The Windrush compensation scheme has failed to repair a grave injustice and needs a significant overhaul, a Westminster inquiry into government compensation schemes heard on Monday.

Survivors of the Windrush scandal should be given legal support in making claims for compensation to help slash the number of claimants who are denied payouts and to bring the scheme in line with compensation programmes rolled out for victims of the Post Office Horizon and infected blood scandals, the independent Windrush commissioner, Clive Foster, told MPs.

Claimants found applying for compensation exhausting and painful and most received no payment at the end of a difficult process, Foster told the public accounts committee, highlighting that nearly six in 10 applications resulted in no money being awarded.

“Survivors of the Home Office Windrush scandal have already fought the state once. They deserve a scheme that works for them, not one that asks them to prove their suffering all over again,” Foster told the Guardian before the committee. Although some improvements had been made to the scheme, he said he was still hearing from people who found the application process “too complex and the evidential burden too high”.

“Too many people are still navigating it without the support they need. Advocates do vital work, but they cannot do what lawyers can. Challenging a flawed decision, testing evidence, advising on causation and loss,” he said. “I will be making the case to ministers that funded legal support is essential. Without it, the scheme cannot be truly fair or accessible.”

The government launched the Windrush compensation scheme in 2019 to offer compensation to people affected by the scandal, in which thousands of Windrush-era residents were misclassified as illegal immigrants, many of whom were subsequently sacked from their jobs, evicted from their homes, denied NHS healthcare and in extreme cases wrongly detained and deported.

Since then about £127m has been paid out to 3,764 claimants. The scheme has been repeatedly criticised for processing delays, low offers and unfair rejections. Although processing times have improved, more than 50 people have died after submitting a claim but before receiving any compensation.

“Nearly six in 10 decisions result in nothing. People see that and they think: why would I put myself through this?” Foster said. “This scheme was built to repair a grave injustice. It still can. But not like this.”

The decision to make the Home Office responsible for delivering compensation to people affected by mistakes made by staff in the same department was misguided; officials designing future schemes should not hand the management of compensation to officials responsible for the original problem, Foster said.

The public accounts committee began its review into government compensation schemes for citizens who had suffered harm, hardship and distress as a result of failures by public bodies last year. Alan Bates, who has been campaigning for justice for the post office operators affected by the Horizon IT system, was also due to highlight weaknesses in the scheme to offer redress to those caught up in that scandal. More than 900 post office operators were wrongly prosecuted between 1999 and 2015, after the faulty Horizon IT system wrongly indicated shortfalls in post office branch accounts. The families of some of those affected say the stress led to marital breakdowns, serious health conditions and addiction.

A Home Office spokesperson said: “The home secretary is determined to put right the appalling injustices caused by the Windrush scandal, making sure those affected receive justice and the compensation they rightly deserve. As part of this work, those affected by the Home Office Windrush scandal will now see greater compensation and their claims processed quicker.”