Former Department of Human Services secretary Kathryn Campbell had "fundamentally flawed" knowledge of Robodebt

Kathryn Campbell, former secretary of the then-Department of Human Services from 2011 to 2017, continued her evidence at the robodebt royal commission on Friday, speaking about "significant changes" under her leadership to how debt was calculated, which resulted in thousands of incorrect debt notices.

The commission heard the Department of Social Services had advised the Department of Human Services and the then-minister for social services Marise Payne that legislative change would be needed for Australian Taxation Office PAYG income data to be used to automatically calculate debt in 2015.

Both senior counsel assisting Justin Greggery KC and Justice Catherine Holmes questioned Ms Campbell's understanding of what changes were required to make the scheme lawful and how it would affect her department.

Justice Holmes said Ms Campbell had a "lack of curiosity about what that legislative change might entail" to which Ms Campbell said "in hindsight, it looks like a lack of curiosity, but I note that at that time, we were relying on the policy departments to provide the legislative advice".

Ms Campbell said she did not question whether legislative change had been made when the scheme was announced in the 2015-16 federal budget, and when she eventually asked the Department of Social Services in 2017, she was told changes to legislation were no longer needed, and did not seek external legal advice.

She believed the scheme was lawful at the time if the department gave recipients the opportunity to engage and provide additional information about their income.

"I was advised that when DSS became aware of the elements of the proposal that included recipients being able to respond and provide evidence that the view had been taken that legislation was no longer required and I had worked off that premise in 2017," Ms Campbell told the commission.

She said her staff thought she was "fixated on the ability of a recipient to respond through measures such as registered mail to ensure that the recipient was aware of the issue, simplifying the IT system, providing contacts and having a number of engagements with the recipient before the debt was issued".

However, Mr Greggery said the opportunity to respond was already part of the 2015 scheme proposal, making Ms Campbell's understanding of the 2015 advice and 2017 advice "plainly inconsistent".

Ms Campbell also said she was not aware of the clauses in legislation that were used to penalise people who did not respond to debt letters and believed at the time recipients had the obligation to respond.

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"I think that had been a practice that had been in place for over 30 years," Ms Campbell said.

Justice Holmes said: "Burglars probably use the same practices over 30 years, it won't make them lawful."

Ms Campbell responded: "I wasn't suggesting that it was lawful. I was suggesting that it had been the practice and that there were many elements within DHS that I don't think I turned my mind to the legality of because they had been in place for many years."

However, despite the changes introduced through the robodebt scheme, Ms Campbell still did not seek legal advice.

Mr Greggery called Ms Campbell's "assumption about legality" of the Robodebt scheme "fundamentally flawed" and called the scheme "a massive failure of public administration", which Ms Campbell agreed with.

Ms Campbell will return to the commission on December 5.

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