Former top Department of Social Services lawyer failed to share advice Robodebt was illegal, royal commission hears

A former top federal government lawyer has revealed he did not share legal advice that the Robodebt scheme was illegal with the department responsible.

Key points:

Paul Menzies-McVey, who was previously chief counsel at the Department of Social Services (DSS), fronted the royal commission into the scheme in Brisbane on Tuesday. 

The inquiry is holding a final block of hearings into Robodebt, which used income averaging and tax and Centrelink data to calculate social security debts.

Mr Menzies-McVey was grilled by counsel assisting Justin Greggery KC and Commissioner Catherine Holmes over the fact he was aware of three separate pieces of legal advice that determined the income recovery scheme was unlawful, but did nothing, while working at DSS in 2019.

The advice was issued between 2014 and 2019.

When asked about draft legal advice issued by top-tier firm Clayton Utz about one year before he worked in the department, Mr Menzies-McVey said despite it being “excellent practice” to share legal advice between departments, he did not make the Department of Human Services (DHS) aware its existence.

“I don’t think I contemplated sending it to them … perhaps I should have,” he told Mr Greggery.

Referring to the same advice, Commissioner Holmes asked: “This is a bit of a concern because it’s saying that a program that the government’s been operating for a couple of years now actually is illegal … so it doesn’t trouble you that’s been left to fester?”

Mr Menzies-McVey replied: “I wouldn’t characterise the advice as saying that the program was unlawful”.

‘Magical thinking’

He told the inquiry the advice did not consider what inferences could legally be drawn if someone did not provide an alternative account of their income that disproved a debt notice, such as a bank statement.

However, he said he was not certain about the issue and did not seek legal advice about it because “the correct answer, whatever that may be, was being sought by the solicitor-general”.

Commissioner Holmes said it was “magical thinking” to suggest an inference should be drawn by a person’s failure to respond to a letter because they had no obligation to do so.

Mr Menzies-McVey said he believed the draft advice was “no longer of significance” and he “didn’t give much regards to it” during his time in the job because other advice was being sought.

He was asked by Mr Greggery: “You appreciated that if those advices were correct then the scheme under which debts were raised for the last three-and-a-half years under the various ideations of the scheme had no legal basis?”

In reply, Mr Menzies-McVey told the royal commission: “That would have been the consequence, yes”.

‘I’m not sure I turned my mind to that’

In a later exchange, Mr Menzie-McVey said he appreciated after viewing three sets of advice stating Robodebt was illegal that it would be a “very serious issue for the Commonwealth”.

Mr Greggery asked if he appreciated the continuation of the scheme while waiting for further legal advice had “very significant consequences for further recipients of debt letters”.

“I’m not sure I turned my mind to that,” Mr Menzies-McVey said.

However, he later said: “I would be uncomfortable, clearly, with the department oversighting a program that was unlawful of any type, especially a large program such as this.”

The royal commission was on Tuesday shown several emails, which outlined the number of people who had lodged applications for internal review after being subject to illegal debt letters.

One email shown to the inquiry showed in 2016, there had been 6,654 appeals out of 182,515 matters.

The royal commission continues.