We have an initial Hacker Rank 'filter', that if you don't pass that, we don't even do an interview. A few weeks ago we interviewed someone who passed that filter very well. But in the interview, it was really below par. Not even the basics were understood. So I'm very skeptical about these kinds of homework where they could get help.

What I currently do is go through a very simple coding example that I wrote (very generic). Then we go through the code and I ask questions like "can you explain what this line is doing", or "If I move this line over here, is the behavior still the same", etc. Some bugs are in there and I ask what is going wrong and how to solve them.

Not ideal, but the problem is that nothing really is :(.

And in this case you're eliminating people who aren't willing and/or able to spend time preparing for your interview process. One of my previous jobs had a clause in the contract that all my programming work belonged to my employer; is your company going to sign a waiver that says they take responsibility if a previous employer sues? Doesn't matter whether or not it's enforceable or not.

What if you use that solution in production, do you compensate for their time in helping solve the problem like you would if the task was assigned to you?

Also, you're not really setting a level playing field here. How do you gauge a candidates experience/seniority versus the other 10 candidates you hired if you're not asking them the same questions or looking for the same things. Maybe I've solved that bug in my current job.

All this is to say that this doesn't "just fix" hiring - I don't know if it's any better or worse than giving people on-site tests, but you're at the very least trading one set of problems for another.