Almost 200,000 outstanding "Robodebt" cases will be dumped and debts wiped, as the federal government tries to clear the final remnants of the highly criticised system.

Automated debt recovery — colloquially referred to as "Robodebt" — is now the subject of a royal commission.

The use of computer algorithms to match welfare payments and income data from the Australian Taxation Office, with limited-to-no human oversight, resulted in thousands of Australians being wrongly pursued for debts.

That scheme was suspended in 2019, and the former Coalition agreed to a $1.2 billion price tag to settle a class action brought against the Commonwealth.

Many people who were issued robodebts have described feeling hounded for money while the scheme was operating, with some families saying it contributed their loved ones' suicides.

Social Services Minister Amanda Rishworth announced 197,000 outstanding robodebt cases would be ended, with the royal commission into the scheme already underway.

Before the scheme was suspended, 124,000 people had been told their debts were being reviewed, while another 73,000 were not alerted that theirs was under review.

The reviews were suspended once the scheme was put on hold in 2019.

"The Robodebt fiasco is something that should be of deep concern to all Australians," Ms Rishworth said.

She said the warning signs were there for a long time, and it was not fair to have the debts still looming over people.

"We know, as late back as 2016, there were members of the public flagging concerns that these debts weren't right," Ms Rishworth said.

"Individuals felt increasingly anxious, depressed and worried because these debts kept coming and they couldn't understand them."

Prime Minister Anthony Albanese committed to establishing a royal commission into the scheme during this year's election campaign, and the inquiry held its initial hearing in late September.

Further hearings, focusing on how the Robodebt scheme came into being, are scheduled for the end of the month.