The Turnbull government’s robo-debt program involves enforcement of “illegal” debts that in some cases are inflated or nonexistent, a former member of the Administrative Appeals Tribunal has said.

The scathing indictment of the program is contained in an academic paper by Prof Terry Carney that also accuses Centrelink of failing to defend the legality of debts in the AAT and suggests the tribunal should set aside debts until the agency has proved the amounts are correct.

The criticism has been echoed by the National Social Security Rights Network and the Welfare Rights Centre, which warned cases of false debts were being routinely challenged and reduced or completely wiped in the tribunal.

Carney explained the robo-debt program calculates welfare recipients’ income and averages it over fortnightly periods rather than discovering their actual income for each and every fortnightly period which, he writes, is the proper basis for calculating the debt.

Carney said when Centrelink asks for payment of alleged debts or evidence to disprove them, “most vulnerable alleged debtors will simply throw up their hands, assume Centrelink knows that there really is a debt, and seek to pay it off as quickly as possible”.

He said the welfare agency did this even though a report by the commonwealth ombudsman in April 2017 “demonstrated that most debts calculated this way were greatly inflated, and that some were false (zero debts)”.

Carney was a member of the social services division of the AAT – its longest-serving member until his term concluded in September 2017 – and oversaw the writing of the Social Security Act.

Carney praises the parliamentary community affairs committee for recommending that “Centrelink resume responsibility for obtaining all information necessary for calculating working age payment debts”.

But, he argues, this worthy recommendation still “[fails] to correct the fundamental legal error” in alleging that a debt exists in the first place.

When welfare recipients challenge alleged debts in the AAT, based on his experience as a member of the first tier of the AAT, Carney said “in practice Centrelink fails to refer at all to the legal foundation for debts routinely defended” in hearings.

He accused Centrelink of being “elliptical at best” when asked for written submissions proving a debt and said the agency “appears to have elected not to challenge” adverse robodebt rulings by appealing to the second tier of the AAT.

The Welfare Rights Centre principal solicitor, Katherine Boyle, told Guardian Australia the issues raised in Carney’s article were seen on a daily basis by her organisation.

“We see many examples of the issues raised … in our daily work to assist people, many of whom cannot understand why they have Centrelink debts when they have been doing the right thing,” she said.

In one recent case, a young casual worker, Sarah, successfully challenged a $6,900 debt. Centrelink calculated the unlawful debt using the income-averaging method based on ATO data which overstated her earnings from casual employment over the financial year.

The Department of Human Services general manager, Hank Jongen, said the department “strongly refutes any claims that it has conducted its compliance activities in a manner which is inconsistent with the legislation”.

“The independent review by the commonwealth ombudsman found the online compliance system meets all legislative requirements, accurately calculates debts when the required information is entered, and debts raised are consistent with the previous investigation processes,” he said.

Carney said the “illegality” of the robodebt program has “continued unchecked for 18 months as at the date of writing, despite [first tier] decisions invalidating it” and that the normative effect of AAT decisions does not appear to be working.

Carney argued that Centrelink’s conduct using averages in internal reviews and AAT challenges “arguably breaches” the commonwealth’s model litigant policy, which requires fair play and for litigation not to oppress citizens.

He cited the recent full federal court case Shord v Commissioner of Taxation for the proposition that a breach – if established – may result in professional misconduct proceedings, contempt or criminal sanctions.

Carney suggested that “because there may or may not be a recoverable overpayment (usually in a different and lower amount)” the AAT should set aside debt assessments based on averaging, and send them back to be recalculated based on “precise information of earnings in relevant fortnights”.

He also suggested the AAT should use pre-hearing powers to demand Centrelink give more documents and set out the legal basis of the debt.