Centrelink Fraud

 
  • Section 135.2(1) Criminal Code 1995 (Cth)
  • Maximum penalty: Imprisonment for 12 months and/or a fine of $6,600

The Offence

Centrelink Fraud involves intentionally obtaining money not entitled to from Centrelink. It is an offence that is treated seriously by the courts, partly because there is a view that it is widespread and difficult to detect, but also because it involves intentional deception often over a long period of time.

One of the most common ways people are alleged to have defrauded Centrelink is by not correctly declaring income from employment. For example, they either fail to advise Centrelink that they are employed, or they declare some income but the amount declared is under the actual amount earned.

Centrelink Fraud offences are what are known as “full knowledge offences”. In other words, if you have obtained more money than you are entitled to from Centrelink, it is criminal only if you knew you were obtaining more money than you were entitled. Being negligent is not enough to commit an offence of Centrelink Fraud. You must know what you are doing, and you must know you are being paid more than you should.

Other ways in which Centrelink Fraud offences can be committed include:

  • Failing to declare a partner’s income
  • Failing to advise Centrelink that you are living as a member of a couple
  • Claiming benefits under multiple names or identities
  • Continuing to claim benefits for children no longer under your care
  • Continuing to claim benefits for caring for someone no longer in need of care or under your care
  • Incorrectly stating your living circumstances including your rental circumstances
  • Incorrectly claiming emergency payments in times of disaster when no entitlement exists

Will I be prosecuted if I pay the money back?

If Centrelink suspect that a criminal offence has been committed, and they consider it serious enough, the matter will be referred to the Commonwealth Director of Public Prosecutions (CDPP). The CDPP will then make a decision whether to prosecute the offence. That decision is made in accordance with the Prosecution Policy of the Commonwealth. Click here for a link to the CDPP Prosecution Policy. CDPP POLICY.

Assuming that the CDPP is satisfied that there is sufficient evidence to justify a prosecution, they will then consider whether prosecuting each particular matter is in the public interest. One of the factors it will consider is the extent the person has co-operated with the investigation, however generally, the mere fact that all money owed has been paid back to Centrelink will not in itself mean that prosecution action will not be taken. Paying the money back, however, is a significant matter that will be taken into account at sentence.

Will the offence be dealt with in the Local Court or District Court

Although most offences of Centrelink Fraud are dealt with in the Local Court under s.135.2(1) Criminal Code 1995, for more serious offences, the prosecution can decide to deal with the matter in the District Court.

If matters are prosecuted in the District Court, the maximum penalties can be up to 10 years imprisonment.

Factors taken into account by the prosecution when deciding whether to prosecute in the District Court include the amount of money defrauded, the length of the fraud, any aggravating features including multiple identities or attempts to conceal the offending, and whether dealing with the matter in the District Court would have a greater deterrent effect on others.

Centrelink Fraud Penalties

It is often said by the courts that in cases of fraud on the social security system, a sentence of full time jail or imprisonment should be expected unless there exists some very special circumstances justifying order. See for example R v Aller [2004] NSWCCA 378.

This does not mean, however, that each offender will be sentenced to prison. The NSW Court of Criminal Appeal in McGuiness v R [2008] NSWCCA 80 recently re-stated the general rule and seemed to limit the rule to matters dealt with in the District Court or higher. Bell, Simpson and Rothman JJ said [at 44]:

“The circumstances in which persons, including those of prior good character, dealt with on indictment for social security fraud over a sustained period will avoid the imposition of a sentence of fulltime custody are rare”.

Issues of general deterrence, or deterring others in the community from committing similar offences, play a very important role in the sentencing process. Generally only the most serious offences will attract a penalty of full-time prison.

The likely sentence imposed will depend on a number of factors including:

  • The amount of money obtained
  • The length of the fraud
  • Any attempts at concealing the offending or any level of sophistication
  • If there were any false statements made or any positive attempts to deceive
  • The method of detection
  • Any money paid back to Centrelink
  • Whether the money was obtained as a result of “need” as opposed to “greed”

The Court will also consider the circumstances of the offending and the personal circumstances of each offender at the time of the offence.

As with any offence, whether or not you have any criminal record will be an important factor to be taken into account at sentence. However, as Centrelink Fraud offences are generally committed by those with prior good character, prior good character is given less weight.

Defences

The prosecution must establish each element of the offence beyond reasonable doubt. The elements of the most common offence under s.135.2(1) Criminal Code 1995 are:

  1. The person intentionally engaged in conduct
  2. As a result of the conduct, the person obtained money from Centrelink
  3. The money was obtained knowingly or believing that the person was not entitled to receive that money from Centrelink.

It is usually the last element that is contested and forms the basis for most defences in court. Specifically, that the person did not know or believe that that were receiving more money than they were entitled.

For example, if a person is incorrectly declaring their income, but it is an honest mistake, they have not committed an offence. Similarly, if a person incorrectly assumes that Centrelink is taking into account their income, but in fact Centrelink is not aware of that income, the person has not committed an offence even though they may be getting more money than they are entitled.

The prosecution will often rely on various documents, for example letters sent advising them of their obligations, to prove that when the defendant obtained the money, they knew it was a result of their misrepresentation and importantly, they knew they were not entitled to the money.

Likely Penalty

The likely penalty will depend on the actual offence charged and whether that charge is dealt with in the Local Court or District Court. Upon conviction, a person is liable to imprisonment for between 12 months and 10 years However, the maximum penalty is for the most serious offender and usually reserved for someone who also has a past criminal history. Click here for more information on sentencing options: SENTENCING OPTIONS.

As with any federal offence, even after a finding of guilt a court can still decide not to record a conviction under section 19B of the Crimes Act 1914 (Cth).

Both our partners previously worked at the Commonwealth DPP and have prosecuted and defended hundreds of people charged with Centrelink Fraud. To discuss your matter further, please contact one of our lawyers.

For recent developments concerning Centrelink Fraud, see our article on recent changes to Centrelink Fraud legislation.

By Jamie McLachlan

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