Centrelink is being urged to suspend its controversial "robo-debt" program until a raft of apparent problems are fixed.
A Senate inquiry into the widely criticised automated debt recovery scheme has handed down its final report, making 21 recommendations on ways to fix the "broken" system.
The committee found that central to the saga was a lack of procedural fairness, from the time the scheme was conceived and established, through to how debts were calculated and affected clients treated.
"The system was so flawed that it was set up to fail," the committee said in its report.
"This lack of procedural fairness disempowered people, causing emotional trauma, stress and shame."
The committee said all debts determined through "income averaging" should be re-assessed, the onus be shifted, and the system redesigned, including a robust risk assessment.
"Enough people have been hurt by this program which was designed to get money back quickly regardless of the impacts and whether it is legitimate debt," Greens senator and committee chair Rachel Siewert said.
"Urgent action needs to be taken by the government before more harm is done."
But Human Services Minister Alan Tudge, who is responsible for Centrelink, shot down the report.
"This is a politically motivated and factually inaccurate report, reflecting the fact that Labor and the Greens don't support auditing of the welfare system," he told AAP.
Mr Tudge focused instead on an earlier ombudsman's review, which found asking recipients to explain discrepancies identified through data matching was fair and reasonable.
Coalition senators produced a dissenting report, but acknowledged room for improvement around case selection and data-matching techniques, interactions with recipients and debt management processes.
However, they rejected the argument the rollout lacked procedural fairness, saying while the system may have been been confusing in its early stages, there were always avenues available for review.
More than 200,000 people have been snared by the robo-debt system since mid-2016 and at least one in five debt notices have been wrong.
Centrelink has so far used the automated system to examine people's wages declared to the tax office, but from July 1 also intends examining income from assets and investments.
"This system should be halted immediately. There's a plan to expand it which will affect aged pensioners greatly. The government should halt immediately and reconsider," Labor senator Murray Watt told parliament.
