News · Criminal law explainer
Centrelink and welfare fraud in Australia.
Overpayments from Centrelink can turn into criminal charges where the government says the money was obtained dishonestly. These are Commonwealth matters, prosecuted under the Criminal Code (Cth) and handled by the Commonwealth Director of Public Prosecutions. This note explains the main offences, the penalties, what repayment does and does not achieve, and how these cases are defended.
By Aaron Kernaghan · Published 3 September 2026
What offences apply to welfare fraud?
Two Commonwealth offences do most of the work. Section 135.2 of the Criminal Code makes it an offence to engage in conduct that obtains a financial advantage from a Commonwealth entity, knowing or believing the person is not eligible to receive it. Section 134.2 makes it an offence to obtain a financial advantage by deception.
The difference is deception. Section 134.2 requires a dishonest deception, such as false statements about income or circumstances. Section 135.2 is broader and can apply to a failure to disclose a change of circumstances, where the person knew they were not eligible for what they continued to receive.
What must the prosecution prove?
For section 135.2, the prosecution must prove the person engaged in conduct, obtained a financial advantage from a Commonwealth entity, and knew or believed they were not eligible. For section 134.2, it must prove a deception, done dishonestly, that obtained the advantage.
Dishonesty and knowledge are the parts most often in issue. A genuine mistake, a misunderstanding of a complex payment rule, or a failure that was not dishonest can be a real answer to the charge.
What are the penalties?
The maximum penalty for obtaining a financial advantage by deception under section 134.2 is 10 years imprisonment. Obtaining a financial advantage under section 135.2 carries a maximum of 12 months for the basic offence. The penalty that a court actually imposes depends heavily on the amount involved, the period, and whether the conduct was a deliberate scheme or a failure to update details.
Larger, deliberate frauds over long periods are treated much more seriously than smaller overpayments that arose from a failure to report a change. The amount and the nature of the conduct drive the outcome.
Does repaying the money help?
Repaying the debt is important, and it is looked on favourably at sentence, but it does not make the charge go away. The debt to Centrelink and the criminal charge are separate. A person can be prosecuted even after the money has been repaid.
That said, repayment, cooperation, and early acknowledgement can significantly affect the sentence. They show the loss has been made good and can support a lenient outcome where the conduct is at the lower end.
How are these cases defended?
The defence looks closely at dishonesty and knowledge. Did the person understand their obligations? Was there a genuine mistake about a complex rule? Was the failure to report deliberate, or an oversight? The paperwork, the person's circumstances, and the way the payments worked all matter.
These are Commonwealth prosecutions with their own procedures, and the calculation of the alleged overpayment is often open to challenge. Advice before any interview with investigators is important, because what a person says can shape the case. Our note on Commonwealth financial-advantage offences covers related territory.
Frequently asked.
What law covers Centrelink fraud?
Welfare fraud is prosecuted under the Criminal Code (Cth), mainly section 135.2, obtaining a financial advantage, and section 134.2, obtaining a financial advantage by deception. It is handled by the Commonwealth Director of Public Prosecutions.
What is the difference between section 134.2 and 135.2?
Section 134.2 requires a dishonest deception, such as false statements, and carries up to 10 years. Section 135.2 is broader, can apply to a failure to disclose a change of circumstances, and carries up to 12 months for the basic offence.
Will repaying the debt stop the charge?
No. The Centrelink debt and the criminal charge are separate, and a person can be prosecuted even after repaying. Repayment is, however, looked on favourably at sentence.
What is the penalty for welfare fraud?
It depends on the offence and the conduct. Obtaining a financial advantage by deception carries up to 10 years. The sentence turns on the amount, the period, and whether it was a deliberate scheme or a failure to report a change.
Is a genuine mistake a defence?
It can be. The offences require dishonesty or knowledge of ineligibility. A genuine mistake, a misunderstanding of a complex payment rule, or a non-dishonest failure can be a real answer to the charge.
To speak to a criminal defence lawyer, call Aaron Kernaghan on 0421 717 019.
This article is written by Aaron Kernaghan, criminal defence lawyer at Good Legal Lawyers, as at 3 September 2026. It is commentary and reflects the personal opinion of the author only. It is not legal advice, it is not a substitute for advice on your own matter, and it does not purport to be accurate or complete. Any matter referred to may be before the court and any person charged is presumed innocent. For advice on a specific matter, contact Aaron Kernaghan on 0421 717 019 or contact the firm.
More criminal-law commentary by Aaron Kernaghan.
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