Centrelink/Social Security Fraud: What You Need to Know
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Understanding Social Security/Centrelink Fraud:
Social security fraud, also known as Centrelink fraud, is a serious indictable offense under Commonwealth legislation (Criminal Code Act 1995 (Cth)). It involves intentionally deceiving Centrelink to obtain a financial advantage (such as payments) that one is not entitled to. Importantly, a person can be charged even if they did not receive the fraudulent payment directly but were involved in the process with someone else who was ineligible.
Sentencing for these offenses is governed by Commonwealth law, applicable across all Australian states and territories.
Common Offenses Related to Social Security/Centrelink Fraud:
- Obtaining a financial advantage by deception (s 135.2 CC)
- Defrauding the Commonwealth
- False accounting
- Falsifying documents
- Theft
- Money laundering
Fraud offenses can range from minor thefts, like taking a snack from a store to large-scale frauds involving millions of dollars.
Statistics on Social Security/Centrelink Fraud:
In Victoria, the number of social security fraud allegations is steadily increasing. For example, in 2010, about 5,000 allegations were reported to the Victorian Commonwealth Director of Public Prosecutions (DPP). By 2012, 57% of those found guilty were sentenced to immediate imprisonment, reflecting the serious nature of these offenses.
Defendants can expect fines averaging around $5,000, depending on the amount fraudulently obtained and the duration of the fraudulent activity. Centrelink is highly effective in detecting and investigating fraud, recovering billions of dollars through various anti-fraud strategies.
Examples of Social Security/Centrelink Fraud
Common examples include:
- Submitting false documents, such as fake medical certificates or forged pay slips.
- Claiming payments from Centrelink without meeting eligibility criteria.
- Underreporting income to receive higher benefits.
- Continuing to collect payments after a dependent has passed away.
Centrelink and Police Interviews:
If Centrelink suspects fraud, they will conduct an investigation to identify the overpayments and the relevant time frame. You may be asked to attend an interview regarding the alleged conduct. While you have the right to decline, anything you admit during this interview can influence whether you face charges.
Following a Centrelink investigation, you may also be called in for a police interview, which will be recorded. At this point, it’s critical to seek legal advice to understand your rights, what to expect, and how to navigate the interview process effectively. We can provide specialised legal guidance to help you prepare for these interviews and protect your interests.
The final decision on whether to pursue charges lies with the Commonwealth Director of Public Prosecutions (CDPP), who will evaluate all evidence gathered. If Centrelink does not believe you acted fraudulently, they may instead seek to recover overpayments without charging you criminally. You can contest any overpayment determination through an internal review or an appeal to the Social Security Administrative Tribunal.
Questions to Consider Before Pleading Guilty or Not Guilty
To determine whether you have a good prospect of success in defending your social security/Centrelink fraud offence in Court, it is important to weigh the following critical points:
- Has the prosecution correctly provided particulars of the charge/s I have been charged with?
- Does the prosecution have a strong case against me?
- Should I plead guilty or not guilty, or defend my charge at trial?
- Did I know I was doing something wrong, or did I lie to Centrelink?
- Was Centrelink responsible for giving me money, or did they make an error?
- Can Centrelink prove that I did something that caused them to give me more money?
- Was a co-accused charged?
- When did the offence occur, and when was I charged by police?
- What options are available to minimise my penalty?
- Do I have a lawful reason to justify why I committed the fraud?
- Should we subpoena (legally seek access to inspect) relevant material from the opposing party?
Our experienced lawyers will help answer all these questions and prepare a strong case for you.
What the prosecution must prove:
To determine whether you have been charged with social security/Centrelink fraud, it is important to consider what constitutes the offence. In other words, can the disputing party (Centrelink bringing the charge) establish beyond reasonable doubt all elements of the offence?
Obtaining a Financial Advantage by Deception (s 134(2) CC)
- You intentionally engaged in a dishonest and deceptive act.
- The Judge can direct the jury on whether the act engaged in by the defendant was dishonest, requiring a weighing of all surrounding circumstances of the act (R v Salvo [1980] VR 401).
- You obtained a financial advantage (payment) you or another person were not entitled to receive.
- If this act occurred over a long period of time, Centrelink may also need to show all deceptive events by the defendant to establish this element.
- The benefit received was from a Commonwealth entity.
- Centrelink, the ATO, and other entitled entities satisfy this element.
Obtaining a Financial Advantage (s 135.2 CC)
- You engaged in a dishonest act.
- Again, the Judge can direct the jury on whether the act engaged in by the defendant was dishonest, weighing surrounding circumstances (R v Salvo [1980] VR 401).
- You obtained a financial benefit knowing or believing you were not entitled to receive it.
- The act need not be carried out in a deceptive manner (unlike s 134(2) CC).
- The benefit received was from a Commonwealth entity.
- Centrelink, the ATO, and other entitled entities satisfy this element.
If Centrelink cannot establish beyond reasonable doubt all elements of the offence, you are not guilty of the offence.
Defences considerations:
If you are pleading not guilty to your social security/Centrelink fraud charge, possible defences you have available to lawfully explain your behaviour will depend on the circumstances surrounding the alleged offending. Every case is unique and requires an individualised plan and approach. Possible defences include:
- The opposing party not being able to establish to the criminal standard of beyond reasonable doubt all elements of the offence.
- You did not intend to defraud Centrelink.
- You never did anything to cause Centrelink to give you money (it was received as a result of an error on their part).
- You did not know you were not eligible to receive money from Centrelink.
- Honest and reasonable belief.
- You misunderstood your obligations and did not know/believe you should have been declaring certain information (like living arrangements) to Centrelink.
- Mistaken identity – there is a factual dispute about the real facts of the case (what happened).
- A different person was responsible for the fraud.
- A different amount of property was involved in the fraud.
- Mistake of fact.
- Centrelink experienced a problem and miscalculated the amount.
- This is not uncommon, as Centrelink files are very large, and calculations are often difficult to follow.
Where Will my Matter be Heard?
Social security/Centrelink charges are indictable (serious) offences; however, they are generally dealt with in the lower Court (Magistrates Court of Victoria). Higher Courts (the County and Supreme Courts of Victoria) also have jurisdiction to deal with these matters where the value of property exceeds $100,000.
Penalties for Centrelink fraud:
If you are found guilty of a social security/Centrelink fraud offence, one of the following penalties will likely be imposed:
- Term of imprisonment and/or
- S 134(2) CA – maximum 10 years.
- S 135.2 CA – maximum 12 months.
- The most serious matters often result in a term of imprisonment.
- More cases show it is becoming difficult to avoid a term of imprisonment (unless you plead guilty and/or are a first-time offender).
- A diversion (conviction or non-conviction) and/or
- Most likely if first-time offender or offender with a mental illness.
- No disclosable outcome is made against you, meaning that while you take responsibility for the offence, it occurs in circumstances where your criminal record remains clean.
- A promise (to the Court to be of good behaviour) and/or
- A financial fine to be repaid to Centrelink (minimum $10,000, maximum $100,000) (conviction or non-conviction).
- In many cases, a term of imprisonment is imposed alongside a very large financial fine.
- A community corrections order (CCO) (conviction or non-conviction) and/or**
- Youth Justice Centre Order (see here for more information).
Quite often, the relevant Magistrate or Judge will establish the offence but dismiss it or impose an immediate term of imprisonment.
What is a Diversion?
A diversion is a type of penalty a Court may impose in response to a stalking offence by a defendant. It is a program run by the Magistrates Court that the defendant participates in, aimed at diverting the defendant away from the criminal justice system (CJS) and protecting them from having a criminal record (as the charge is discharged). The process involves the police or prosecution filing a notice of diversion with the Court, and the Magistrate or Judge reviewing the notice and deciding whether it is appropriate in the circumstances for the defendant to participate in the program.
If the Magistrate or Judge decides it is not appropriate in the circumstances for the defendant to participate in the program, we can make submissions to the Court to defend why it is appropriate in the circumstances and should be allowed. If the Magistrate or Judge upholds their original decision, the defendant need not plead guilty, as the decision is not a plea of guilt (s 59(3) Criminal Procedure Act 2009 (Vic)). The notice will then be withdrawn, and the matter will proceed to open Court (like all other matters).
Successfully completing the program means the charge/s are discharged, whereas unsuccessfully completing the program means the charge/s are referred to open Court. When a Magistrate does not record a conviction, the offence is included on the defendant’s criminal record, which may not be removed until a given time.
Considerations When Sentencing:
Magistrates and Judges consider a range of factors when determining the most appropriate penalty for the defendant, including:
- Nature/gravity of the offending conduct – the defendant’s precise role in the fraud.
- Whether a guilty plea has been entered at the earliest possible opportunity (if so, Courts often give a more lenient penalty).
- Whether there was a breach of trust while committing the fraud.
- Facts surrounding the offence (like personal matters and criminal history of the defendant).
- Whether the offence has a mandatory (or standard) sentence.
- Level of planning involved, and method used to obtain the property.
- Whether part/all money has been repaid to Centrelink.
- Length of time the fraud occurred over.
- Type/amount of property obtained.
- Whether drugs/alcohol were involved, and the type/quantity used.
- Location of the fraud.
- Type of victim impacted and the impact on them (in both the short and long term).
A record for fraud/dishonesty offences can have severe and life-long consequences. For instance, a defendant may not be able to obtain the job they have always wished for and/or experience repercussions in their current employment.
Persons with a criminal history and/or those who commit the most carefully planned, motivated, and sophisticated dishonesty cases will attract the harshest penalties.
Our lawyers have expertise in arguing to the Court the unique circumstances of your offending to ensure they understand who is being sentenced, not just what you have unlawfully done (i.e., conveying that you are a good person but happened to exercise bad judgment).
Recent Social Security/Centrelink Fraud Cases:
The following cases illustrate the approach and outcome Courts may take in response to social security/Centrelink fraud:
- Charge: Obtaining a financial advantage.
- Facts: The defendant did not declare their employment entitlements to Centrelink and was overpaid over $20,000 in benefits that they were not entitled to receive. This occurred over a long period (4 years), and the defendant had only repaid a small amount to Centrelink. The defendant engaged our lawyers to help prepare a strong plea strategy focusing on extenuating circumstances, including the defendant’s separation from their long-term relationship, responsibility to raise young children as a single parent, lack of family support, and chronic depression.
- Decision: The Magistrate agreed that extenuating circumstances existed and imposed a good behaviour bond (conviction not recorded).
- Charge: Dishonestly obtaining a financial advantage.
- Facts: The defendant claimed they were a full-time student while they were employed. Centrelink discovered the offence when the defendant’s employer informed them of their employment status. The defendant engaged in criminal behaviour for several months and was found guilty. They were also found to have numerous previous offences for dishonesty.
- Decision: The Magistrate imposed a term of imprisonment of 12 months with a non-parole period of 6 months.
This advice is a general overview and does not take into account your unique circumstances. To discuss your situation further, please contact us to speak to one of our experienced criminal lawyers.
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Why You Need Legal Representation:
If you’ve been charged with social security or Centrelink fraud, it’s crucial to seek legal representation from a law firm experienced in criminal law, particularly in social security fraud and Commonwealth sentencing processes.
Navigating the criminal justice system (CJS)—which includes police, courts, magistrates, and judges—can be overwhelming, especially for those facing charges for the first time. The system is designed to prioritise the rights of the prosecutor and the public, often leaving defendants feeling vulnerable. Social security and Centrelink fraud cases are among the most commonly prosecuted offenses, and courts view these violations seriously, often resulting in harsh penalties.
The laws governing social security and Centrelink can be complex, making it challenging for defendants to understand how they may have violated the law. It’s essential to preserve evidence, such as witness statements, before it becomes unavailable. Legal advice is critical as it helps you prepare adequately for court, aiming for the best possible outcome.
At MK Law, we have a team of expert criminal defence lawyers specialising in Centrelink fraud across our offices in Melbourne, New South Wales, South Australia, and Western Australia. We have represented thousands of clients facing similar charges, taking each allegation seriously. During our private consultations, we listen carefully to your account, assess all relevant factors, explain potential penalties, and advise on the best course of action—whether to plead not guilty, negotiate a lesser charge, or acknowledge guilt to expedite the process.
We appear in court daily and understand the legal landscape, allowing us to provide consistent representation from the outset. Our in-house counsel manage trials from beginning to end, ensuring continuity and a deep understanding of your case. We are adept at preparing strong defence strategies, including conducting independent investigations, obtaining necessary documentation, and challenging any charges that may be unfounded. We can also present character references and expert reports to support your case.
Our goal is to advocate for you and persuade the court to impose the fairest, most lenient penalty possible, reflecting both the offense and your personal circumstances. This could include avoiding immediate imprisonment, having charges dismissed, or obtaining a costs order against the prosecution.
We continuously participate in professional development to stay updated on the latest laws in this area.
For free legal advice, contact our experienced team of criminal defence lawyers 24/7 at 1800 130 120 or visit marcus.mklawfirm.com.au.
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