Migrants who fled their country for fear of persecution often make requests to the Department of Home Affairs for personal information required to apply for working visas.
But Refugee Advice and Casework Service (RACS) director Sarah Dale said the department's lack of resources have led to delays and driven clients into a "prolonged state of poverty".
"Failure to give them full and frank legal advice with all the information available to us can pose a very real risk to their safety and liberty," she told the inquiry.
"It just goes to a culture of delay when it comes to these critical issues for people seeking asylum.
"(And) our experience is that it has gotten worse and it's not getting better."
In 2018/19, the department responded to 74 per cent of information requests within the required time frame.
By 2021, this had slipped to 45 per cent despite a slump in migrant numbers during the COVID-19 pandemic.
Ms Dale said the department had been working more openly with RACS and other refugee services but has not been able to address all their frustrations.
"It's not that they are not aware - they are very aware - it's just that we're told it's resourcing," she said.
"(They say) we don't have the time, we don't have the people, we would have to sift through hours and hours of documents in order to get you what you want, that it would deter resources away from other requests."
Asylum seekers whose information requests are denied can ask for an internal review of the decision, but the department has proposed an administration fee for these appeals.
RACS policy and casework solicitor Mursal Rahimi said imposing an extra cost on refugees trying to access their own information was "unimaginable".
"Many of the clients we assist can barely subsist at this stage. They might not have the funds to top up their (transport) cards, they might go days without food."
A more responsive and streamlined freedom of information process would benefit the entire system, she said.
"If we were able to get full documentation before making a visa application, we could put in better visa applications.
"The whole ecosystem would be changed."
Greens senator David Shoebridge said any "half-competent" department should have a system sufficient to manage information requests about personal documents.
"It doesn't seem too little to expect Home Affairs, with its multibillion-dollar budget, to have a fit-for-purpose IT infrastructure that can produce that properly," he said.
