FCRC Professional Development Series

Understanding Social Security Prosecutions

David Grove, Senior Lawyer

Commonwealth Entitlements Program

Outline of session

• Understand the basic prosecutions framework for social security overpayments

• Identify from client instructions potential prosecution situations

• Understand what services Victoria Legal Aid provides and when it is appropriate to refer for legal advice

Prosecutions – basic legal framework

• Department of Public Prosecutions (Cth)

• Established to prosecute alleged offences against Commonwealth law

• “Policy” threshold of $10,000 debt

• Investigation (Business Integrity) Unit

• Connection with civil debt – understanding the difference

Offences – Criminal Code Act 1995

• Usually s135.2 – obtaining financial advantage- engage in conduct - consequent financial advantage from Cth- knowledge or belief of non-entitlement

• s135.1 – general dishonesty- does anything with intention of

dishonestly obtaining a gain from the Cth

• S134.1 – obtain property by deception. Similar to s135.1 with deception added

Prosecution Issues

• Clients do not have to have intent to obtain something they weren’t entitled to. They can be prosecuted if they had knowledge or belief that they were not entitled to the full benefit they received.

• It is often very difficult to prove that clients didn’t have some idea that they weren’t fully entitled to what they received.

• Clients are legally obliged to notify Centrelink of a change in circumstances within 14 days.

Social security prosecutions (nationwide)Centrelink statistics

Year Prosecutions Acquitted Convicted

2007/08 2,658 34 2,404

2008/09 3,388 34 2,973

2009/10 3,461 25 3,073

What Centrelink investigates

• Centrelink has immense information gathering powers:- data matching- access to bank, employment, ebay records- tip offs; private investigators

• Centrelink may find that a person has failed to declare a relationship or under declared their income

• This will result in a debt being raised, and may also result in a prosecution

• Your clients need to take care to:- report correctly- advise Centrelink about changed circumstances within 14 days

Penalties

• The outcome depends on:what the client has been charged with

the nature of the debt

the client’s circumstances

• Range of penalty is from a a promise to be of good behaviour to imprisonment

• The higher the debt, the more likely imprisonment will be the outcome

Prosecution Issues

• DPP (Cth) v Poniatowska

• DPP (Cth) v Keating

• Since Keating we know 30% of convictions wrong at law

• Post-Keating

Common issues:Marriage-like relationships

• Single & partnered rates

• Income and assets test

• MLR factors:– the financial aspects of the relationship

– the nature of the household

– the social aspects of the relationship

– any sexual relationship between the people

– The nature of the commitment to each other

Common issues:Overpayments

• a person who obtains the benefit of a payment to which they were not entitled for any reason

• Undeclared or underdeclared employment income• Failure to declare a relationship

• Overpayment waiver

• Sole administrative error

• Special circumstances

Centrelink debts are legally recoverable from a person’s Centrelinkbenefit

Further information

• Victoria Legal Aid- David Grove (03) 9269 0222

david.grove@vla.vic.gov.au

• Other Resources• Welfare Rights Unit Factsheets:

www.welfarerights.org.au

• Social Security Rights Victoria