A senior official denies that he “manipulated the truth” to the ombudsman on the legality of the robotic debt scheme

A public official briefly involved in consulting on a proposal for what became the robotic debt scheme denied “manipulating the truth” to hide departmental knowledge of its illegality from a federal watchdog.

In the most explosive royal commission questioning of the botched plan to date, former Department of Social Services official Catherine Halbert was repeatedly challenged for her involvement in a 2017 ombudsman investigation into the plan.

Related: Robodebt royal commission said ‘misrepresentation may have made its way down the toilet’

Halbert, who had briefly acted as an assistant secretary in the Department of Human Services, was involved in providing feedback on initial briefing documents for the robo-debt proposal in early 2015. That feedback warned that the program’s core method , known as income media, was illegal and required legal modification.

The royal commission listened when the Commonwealth Ombudsman in 2017 asked to see the department’s legal advice since 2015, Halbert was involved in sending a letter explaining the DSS’s position to the watchdog. The inquiry heard that the letter was drafted by another DSS official but then sent by Halbert to another senior official, Serena Wilson.

The letter told the ombudsman that as the robodebt plan was being developed in early 2015, the DSS had “gained a better understanding” from the Department of Human Services (DHS) “of how the revised process would meet legislative requirements.” .

But previous evidence has suggested that DHS “misrepresented” the plan in cabinet documents, suggesting it involved no changes to the way welfare debts were raised. Two years later, DSS officials were said to have been amazed at how well the RoboDebt program worked.

The inquiry felt that Halbert’s portrayal of him was “simply untrue”.

Senior counsel assisting, Justin Gregery, KC, said it was “abundantly clear” from the evidence that he had sought to “manipulate the truth” at the ombudsman.

“I was not trying to mislead the ombudsman’s office and if I spelled it wrong, that’s my responsibility,” Halbert replied.

“I felt no obligation to justify the legality of the scheme. What I was explaining to the Ombudsman was that the proposal in our minds… had changed sufficiently that it no longer violated legislative requirements.”

The commissioner, Catherine Holmes AC SC, intervened several times during Halbert’s rehearsals to bring her back to questions.

On one occasion Holmes said to Halbert, “You are in the statement, you are bound to tell the truth.”

Halbert replied, “I’m trying to tell the truth, Commissioner.”

Halbert repeatedly insisted that the department “wasn’t trying to hide it from anyone.” He said the information he provided to the ombudsman was based on advice provided by others. She said she wasn’t directed to portray the situation the way she did.

Halbert is the second DSS witness who came under scrutiny because she was involved in the design of the robodebt’s initial plans and ombudsman investigation in 2017.

Halbert’s comments echoed the evidence of his colleague, Wilson. Halbert said DSS officials were “angry” and “surprised” when they learned that DHS had been using “income averaging” to increase debts.

This is because DSS’s position in 2015 when Robodebt was formulated was that this approach was illegal.

When the scheme erupted into controversy in 2017, Holmes said DSS had two choices.

“One, they can open up with the ombudsman and say, ‘This is a surprise to us. We do not consider it as within the legislation. We told them at the beginning,’” Holmes said. “And the other option is to try to get behind DHS and … find legal counsel, which would provide a possible excuse for that.”

Halbert replied, “We weren’t looking for an excuse for DHS.”

He added, “We weren’t trying to hide it from the ombudsman.”

Halbert had previously understood that he drafted the letter, but later evidence confirmed that it was written by another DSS official. But he said that didn’t change his responses to the royal commission about it.

The inquiry heard that DSS subsequently sought a second internal legal advice and gave the green light to the robotic debt scheme.

The department “joined” the new advice with the 2014 advice which questioned the legality of robodebt and provided both to the Ombudsman, saying his legal advice was that “average income” could be used as a last resort to increase debts.

Related: Robodebt: a conspiracy or the stuff?

In possession of both legal opinions, the ombudsman went on to say that the scheme was within legislation and the coalition government used its report to deflect criticism from that point forward.

The inquest heard Thursday said Halbert had “directed” a colleague to “mitigate” initial legal concerns over robo-debt in 2015. He said he did not recall the conversation.

The royal commission continues.

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