Acting Commonwealth Ombudsman Mr Ron Brent has found that Centrelink’s mishandling of a Disability Support Pension (DSP) application, and the Commonwealth Director of Public Prosecutions’ (CDPP) subsequent decision to prosecute based on incomplete evidence, led to a fraud conviction for the applicant.

Ms Z’s conviction in August 2007 related to her failure to declare earnings from work she had done while in receipt of a DSP. However, the Ombudsman’s investigation revealed that Ms Z, a woman in her early 50s, did in fact notify Centrelink of the employment that resulted in her conviction—just in the wrong section of the DSP claim form.

‘The consequences of Ms Z’s error should and could have been avoided,’ Mr Brent said, ‘were it not for Centrelink’s failure to act on the information provided, its failure to keep good records of its dealings with Ms Z, its confusing forms and correspondence with Ms Z, inadequate advice, a substandard investigation of the case, and provision to the CDPP of a misleading and incomplete proposal to prosecute.

‘However, Centrelink is not entirely responsible for the problems in this case. The CDPP failed to notice that parts of the evidence were missing, or if it did notice, it did not attempt to obtain the missing information or find out if it was relevant to the question of Ms Z’s intention to commit fraud and, therefore, the decision to prosecute.’

The Acting Ombudsman demonstrated his point by suggesting that a person who intended to defraud Centrelink by not disclosing employment income was unlikely to have revealed the details of the employment from which that income was to be derived, as Ms Z had done.

‘It is also of great concern to me—especially given the potentially grave cost to the customer—that while Ms Z maintained throughout the fraud investigation that she had declared her employment to Centrelink, no attempt was made to explore this claim.’

Mr Brent said it was not for his office to disagree with the decision reached by the Court, but it was appropriate to examine the administrative steps taken by a government agency in deciding to prosecute, and the conduct of the prosecution.

‘Had this matter not been handled so badly, it is possible that Ms Z would not have been prosecuted,’ he said. ‘It is possible also, had other matters identified in our investigation been brought to the attention of the Court, that she would not have been convicted.’

The Acting Ombudsman made several recommendations, including that:

Download the report: Centrelink and Commonwealth Director of Public Prosecutions: Review of circumstances leading to a fraud conviction

Media contact: Media 02 6276 3759

Date of release: 4 May 2010

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      04 May 2010: Fraud conviction began with a mistake on a form

      Acting Commonwealth Ombudsman Mr Ron Brent has found that Centrelink’s mishandling of a Disability Support Pension (DSP) application, and the Commonwealth Director of Public Prosecutions’ (CDPP) subsequent decision to prosecute based on incomplete evidence, led to a fraud conviction for the applicant.

      Ms Z’s conviction in August 2007 related to her failure to declare earnings from work she had done while in receipt of a DSP. However, the Ombudsman’s investigation revealed that Ms Z, a woman in her early 50s, did in fact notify Centrelink of the employment that resulted in her conviction—just in the wrong section of the DSP claim form.

      ‘The consequences of Ms Z’s error should and could have been avoided,’ Mr Brent said, ‘were it not for Centrelink’s failure to act on the information provided, its failure to keep good records of its dealings with Ms Z, its confusing forms and correspondence with Ms Z, inadequate advice, a substandard investigation of the case, and provision to the CDPP of a misleading and incomplete proposal to prosecute.

      ‘However, Centrelink is not entirely responsible for the problems in this case. The CDPP failed to notice that parts of the evidence were missing, or if it did notice, it did not attempt to obtain the missing information or find out if it was relevant to the question of Ms Z’s intention to commit fraud and, therefore, the decision to prosecute.’

      The Acting Ombudsman demonstrated his point by suggesting that a person who intended to defraud Centrelink by not disclosing employment income was unlikely to have revealed the details of the employment from which that income was to be derived, as Ms Z had done.

      ‘It is also of great concern to me—especially given the potentially grave cost to the customer—that while Ms Z maintained throughout the fraud investigation that she had declared her employment to Centrelink, no attempt was made to explore this claim.’

      Mr Brent said it was not for his office to disagree with the decision reached by the Court, but it was appropriate to examine the administrative steps taken by a government agency in deciding to prosecute, and the conduct of the prosecution.

      ‘Had this matter not been handled so badly, it is possible that Ms Z would not have been prosecuted,’ he said. ‘It is possible also, had other matters identified in our investigation been brought to the attention of the Court, that she would not have been convicted.’

      The Acting Ombudsman made several recommendations, including that:

      • Centrelink apologise to Ms Z in writing and invite her to lodge an application for compensation
      • Centrelink confer with the CDPP to identify what action should be taken to have Ms Z’s conviction reviewed in the context of the evidence that should have been provided to the CDPP or the Court, but was not, and assist Ms Z to pursue the action/s identified
      • Centrelink review its procedures for monitoring fraud investigations to ensure that problems of the kind identified in this investigation do not recur
      • the CDPP reconsider Ms Z’s case immediately so that she can be advised whether the CDPP would still seek a conviction if she appealed.

      Download the report: Centrelink and Commonwealth Director of Public Prosecutions: Review of circumstances leading to a fraud conviction

      Media contact: Media 02 6276 3759

      Date of release: 4 May 2010