A Senate inquiry into the so-called robo-debt saga handed down its final report on Wednesday evening, after conducting hearings across the country.
The committee urged the government to put the program on hold until "a fundamental lack of procedural fairness" was addressed.
It handed down 21 recommendations aimed at fixing the "broken" program.
But Human Services Minister Alan Tudge, who is responsible for Centrelink, has 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 into the debt program, saying the government accepted all recommendations and many were already implemented.
The ombudsman found asking welfare recipients to explain discrepancies identified through data matching was reasonable and appropriate and debts raised through the program were accurate, he said.
The committee focused its recommendations on calculating debts and reducing obstacles to challenging them, saying Centrelink should reconsider slapping people with additional fees and rethink the use of coercive tactics to retrieve debts.
"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."
Coalition senators rejected the central argument the rollout lacked procedural fairness, saying while a lack of clarity could have been confusing, there were always avenues available to request reviews.
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.