Criminal Law

Obtaining a Financial Advantage from Centrelink

The offence of Obtaining a Financial Advantage from Centrelink is the less serious and more common Centrelink offence. This is when a person engages in conduct and, as a result of that conduct, the person obtains a financial advantage that the person knows or believes he or she is not entitled to receive.

The Law

Pursuant to section 135.2 of the Criminal Code a person is guilty of the offence of obtaining a financial advantage from a Commonwealth entity (for example, Centrelink) if:

  1. the person engages in conduct; and
  2. as a result of that conduct, the person obtains a financial advantage for himself or herself from another person; and
  3. the person knows or believes that he or she is not eligible to receive that financial advantage; and
  4. the other person is a Commonwealth entity.

Centrelink Fraud Penalties

The maximum penalty for this Centrelink offence is a term of imprisonment for 12 months. Court costs are usually ordered and reparation orders are always made for the offender to pay back the money owed.

Commentary

Examples of the types of conduct that often amount to this type of Centrelink offence being committed include:

  1.     Not declaring all income received over a certain period
  2.     Incorrectly stating income
  3.     Not correcting an incorrect estimate
  4.     Not declaring a relevant change of circumstances

Unfortunately, many people are unaware that they are committing an offence when not properly complying with the strict conditions imposed on them by Centrelink.

Although a High Court case in 2011 (Commonwealth DPP v Poniatowska [2011] HCA 43) held that under certain circumstances, a recipient of Centrelink payments could not be held criminally liable for not disclosing a change in income/circumstances, the government was quick to amend legislation (even before the case had finished!) to ensure that there is no doubt about a recipient’s legal obligation to provide Centrelink with updates on a change of circumstances that might be relevant to determining payments to be received. In other words, a person is not only punished for falsely stating income, for example, but a person is criminally liable if the person does not go out of his or her way to keep Centrelink updated of any relevant changes. 

A classic (hypothetical) example of someone being charged after being unaware that they have continually committed an offence or offences is as follows:

A university student is working casually whilst studying and obtaining a payment from Centrelink to supplement their income. The student is required to declare an ‘estimate’ of income over a fortnight period. The cycle for declaring the income ends before the pay period ends and therefore, the student provides their best estimate, based on previous weeks of payment. The student then receives a higher income for the period, due to penalty loading, or working longer shifts. The student does not then go out of his or her way to notify Centrelink that they received a higher income.

In examples such as the one above, the student may even be subjected to one or two audits from Centrelink and told that everything is fine. The student will even declare their income annually when lodging Tax Returns. More often than not, it will not be until about two to three years down the track that the student receives notice that they are in breach of their duties and possibly liable to prosecution.

Unfortunately, some accountants and financial advisors, who do not understand the criminality associated with not declaring EVERYTHING to Centrelink, advise people of things such as, “Just do you best and anything you are overpaid you will simply have to repay” or “Don’t worry about it, it will all just come out in the wash”.

WRONG! The person is unfortunately almost always committing a criminal offence if they are aware that they are not complying with their responsibilities to Centrelink and obtaining money as a result.

The bottom line is: the onus/responsibility lies with the applicant or recipient of Centrelink payments to keep Centrelink informed. (For information and assistance on reporting income, visit the Department of Human Services website.)

Many are unfortunately caught out by a system that can be difficult to comply with, when taking into account the demands placed on the recipient, the fact that in many instances, the income is received on a casual basis and constantly varies, whilst juggling studies or other commitments and further, when under the misapprehension that Centrelink will “sort it all out” or simply “make the required adjustments”, not realising that they may be committing a serious offence.

This does not mean that everyone who has been overpaid has committed an offence. There may be defences available or Centrelink may have simply made an error.

Before referring a matter to the Commonwealth DPP to consider prosecution, Centrelink will contact the recipient and make them aware that Centrelink believe that they have been overpaid. They will then offer the person an opportunity to be interviewed or provide a statement.

YOU ARE NOT UNDER ANY OBLIGATION TO ATTEND AN INTERVIEW!

If you have been approached by Centrelink for an interview or have been notified that you have been overpaid, we advise that you should seek legal advice immediately. If you are in this situation contact our office to seek legal assistance.

Remember, even if the debt is paid in full, depending on the size of the debt, if Centrelink believes that you have committed an offence, they will refer the matter to the prosecutors and you will almost certainly be charged with an offence.

If you have been charged with the offence of Obtaining a Financial Advantage from Centrelink, or have been invited by Centrelink for an interview, our experts at Prime Lawyers - Criminal Law Division can help. Contact us to speak to one of our criminal lawyers at your nearest Prime Lawyers office.

We have offices in Sydney, Parramatta, Chatswood, Sutherland and Wollongong.    

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