It's a "mystery" why legal and policy advice flagging issues with a proposal for the robodebt scheme potentially was not provided to cabinet, a royal commission has been told.
The commission is investigating how the problematic scheme was rolled out despite departmental advice raising significant questions about its legality when it was proposed.
The scheme began in 2015 under the Liberal-National coalition and falsely accused welfare recipients of owing the government money.
Debt notices were issued by a process called income averaging, which compared people's reported income with tax office figures.
Hundreds of thousands of Australians were caught up in the debacle, which recovered more than $750 million from nearly 400,000 people.
The scheme was initially proposed by the Department of Human Services (DHS), now known as Services Australia.
The commission heard that when the Department of Social Services (DSS) was asked to provide legal advice in 2014, it initially rejected the proposal.
Senior public servant Matthew Flavel, a deputy secretary at DSS, appeared before the commission on Tuesday.
Mr Flavel told the commission he had not been able to find documents to suggest advice related to the proposal's risks was passed on to the minister in charge.
"There is no evidence of a piece of advice from DHS to the minister for social services identifying risks," he said on Monday.
Asked why, he simply said: "It is a mystery."
"In the early part of 2015 these concerns were raised with DHS ... the critical issue is what happened and what was changed or not changed in the proposal that went to (cabinet)," Mr Flavel said.
Given Mr Flavel commenced in his role in 2020, several years after the scheme was implemented, he had not seen the document given to cabinet.
He said that document would need to be seen by the commission in order to determine whether ministers were made aware of the legal problems.
Cabinet documents are generally immune from proceedings and remain confidential.
Last week the commission heard legal advice from DSS in 2014 should have stopped the scheme from going ahead.
The advice raised significant problems with the scheme's debt collection method.
Legal advice sought after the scheme was rolled out also identified issues with the policy but this was not taken on board by the departments.
The commission is accepting submissions from people affected by the scheme until February 2023.
A final report is due to be handed down by mid-April.
