A royal commission will seek to find out whether the Commonwealth government was "recklessly indifferent" to the legality of the robodebt scheme.
The first block of public hearings have begun in Brisbane, with senior counsel Justin Greggery outlining questions the commission will seek to answer.
This will include examining the development of the scheme, its legality and how departmental checks and balances went so wrong.
Hundreds of thousands of Australians were caught up in the robodebt debacle, which recovered more than $750 million from nearly 400,000 people.
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.
In his opening statement, Mr Greggery said authoritative legal advice was not sought from the solicitor-general before the scheme was implemented.
Instead, the departments responsible for overseeing the scheme sought internal legal advice.
"That advice raised significant questions about the legality of the scheme," Mr Greggery said.
In December 2014, the social services department received advice that "the proposal to smooth a debt amount over an annual or other defined period may not be consistent with the legislative framework".
Mr Greggery also flagged there was a "significant volume" of material outstanding from the Commonwealth required by the commission.
