Former foreign minister Marise Payne has told a royal commission into robodebt she doesn’t know how early concerns over the scheme’s legality were left out of later policy documents.

Senator Payne was human services minister at the time the program was formulated, working under then social services minister Scott Morrison.

She appeared as a witness before the commission in Brisbane on Tuesday.

Senator Payne was asked if potential savings to the federal budget, combined with the difficulty of passing legislation, could have been reasons for the legal issues being omitted.

“How did the identification of the problem … drop off the radar by the time it seems (cabinet) considered the proposal?” senior counsel assisting, Justin Greggery, KC, asked Senator Payne.

“I don’t know the answer to that question, and I say that in all transparency,” she replied.

“There is an expectation, however, that when agencies advise you, on the face of a brief, that they are working together to address these issues.”

Asked who held responsibility for advancing the concerns, Senator Payne said ministers were always “ultimately responsible”, but must receive advice from their departments.

Early ministerial briefings from the Department of Human Services about the scheme suggested using Australian Taxation Office data as an alternative to the “cumbersome” method of cross-checking income declared by customers.

The briefings suggested “income averaging” as a way of arriving at fortnightly rates from annual tax data, resulting in $1.2 billion being saved from more efficiently identifying welfare discrepancies.

It was laid out in drafts about the proposed changes viewed by Senator Payne that “some of the options … would need legislative and/or policy changes”.

It was also noted that advice had been sought from the Department of Social Services, which advised “some proposals will come under significant scrutiny as not being consistent with the overall beneficial nature of social security law”.

Those legal concerns were not reflected in later government policy proposals, resulting in the scheme being implemented regardless, with ultimately disastrous results.

More than 381,000 people were wrongly pursued for welfare debts totalling more than $750 million, with several victims taking their own lives because of the distress it caused.

Commissioner Catherine Holmes questioned Senator Payne if, in viewing the draft briefings, she would have asked her department what the possible legislative changes were.

“I think at the stage at which the process was … (I would) not necessarily have asked for specifics at that point, no,” she said.

Also appearing at the commission on Tuesday was former Centrelink compliance officer Colleen Taylor.

Ms Taylor flagged issues with the robodebt scheme internally with Centrelink and says she received mixed responses from senior staff.

Her concerns included the increased reliance on ATO data to identify discrepancies, despite the method being highly unreliable.

“There was lots of reasons you could explain what the discrepancy was,” Ms Taylor said. 

She described what was being done at the time as a form of “stealing”, and said she ultimately chose to retire after becoming frustrated by the lack of response.

“We were a compliance unit, the whole point of our unit was to make sure people were doing the right thing, and here we were doing the wrong thing,” Ms Taylor said. 

By Duncan Murray in Sydney