Former deputy secretary Nathan Williamson will give evidence a week after former payment integrity worker Allyson Essex claimed he told her it was "really clear" the scheme was lawful despite external legal advice suggesting the opposite was true.
"I told (Mr Williamson) about the … advice and said we have got advice that says it's not legal," Ms Essex told the commission last week.
"His response to me was 'it's legal, it's really clear that it's legal. By all means, if we have a robust advice, let's evaluate the situation. But it's legal'."
The Centrelink debt recovery scheme operated between 2015 and 2019 but continued well after significant concerns were raised about its legality.
It recovered more than $750 million from more than 380,000 people and several people took their own lives while being pursued for false debts.
The unlawful scheme involved using annual tax office data to calculate fortnightly earnings and automatically issue welfare debt notices.
The Department of Social Services has been accused of having a culture in which employees were afraid to escalate legal concerns about the scheme.
Ms Essex told the commission she only planned to tell Mr Williamson about the legal advice "when the time is right", which prompted counsel assisting Angus Scott to ask "surely the right time was immediately".
A partner at a leading auditing firm will also face the royal commission on Friday.
Shane West from PricewaterhouseCoopers (PwC) will give evidence about an external review former minister Alan Tudge commissioned the firm to perform in 2017.
At that stage, legal problems regarding the welfare payment management system were emerging, with the Commonwealth ombudsman running a separate investigation.
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