforce has been redeployed to review debts that could have been raised by a unlawful income averaging.
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But officials won't confirm if the massive reassignmnent of staff was due to advice about the legality of the scheme, attributing it instead to ongoing "refinement" of the scheme.
People who have received a "robodebt" notice also won't find out if they will get a refund or if their debt will no longer be pursued until next year, but could still have their tax returns garnished in the meantime.
Last month Government Services Minister Stuart Robert announced the government would no longer use average income data from the tax office as the only basis to raise a debt against a welfare recipient and that all debts already raised in this way would be reviewed.
A week later the government lost a Federal Court case that challenged the controversial "robodebt" scheme - where current and former welfare recipients have been served with debt notices after the department averaged their annual income across 26 fortnights instead of referring to data reported at the time.
At least 750 staff are working to determine how many people are affected, in what Deputy Secretary Ros Baxter called a "very robust and highly manual process".
There was no data set of people whose debts had been raised using income averaging, the Senate committee heard, and it won't be known how many people were affected until early next year.
Evidence given at Monday's Senate committee hearing contradicted previous statements made both by Mr Robert and Attorney General Christian Porter.
Mr Robert has maintained only a "small cohort" of the 734,000 debts raised against people since the online compliance program started three years ago would be affected.
But officials said they had no idea how many people were affected, and couldn't provide answers on how many people had been identified as part of the review process so far. Every one of the debts would need to be checked, officials said.
The minister had also said the reviews would be limited to people who hadn't engaged with the department before a debt was raised based on averaged income data, but officials conceded on Monday people who had responded to the department could also be included.
"We are looking at all of the reviews, and you're right , that will include people who haven't engaged and people who have engaged," Dr Baxter said.
Dr Baxter wouldn't answer questions on when the department, now known as Services Australia, had received legal advice on the scheme, only saying that advice had been sought "from time to time" on different aspects of the program.
Dr Baxter signaled the intention to claim a public interest immunity claim on questions asked by Labor Senator Deborah O'Neill on when legal advice was given on the program, citing an ongoing case in the Federal Court and an upcoming class action against the scheme.
Attorney General Christian Porter said at the National Press Club in November that legal advice had "fed in" to the decisions made by the department and the minister.
The department is yet to start contacting people whose debt was raised using income averaging, with a letter still in the process of being drafted.
The department confirmed no new debts were being raised against people where income averaging was the only basis of the debt.
But officials did concede people with debts already raised but not yet flagged for review could find their tax returns garnisheed under an automated system.
General Manager of Debts and Appeals Anthony Seebach said if a person's file with the tax office had already been marked with a "red flag" from the Department of Human Services due to a debt under the online compliance system, their tax return would still be garnisheed.
Greens Senator Rachel Siewert was astounded the process would not be stopped while debts were being reviewed.
Dr Baxter said the department would take on board the suggestion from Senator Siewert that the process be looked at to stop debts being garnisheed if they could later be found not to be owed.