Centrelink's automated debt-recovery program is likely to face a Senate inquiry, with Labor vowing to move a motion when Parliament returns next month.
The Greens have already called for the program's architects to face an inquiry and South Australian senator Nick Xenophon, who controls three votes in the Upper House, has been highly critical of the program.
Opposition spokeswoman for human services Linda Burney said the program was "a disaster" and needed further investigation.
"We need an inquiry to get to the bottom of how the Government got this so wrong, how people have been impacted and what can be done to fix this mess," she said.
Prime Minister Malcolm Turnbull defended the program on Wednesday describing it as "entirely responsible and appropriate".
Human Services Minister Alan Tudge has insisted the data-matching program was working and would continue, but made several changes earlier this week.
Department of Human Services general manager Hank Jongen has also defended the program, saying welfare recipients have an obligation to ensure their records are up to date.
Mr Tudge has now told his department to ensure welfare recipients can launch an internal review of their payments before debt proceedings are launched.
Language used by the Government agency will be simplified and contact phone numbers will be issued on notifications, rather than online.
Letters will now be sent through registered mail so Centrelink can track whether they have been received.
In some cases the letter will be followed up with a phone call.