The report, made public on Friday, recommended unnamed people be referred for prosecution or civil action over the automated "robodebt" programme, designed to ensure welfare recipients were not under-reporting income and over-receiving government payments.
Computer algorithms for the scheme, in place from July 2015 to November 2019, wrongly calculated that hundreds of thousands of Australians owed money and, with little to no human oversight, the programme recovered $A1.76 billion ($NZ1.89 billion).
"The robodebt scheme was a gross betrayal and a human tragedy ... it was wrong, it was illegal," Prime Minister Anthony Albanese told a news conference after the release of the nearly 1000-page report from a Royal Commission, the most powerful type of government inquiry.
The report said Morrison, who in 2015 monitored the rollout of the programme as Social Services Minister, took the proposal to the Cabinet without necessary information.
"He failed to meet his ministerial responsibility to ensure that Cabinet was properly informed about what the proposal actually entailed and to ensure that it was lawful," the report said.
The commission also rejected some evidence by Morrison as "untrue".
Morrison, Prime Minister from August 2018 to May 2022 and still an MP, rejected each finding adverse to him and critical of his involvement in "authorising the scheme".
"They are wrong, unsubstantiated and contradicted by clear documentary evidence presented to the Commission," he said in a statement.
In 2020, he apologised in Parliament for distress caused by the robodebt scheme but did not admit legal liability.
A federal court in 2021 approved a $A1.8 billion settlement after Morrison's government agreed to settle a class action brought by the victims.
The report did not name the individuals it recommended for prosecution, but the commission said relevant parts of the report had been submitted to several federal agencies, including the Australian Federal Police.
