Centrelink Fraud

Published: 12 January 2021
Published: 12 January 2021
Andrew Anderson, Legal DirectorBy: Andrew Anderson

Centrelink fraud (sometimes referred to as ‘Welfare Fraud’ or ‘Social Security Fraud’) is regarded as a serious criminal offence in Australia, which is punishable by actual imprisonment. There are a number of different charges that may apply under the Criminal Code (Cth) for cases of this kind.

Each legal issue is unique. This information cannot – and is not meant to – substitute legal consultation. It is designed to outline information of a general nature to people who want to learn more about Centrelink fraud offences.

If you face a Centrelink fraud offence, contact Anderson Legal. This firm provides expert advice and representation. Andrew Anderson is a former Principal Crown Prosecutor and is recognised as a leading criminal defence lawyer in Queensland. He has substantial experience in assisting individuals with charges of this nature.

Commonwealth Law

The Commonwealth Criminal Code contains a number of offences that may apply in cases of Centrelink fraud. The main offences are:

  • Section 134.1: Obtaining property by deception (Maximum Penalty: Imprisonment for 10 years)
  • Section 134.2: Obtaining a financial advantage by deception (Maximum Penalty: Imprisonment for 10 years)
  • Section 135.1: General dishonesty (Maximum Penalty: Imprisonment for 10 years)
  • Section 135.2: Obtaining financial advantage (Maximum Penalty: Imprisonment for 12 months)

The Commonwealth Director of Public Prosecutions has ultimate responsibility for charging decisions for cases of this kind. There is a real degree of overlap between some of the charges, which makes it important for criminal lawyers to understand the different options available under the law, as well as how to obtain the best outcome for their client based on the evidence.

Proof of “Dishonesty”

Dishonesty is an element of a number of offences associated with welfare fraud offences. For the purpose of Centrelink fraud offences, section 130.3 of the Criminal Code (Cth) defines the word ‘dishonest’ as follows:

(a) dishonest according to the standards of ordinary people; and

(b) known by the defendant to be dishonest according to the standards of ordinary people.

Although section 130.3 defines the word ‘dishonest’, the word ‘dishonesty’ is used in sections 134.1, 134.2, and 135.1. The language used is consistent with dishonesty being a fault element for each charge, which attaches to the particular act or omission that gives rise to the offence. For that reason, it is important for anybody facing a Centrelink fraud offence involving an allegation of dishonesty to understand how the acts or omissions are said to disclose dishonesty. In some cases, evidence such as lies to deceive and gain a benefit may make the case plain, in other cases, such as those based only on circumstantial evidence, may point to a number of possible explanations for the conduct other than dishonesty.

For every criminal charge in Australia, there are ‘elements’ that the prosecution must prove beyond reasonable doubt. Failure to prove just one element means the person charged must be found not guilty. Sometimes there will be an alternative offence that a person may then be found guilty of instead if proof of the primary charge fails.

For Centrelink fraud offences, the elements will depend on the specific offence charged. For instance, the elements of the offence under section 135.2 of the Criminal Code (Cth) are as follows::

  1. The person charged engaged in conduct
  2. As a result of that conduct the person charged obtained a financial advantage
  3. The person charged was not eligible to receive the financial advantage
  4. The financial advantage came at the expense of a Commonwealth entity (such as Centrelink)

For charges under section 135.2 of the Criminal Code (Cth), it is common for the Commonwealth Director of Public Prosecutions to particularise the ‘conduct’ as the failure to comply (an omission) with section 66A of the Social Security (Administration) Act (Cth), which creates a legal duty to advise of an event or change in circumstances affecting a person’s entitlement to payments from Centrelink.

Whether one or more of these elements is a real issue in a trial will depend on the circumstances of the case. For instance, a prosecution case based only on circumstantial evidence may involve no question of a financial advantage, but it may be disputed that the person charged had any duty to update their details. In other cases, there may be no dispute that the person charged engaged in particular conduct, but there may be an issue as to whether their conduct affected their eligibility to receive the financial advantage.

Australian law makes it possible for more than one person to be found guilty of the same offence. For instance, a person may be found guilty if they are shown to have taken part in a criminal conspiracy or formed part of a joint illegal enterprise, particularly with respect to dishonest schemes against Commonwealth entities.

In reviewing an individual case, the work of a criminal lawyer often begins with a careful analysis of the evidence to determine the strengths and weaknesses of the prosecution case and, in particular, its ability to prove each element of the offence.

Possible Defences

The ‘presumption of innocence’

When people think about a ‘defence’ to a charge, such as Centrelink fraud offences, they generally thinking about what makes them ‘not guilty’ of the offence. Because of the presumption of innocence, whenever a person faces a charge involving social security fraud in Australia, it is for the prosecution to prove they are guilty – and to do so beyond a reasonable doubt. What that means in practical terms is that it is for the prosecution to disprove any defences that may be raised on the evidence.

For welfare fraud offences, the prosecution must not only prove the elements of the offence beyond reasonable doubt, it must also disprove all defences that may apply beyond reasonable doubt.

How are defences raised on the evidence?

A defence may be raised on the evidence of both the prosecution and the defence. That is, people who give witness statements to police may indicate that an event occurred accidentally, or a person appeared to act under a mistaken belief as to a relevant fact. The prosecution has an obligation to call all material witnesses at a trial – even those unfavourable to its case. Alternatively, a person charged with an offence may also call their own witnesses at a trial, which may provide the basis for a defence to be raised.

One of the important roles of a criminal lawyer is to identify, as early as possible, the relevant defences that may apply in a given case. The reason it is important to do it as early as possible is to ensure relevant witnesses are found while matters are freshest in their mind, or to prevent other evidence being lost or destroyed.

Some defences available under the Criminal Code (Cth) do not apply to certain aspects of welfare fraud offences. For example, for a charge of obtaining property by deception under section 134.1 of the Criminal Code (Cth), absolute liability applies to the element that the property obtained belongs to a Commonwealth entity. The effect of that element being absolute liability is the defence of mistake of fact under section 9.2 of the Criminal Code (Cth) is unavailable on that issue.

The requirement that ‘dishonesty’ be proved for a number of offences brings focus to the second limb of the definition found in section 130.3 that the conduct was “known by the defendant to be dishonest according to the standards of ordinary people.” In some cases, where a defence of mistake of fact arises, there may be some underlying belief that is relevant to a defence to a charge. Analysing the subjective mindset of a person accused of a Centrelink fraud offence in relation to the circumstances is critical in cases of this kind.

Amongst the most important advice a lawyer can provide is whether or not a defence applies to an individual case. In some cases, multiple defences may apply. In others, no defence may be considered viable. Certain defences cannot operate together. For this reason, anybody facing a welfare fraud charge should seek early, authoritative advice from an experienced criminal lawyer to understand their legal position.

Penalties & Sentences

Maximum Penalty

The maximum penalty for Centrelink fraud offences varies depending on the particular offence alleged to have been committed. The maximum penalties for the general offences are as follows:

  • Section 134.1: Obtaining property by deception (Maximum Penalty: Imprisonment for 10 years)
  • Section 134.2: Obtaining a financial advantage by deception (Maximum Penalty: Imprisonment for 10 years)
  • Section 135.1: General dishonesty (Maximum Penalty: Imprisonment for 10 years)
  • Section 135.2: Obtaining financial advantage (Maximum Penalty: Imprisonment for 12 months)

Minimum Penalty

While some offences in Australia law can carry mandatory minimum sentences, Centrelink fraud offences do not have any mandatory minimum penalty in Australia.

Sentencing in Australia

For a welfare fraud offences in Australia, the Crimes Act 1914 (Cth) sets out a laundry list of mandatory sentencing considerations for courts. Section 16A of the Crimes Act 1914 (Cth) states that the court must have regard to the following considerations when sentencing for Centrelink fraud offences:

Matters to which court to have regard when passing sentence etc.–federal offences

(1) In determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence.

Note: Minimum penalties apply for certain offences–see sections 16AAA, 16AAB and 16AAC.

(2) In addition to any other matters, the court must take into account such of the following matters as are relevant and known to the court:

(a) the nature and circumstances of the offence;

(b) other offences (if any) that are required or permitted to be taken into account;

(c) if the offence forms part of a course of conduct consisting of a series of criminal acts of the same or a similar character–that course of conduct;

(d) the personal circumstances of any victim of the offence;

(e) any injury, loss or damage resulting from the offence;

(ea) if an individual who is a victim of the offence has suffered harm as a result of the offence–any victim impact statement for the victim;

(f) the degree to which the person has shown contrition for the offence:

(i) by taking action to make reparation for any injury, loss or damage resulting from the offence; or

(ii) in any other manner;

(fa) the extent to which the person has failed to comply with:

(i) any order under subsection 23CD(1) of the Federal Court of Australia Act 1976 ; or

(ii) any obligation under a law of the Commonwealth; or

(iii) any obligation under a law of the State or Territory applying under subsection 68(1) of the Judiciary Act 1903 ;

about pre-trial disclosure, or ongoing disclosure, in proceedings relating to the offence;

(g) if the person has pleaded guilty to the charge in respect of the offence:

(i) that fact; and

(ii) the timing of the plea; and

(iii) the degree to which that fact and the timing of the plea resulted in any benefit to the community, or any victim of, or witness to, the offence;

(h) the degree to which the person has cooperated with law enforcement agencies in the investigation of the offence or of other offences;

(j) the deterrent effect that any sentence or order under consideration may have on the person;

(ja) the deterrent effect that any sentence or order under consideration may have on other persons;

(k) the need to ensure that the person is adequately punished for the offence;

(m) the character, antecedents, age, means and physical or mental condition of the person;

(ma) if the person’s standing in the community was used by the person to aid in the commission of the offence–that fact as a reason for aggravating the seriousness of the criminal behaviour to which the offence relates;

(n) the prospect of rehabilitation of the person;

(p) the probable effect that any sentence or order under consideration would have on any of the person’s family or dependants.

Due to the number of issues that can aggravate or mitigate the punishment imposed by a court, experience shows that the earlier a person facing a charge obtains sound advice from an experienced lawyer, the better their chance of securing the best outcome possible for their situation.

Possible Outcomes

The possible penalty outcomes for Centrelink fraud offences are wide, although for serious examples of Centrelink fraud lengthy terms of imprisonment may be imposed. It is also possible, in some cases, for people guilty of Centrelink fraud offences to be discharged without a conviction under section 19B of the Crimes Act 1914 (Cth). In cases where it is shown that a benefit has been obtained, or a loss incurred, courts may order restitution to compensate the relevant Commonwealth entity for its loss as a result of the offence. Such orders of restitution or compensation may be made in addition to other punishments.

The significant issues that affect the sentencing outcome relates to the quantity of the benefit gained or loss suffered, as well as the motivations driving the acts and length of time over which the offence occurred. In that regard, courts generally tend to distinguish between well-planned schemes and those that are indicative of ill-thought, momentary lapses of judgement.

Significant Cases

Centrelink fraud offences have seen a number of significant legal decisions over time, including in the High Court of Australia. Significant decisions, among others, shape the advice of lawyers who are called to represent individuals charged with Centrelink fraud offences.

High Court of Australia

In DPP (Cth) v Keating [2013] HCA 20, the High Court of Australia unanimously rejected the validity of retrospectively applying a change to the law to aid proof of a criminal offence. In rejecting the arguments made on behalf of the Commonwealth Director of Public Prosecutions, the High Court found that ordinary rules of interpretation prevented the retrospective application of section 66A of the Social Security (Administration) Act (Cth). Quoting from the text Bennion on Statutory Interpretation, 5th ed (2008) at page 807, the Court noted:

“A person cannot rely on ignorance of the law and is required to obey the law. It follows that he or she should be able to trust the law and that it should be predictable. A law that is altered retrospectively cannot be predicted. If the alteration is substantive it is therefore likely to be unjust. It is presumed that Parliament does not intend to act unjustly.”

The following drug offences are possible charges that may be substituted for, or charged in addition to, a charge of Centrelink fraud:

Centrelink Fraud - Criminal Law Expertise