A Labor- and Greens-dominated Senate committee has called on the Government to suspend Centrelink's controversial debt recovery program until it reconciles "a fundamental lack of procedural fairness".

Key points: Committee report made 21 recommendations, including an overhaul of privacy policy

Committee report made 21 recommendations, including an overhaul of privacy policy Report said lack of procedural fairness was evident at every stage of debt recovery program

Report said lack of procedural fairness was evident at every stage of debt recovery program Coalition senators acknowledged initial rollout "should have received more robust planning"

That recommendation has been rejected by Coalition senators in a dissenting report, although they have acknowledged that the program had flaws during its initial stages that could have been avoided.

The Department of Human Services (DHS) has cross-referenced Australian Tax Office and Centrelink data to determine overpayments for years, but the system was automated in mid-2016 to save money.

With human oversight greatly reduced, thousands of Australians were incorrectly told by Centrelink that they may have outstanding debts that needed to be repaid or clarified.

Some people were contacted by debt collectors before they realised they needed to correct their records to avoid repayments — a problem the Government has sought to amend.

The committee report made 21 recommendations, including an overhaul of privacy policy, and comes after the Commonwealth ombudsman found the program was treating some clients unfairly.

The report considered more than 150 submissions and 1,400 emails and found the program caused avoidable distress by placing the onus of proof on clients to determine the accuracy of Government records.

It said that a lack of procedural fairness was evident at every stage of the debt recovery program, from the drafting of legislation to communication with the public and call centre operations.

"The system was so flawed it was set up to fail," the report said.

Chair of the committee, Greens senator Rachel Siewart, said while she was not opposed to the data-matching process, more human oversight was needed.

"The rest of the committee came away from this deeply distressed and concerned about how people have been affected by this," Senator Siewert told the ABC.

"They knew they were sending out letters to people who didn't have debts — they didn't have a human checking them.

"There are a series of flaws that together show a lack of procedural fairness."

Coalition reject central claim of report

In a dissenting report, Coalition senators acknowledged that the program caused concerns to many members of the community and that it could have been improved during its early stages.

"It has been widely acknowledged by the Government that the initial rollout should have received more robust planning and consideration of the impact and operation of increasingly moving to digital engagement," the report said.

"It was also clear through the early stages of the rollout that further effort was required to ensure customers had sufficient information and access to resources to understand their requirements and to navigate the established review processes."

But the senators said some submissions to the inquiry were only interested in scoring political points and "inflaming the situation", rather than resolving the situation.

They called on DHS to improve its data capabilities to consider additional information, such as pensions, trust income, family day care and financial income, when making assessments.

Human Services Minister Alan Tudge has repeatedly stood by the program, saying that unfortunately some people deliberately defraud the Commonwealth and compliance measures are necessary.

Labor's spokeswoman for Human Services Linda Burney said the report proved the program was not "working well", as Mr Tudge once claimed.

"This is now beyond the pale, if the Turnbull Government won't fix a system that is punishing honest Australians it is either not listening or deeply out of touch," Ms Burney said.