Robodebt threats weren't 'duress', government tells court

Lawyers representing the government have also denied that it had a duty of care to welfare recipients or that they were financially vulnerable.

In documents filed in the Federal Court, the government has admitted that averaged fortnightly income led to debts being raised based on "false" assumptions.

The defence, obtained by The Canberra Times, denies that people receiving the debt notices would have assumed they were correct because they came from the government, with its associated authority.

Gordon Legal argued in its statement of claim that "the Commonwealth owed the applicant and group members a duty to take reasonable care to avoid causing them loss and damage" in raising debts and demanding repayments.

But the government said it "denies that it owed the applicant and group members the duty alleged."

The government has refused to reveal its legal advice on the robodebt program, where an automated process matched welfare recipients' reported data to their annual reported income to the tax office.

Where a discrepancy was detected, the tax office data was averaged out over the 26 fortnights in a year, leading to debts being raised against hundreds of thousands of people.

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Internal tax office emails show the government knew late last year debts raised in this way had no legal basis.

On the same day those emails were sent, Government Services Minister Stuart Robert announced the government was halting the program, and would review all debts raised by income averaging to determine whether a debt really did exist.

While departmental officials said in December they expected to have identified how many debts had been raised through the process early in the new year, it is yet to be completed.

"The process is highly manual, in terms of finding the data, and complex, as I informed the House," Mr Robert said in question time last week.

"It's not appropriate to pre-empt that process."

Mr Robert has not conceded that the program is unlawful, and said pausing debt recovery was a "refinement" of the program.

The class action is not the first time the debt program has been challenged in court, with the government losing a test case run by Victoria Legal Aid last year, where it conceded it had no legal basis to raise a debt based on averaged income.