The government has spent at least $400m to recover $500m from welfare recipients through the controversial robodebt scheme, a Senate estimates hearing has been told.

Under questioning by the Labor senator Murray Watt on Thursday night, department officials said the scheme had “raised” about $1.5bn in debts from welfare recipients since it was rolled out.

But only about $5oom had actually been repaid. Another $500m was the subject of a payment arrangement while the remaining money was “unconfirmed” and could be subject to an appeal, the Department of Human Services (DHS) said.

On Thursday night, Watt questioned the point of the scheme when the government only had “$100m to show for it”.

“I’m just concerned there’s been a litany of terrible stories,” he said. “So far, to have only recovered $100m. Does that meet your expectations?”

The department spent $375m on the robodebt scheme between 2015-16 and 2017-18, while about $200m in administrative costs was budgeted for the current financial year, officials said. In total, it meant the scheme would have cost at least $400m to the end of 2018, Watt said.

The running costs have increased each year as the department has been forced to redesign the program amid public criticism.

The DHS secretary, Renee Leon, said: “In the most recent budget we readjusted the costs and the saves because the original measure was costed on the assumption that the great bulk of the work would be done online without staff involvement.”

“We have now applied more staff support and involvement to it.”

Over the next four years, the government forecasts it will recover about $4bn from the robodebt scheme, officials said.

Leon said it was common that social security debts were never fully repaid because customers were on low incomes.

“It’s not a reason to allow the integrity of the welfare program to deteriorate because our customers can’t necessarily repay what they owe immediately,” she said.

Leon said the federal budget did not “run on a cash basis”, which means the debts the government believes it is owed are included in the budget balance even if the money may never be recouped.

The figures come as the program faces a legal challenge from Victoria Legal Aid, which argues the way Centrelink calculates a debt is unlawful. More than 400,000 debts have now been initiated over two years. People are asked to provide evidence to disprove the debt, which is calculated using income-matching from a person’s tax return.

Officials also faced a grilling about how they had responded to figures that showed 2,030 people had died after they were sent a debt notice, including 812 who were considered vulnerable by Centrelink. About one in five were under the age of 35.

The Greens senator Rachel Siewert stressed that she was not suggesting a “causation” between the letters and the deaths.

But it was vital the department investigate the figures “so there can be some analysis done on whether there is a level of association”, she said.

“It seems to me the department is in denial about the stress and anxiety that robodebt has caused,” Siewert said.

Leon said the figures did not suggest there was “an elevated death rate” when compared with the total cohort of welfare recipients.

“It’s not to say we’re not troubled that people die,” she said.

Linking the debt letters to suicide was a “a dangerous path to go down”, she said, because vulnerable people may be “triggered by that assertion”.