Robodebt scandal: more than 3,000 deceased estates owed refunds by Australian government

The deceased estates of more than 3,000 people are among those owed robodebt refunds, while one person has been repaid $30,000 unlawfully taken from them under the botched Centrelink program.

As officials faced a fresh grilling about their decision to continue the scheme despite warnings dating back to 2017, Services Australia told Senate estimates on Thursday night it had now repaid $697m of the $721m it has agreed to repay after conceding the program was unlawful.

There have been 489,671 debts refunded in total, however the agency has been unable to contact about 28,000 people who are still owed refunds or should have their debts zeroed.

Related: Robodebt: fresh claims against federal minister Alan Tudge delay court trial

The Services Australia chief executive, Rebecca Skinner, said it had attempted “three or four rounds” of contacting those customers using mail, email, phone calls and SMS.

Under questioning from the Greens senator Rachel Siewert, officials confirmed there were 3,300 deceased estates that were owed refunds.

It is unclear whether these refunds relate to debts raised against the estates of people at the time, which did occur, or whether the individuals had died after repaying the debt.

About 6% of people are yet to have their debts refunded or wiped, which also included some people who are now in prison and people who are bankrupt.

The hearing was told 1,620 people on the cashless debit card had received refunds, with an average of $1,811 and a highest $30,072. The money is paid into the person’s regular bank account, rather than on to the card.

Michelle Lees, the agency’s deputy chief executive, said the agency was working to ensure the money would be paid to the right place.

About 373,000 people are expected to get refunds through the bungled program, which ran between 2015-2019, though it is also the subject of a class action seeking interest and damages.

Gordon Legal claimed in court documents last month that the government knew the scheme was unlawful while it was running, an allegation the commonwealth strongly denies.

The claim is based in part on 76 administrative appeals tribunal decisions that overturned robodebts throughout the life of the scheme.

The Labor senator Deborah O’Neill told estimates the government had failed to appeal the decisions to a higher level of the tribunal, meaning most were shielded from public view until very recently.

Arguing they showed a “pattern” where the tribunal had warned the program was unlawful, O’Neill read from a March 2017 judgment that stated the debt in question was “not consistent with the requirements of the legislation”.

“Isn’t that a fireworks moment in the department where you go, ‘Oh my God. We’re not complying with the law’?” O’Neill said.

“Isn’t that the moment when you would immediately cease the practice?”

Kathryn Campbell, the secretary of the Department of Social Services, confirmed she was aware that some debts had been overturned at the time, though she said she was not familiar with the particular case.

Campbell, who previously led the Department of Human Services, which administered the program, said the cases were “generally determined on the individual facts”.

Related: Coalition senators suggest robodebt victims buried their heads in the sand to deal with scheme

“I knew that some had been returned and overruled,” she said. “And I knew that some had been returned and upheld.

“I wasn’t aware that there was a pattern [of debts being overruled]. A pattern would indicate everything was the same.”

Campbell said there had also been cases where the tribunal had directed Centrelink to use the “income averaging” method that the government has now conceded was unlawful.

“I think it’s fair to say that there was some ambiguity about the AAT decisions coming back,” she said.

Campbell said she was of the view that the scheme was legal when it was established in 2015, and that she had relied on advice from the Department of Social Services.

She would not clarify whether it was legal advice, citing a public interest immunity claim.

While she was head of the Department of Human Services in 2015, Campbell noted that the Department of Social Services was the “policy entity” when the scheme was created.

Estimates heard that among the factors the department was expected to consider when deciding whether to appeal a decision was whether there was a point of law that needed to be clarified of defended.

Siewert said: “What I don’t understand is … why when points of legislation and law were brought up they weren’t flagged?”

Annette Musolino, a top Services Australia official, disputed that the decisions were not flagged.

She said officials would look at “whether there was an ambiguity that needed clarification”, among other factors.

The federal court class action is set down for trial on 16 November.