Centrelink and Social Security Fraud Charges
Clear advice on Commonwealth penalties, defences and the federal prosecution process.
Centrelink fraud is a Commonwealth matter, not a state offence, and is generally prosecuted under the Criminal Code Act 1995 (Cth) or the Social Security (Administration) Act 1999 (Cth) rather than NSW legislation. It typically arises where a person continues to receive a Centrelink payment while knowing they are no longer entitled to it, fails to declare income, assets or a change in relationship status, or makes a false statement to obtain or increase a payment. These matters are usually detected through Services Australia’s data-matching and compliance review processes, sometimes years after the payments were received.
The charge laid depends heavily on the nature of the conduct. Continuing to receive a benefit while knowing there is no entitlement, without any further active deception, is typically charged under section 135.2 of the Criminal Code (Cth) as obtaining a financial advantage. More serious, deliberate conduct — such as actively lying, using a false identity, or submitting fabricated documents — is more likely to be charged under section 134.2 of the Criminal Code (Cth) as obtaining a financial advantage by deception, which carries a far higher maximum penalty. A separate, lower-level offence under section 136.1 of the Social Security (Administration) Act 1999 (Cth) applies to false or misleading statements made to Centrelink.
Because these are Commonwealth offences, they are prosecuted by the Commonwealth Director of Public Prosecutions (CDPP) rather than the NSW Police or the NSW DPP, and sentencing follows Commonwealth principles under the Crimes Act 1914 (Cth), including different options to state law for dealing with an offence without a conviction. A related, separate issue is the civil debt Services Australia can raise to recover any overpayment, which exists independently of whether a criminal charge is laid, and repaying that debt does not automatically resolve any criminal charge.
Penalties
What you could be facing
| Penalty | Maximum | Notes |
|---|---|---|
| Obtaining a financial advantage (s135.2 Criminal Code (Cth)) | 12 months imprisonment | Applies where a person continues to receive a Centrelink payment knowing they are not entitled to it, without necessarily making any further false statement. Typically dealt with summarily in the Local Court exercising federal jurisdiction. |
| Obtaining a financial advantage by deception (s134.2 Criminal Code (Cth)) | 10 years imprisonment | Applies to more serious and deliberate conduct involving an active false representation, such as a false statement, false documents, or use of a false identity, to obtain or increase a Centrelink payment. Can proceed on indictment for higher-value or more serious matters. |
| False statement or misleading information (s136.1 Social Security (Administration) Act 1999 (Cth)) | 12 months imprisonment | A lower-level offence for providing false or misleading information in connection with a social security payment, often used for less serious or isolated false declarations. |
| Aggravating factors | Sentence increased within the applicable maximum | The total amount overpaid, the duration of the offending, any use of a false identity, and whether the conduct was repeated after a prior warning or review are significant factors at sentencing. |
Possible Defences
Ways this charge can be challenged
Honest and reasonable mistake as to entitlement
Where a person genuinely and reasonably believed they remained entitled to a payment, or was unaware that a change in their circumstances affected their entitlement, this can negate the knowledge required for these offences, particularly the lower-level obtaining a financial advantage offence.
Absence of deception
The more serious offence under section 134.2 requires an active deception — a false representation that caused Centrelink to make the payment. Where no false statement was actually made, or Centrelink’s own error caused an overpayment without any misrepresentation by the accused, this element may not be established.
Lack of knowledge of the overpayment
Both key offences require that the accused knew they were not entitled to the payment they received. Where record-keeping was genuinely confusing, notices from Centrelink were not properly received or understood, or the person reasonably believed their reporting was accurate, this knowledge element can be challenged.
Duress or necessity
In limited circumstances, where a person continued to claim or misrepresented their situation only because of an immediate and genuine threat, or an overwhelming emergency with no reasonable alternative, the defence of duress or necessity may be available, though it is applied narrowly by the courts.
What Happens Next
The Local Court process
- 01
Centrelink fraud matters are usually detected through Services Australia’s data-matching program or a compliance review, followed by a formal review and, in appropriate cases, referral to the Commonwealth Director of Public Prosecutions for a charging decision.
- 02
The accused is typically issued with a court attendance notice or summons rather than being arrested, requiring an appearance in the Local Court exercising federal jurisdiction.
- 03
At the first mention, a plea of guilty or not guilty is entered, and the matter is assessed as to whether it will proceed summarily in the Local Court or, for more serious section 134.2 charges, towards the District Court.
- 04
If a not guilty plea is entered, the prosecution serves its brief of evidence, including Centrelink records, data-matching reports and any recorded interview, before the matter is listed for a defended hearing or committal.
- 05
At any hearing or trial, the CDPP must prove the accused knowingly received a payment they were not entitled to, and, for the more serious charge, that they did so by deception, beyond reasonable doubt.
- 06
If a guilty plea is entered, or the charge is proven, sentencing follows Commonwealth principles under the Crimes Act 1914 (Cth), including the availability of a non-conviction order or a recognizance release order in appropriate cases, alongside the separate civil debt owed to Services Australia.
Frequently Asked Questions
Common questions
No. A Centrelink debt is a civil recovery matter raised by Services Australia to recoup an overpayment, and exists independently of any criminal charge. A person can be required to repay a debt without ever being criminally charged, and repaying a debt does not automatically resolve a charge that has already been laid.
Obtaining a financial advantage under section 135.2 applies where a person simply continued to receive a payment knowing they were not entitled to it, while obtaining a financial advantage by deception under section 134.2 requires an active false representation, such as a false statement or document, and carries a substantially higher maximum penalty.
It is possible under Commonwealth sentencing law, which allows a court to deal with an offence without recording a conviction in appropriate cases, similar in effect to the state law non-conviction outcome, though the availability of this outcome depends on the seriousness and value of the offending.
Lower-level matters, particularly under section 135.2 or the Social Security (Administration) Act, are generally dealt with summarily in the Local Court exercising federal jurisdiction, while more serious or higher-value section 134.2 matters can proceed on indictment.
Yes, proactively disclosing an error or overpayment, and taking steps to repay it before any charge is laid, can be a significant factor both in whether a matter is referred for prosecution at all and, if charged, in the sentence ultimately imposed.
Centrelink fraud is prosecuted by the Commonwealth Director of Public Prosecutions, not the NSW Police or the NSW DPP, and is dealt with under Commonwealth sentencing principles, which differ in some respects from the equivalent NSW state offence and sentencing regime.
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