Former prime minister Scott Morrison has been described as having little empathy towards welfare recipients as he looked for budget cuts instead of policies.
A former deputy secretary to the human services department says then minister Mr Morrison was apathetic towards policy when she would try to bring proposals forward.
Serena Wilson told the royal commission into the illegal robodebt scheme it was her recollection that the government rarely started policy discussions about the problems, but rather focused on "finding cost savings".
Asked about Mr Morrison's comments of being a "welfare cop", she said the government "appeared to be looking for a problem".
In one email, she wrote: "They had a strong view of 'deserving' and 'undeserving' poor. In my opinion, there was little empathy for, or understanding of, those needs (of disadvantaged people) within the coalition government and ministerial staff."
Ms Wilson said this was exemplified in coalition budgets between 2014 and 2018, where the vast majority of her work involved identifying savings options to cut social security expenditure.
She said the government held a "fairly pejorative view" of many people on welfare, particularly those on Newstart - now JobSeeker - or youth allowance who were receiving the payments due to being unemployed.
The commission has been told senior bureaucrats were aware of the potential illegality of the scheme, but were either overruled by the people in charge of deciding the department's policy, or too scared to come forward.
The department's former acting chief counsel Tim Ffrench said "the culture and environment at that time prevented people from asking the questions that they should have asked, because of the fear that those questions would be seen as potentially impertinent".
Both Mr Ffrench and Ms Wilson pointed to former human services department secretary Malisa Golightly, who has since died.
Ms Wilson said she felt "intimidated and bullied" when she worked with Ms Golightly in a previous role.
But she said she didn't pursue bullying claims because "it's a very fraught area in the public service".
"I didn't perceive it would likely be successful in the organisation I was working for at that time," said Ms Wilson, who instead opted to look for another job.
But she said she had no reason not to take Ms Golightly's assurances about the income averaging scheme.
"I didn't believe she was a deliberately untruthful person," Ms Wilson said.
Former human services ministers Stuart Robert, Marise Payne and Michael Keenan will front hearings next week.
The commission heard evidence that the department wanted the debt of a plaintiff reassessed to end legal proceedings as soon as possible.
Counsel assisting Angus Scott suggested one reason to avoid a court determining the scheme's legality was to ensure "there is no public revelation of the extent of unlawfulness".
Mr Ffrench said people genuinely believed the scheme was lawful, despite there being "no judicial authority to support a proposition that income averaging in a social security context was lawful".
He also described the legal position as "weak".
Mr Ffrench said he recalled then-minister Mr Robert telling him "it's just an opinion until we get a judicial declaration from a court", when presented with advice from the government solicitor that the scheme was potentially illegal.
He said he overheard then attorney-general Christian Porter tell Mr Robert the solicitor-general's advice about the illegality was "right, mate".
The royal commission is set to hand down its report on June 30.
