Labor and the Greens are demanding a probe into the discredited robodebt scheme, which is also facing a class action alongside an ongoing Senate inquiry.

But the prime minister says the government is dealing with the issue.

"We're aware of what the issue is and we're fixing the problem, we're getting the payments made," he told reporters in the NSW south coast town of Eden on Tuesday.

"Let's not forget what this issue is about - the use of income averaging as the primary reason for raising a debt."

Mr Morrison has apologised for the scheme and promised to reimburse more than 300,000 people targeted.

The repayments will exceed $700 million.

Malcolm Turnbull was prime minister when the scheme was rolled out and has apologised for the system.

"This was clearly not handled well at all," he told the ABC.

"I'm very sorry it has created the dismay and distress that it has.

"It failed and it obviously had serious issues of legal validity, so yes, I am very sorry that that worked out the way it did."

He said he had assumed cabinet ministers and their departments had worked through all of the issues, including legal validity.

Opposition Leader Anthony Albanese wants the royal commission to uncover exactly when the government knew the program was illegal.

Mr Albanese shared the story of a man from his electorate who was on welfare because he was undergoing chemotherapy and was chased for a robodebt.

"That added to the traumatic impact on his health. And that's just one story - there are thousands of stories just like that," he said.

Labor says the inquiry could also examine how much the scheme cost taxpayers, how many debts were issued and how many people were harmed.

The Greens have welcomed Labor's support for the probe, with Senator Rachel Siewert saying the party will continue campaigning for justice.

The scheme matched Australian Taxation Office and Centrelink data to claw back overpaid welfare payments.

It was ruled unlawful last year, with the Federal Court saying Centrelink could not have been satisfied the debt was correct.

The previous Labor government introduced a similar process in 2011 but had each case reviewed by a staff member at the Department of Human Services, while the coalition moved to a fully-automated system in 2016.

The class action against the scheme looks set to go to trial over three weeks in the Federal Court, starting in September.

Australian Associated Press