The law surrounding Centrelink fraud prosecutions has been in limbo since the recent South Australian Supreme Court decision of Poniatowska.
The Federal Government has recently passed legislation, the Social Security and Other Legislation Amendments (Miscellaneous Measures) Bill 2011, seeking to ensure that past Centrelink Fraud convictions are safe from appeal following the South Australian Supreme Court decision of Poniatowska v the DPP (Cth)  SASCFC 19. The legislation also seeks to clarify the uncertainty that has surrounded Centrelink fraud prosecutions since the Poniatowska decision.
The South Australian Supreme Court decision of Poniatowska called into question whether a person has committed an offence of Centrelink fraud by knowingly omitting to notify Centrelink of a change in circumstances. The Court in Poniatowska held that under the most commonly charged offence, mere omission without any specified legal obligation to declare a change in circumstances was not sufficient to satisfy the charge. A change in circumstances can include a change in income or living arrangements.
The Federal Government, with the Social Security and Other Legislation Amendments (Miscellaneous Measures) Bill 2011, attempts to insert a specific legal obligation into the Social Security (Administration) Act 1999, requiring those receiving social security payments to advise Centrelink within 14 days of an event or change in circumstances that may affect their payment. By creating this legal obligation, the omission to advise Centrelink of a change in circumstances becomes an omission to perform an act that, by law, there is a duty to perform.
The Federal Government has taken the extraordinary course of making this legislation apply retrospectively. This means that those who were receiving a Centrelink payment from as far back as 20 March 2000 have had the legal obligation to advise Centrelink of their change in circumstances since that date. It is questionable whether, before this legislation came into existence, there was a specific legal obligation to advise of a change in circumstance. By applying the legislation retrospectively to the year 2000, the Federal Government has effectively cut off any avenues of appeal against past convictions for Centrelink fraud.
Retrospective legislation, such as the Social Security and Other Legislation Amendments (Miscellaneous Measures) Bill 2011, especially involving a criminal offence, is a rare action taken by parliament. There is a fundamental principle that a citizen should know, or be in a position to find out, whether his or her conduct is illegal at the time of engaging in that conduct. To be told at a later stage that past conduct, although legal at the time, has since been declared illegal, is thought by many to be contrary to the rule of law.
Notwithstanding this, there is nothing in the Australian Constitution to prohibit the parliament introducing retrospective legislation. The explanatory memorandum to the bill states:
“The Government does not likely pursue retrospective legislation. However, in this case there are exceptional circumstances justifying retrospectivity, namely that it would not be appropriate for a significant number of prosecutions conducted from 2000 for social security fraud to be overturned on a previously unidentified legal technicality”.
The Government argues that convicted persons at the time would have been aware that they should have informed the department of change in circumstances because they were given notices by Centrelink in relation to their payments. However, the Government also concedes that those notices may not have complied with the relevant legislation.
In any event, it remains to be seen how this particular decision and amending legislation will be reflected in the court process, particularly at sentence and in Centrelink fraud penalties.
See also: Centrelink Fraud