Bills Digest no. 2 2011–12
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Mary Anne Neilsen
Law and Bills Digest Section
5 July 2011
Date introduced: 23 June 2011
Portfolio: Tertiary Education, Skills, Jobs and Workplace Relations
Commencement: Various dates as set out in clause 2. Schedule 1 containing the most significant amendments, has retrospective application and commences on 20 March 2000,
the date the Social Security (Administration) Act 1999
Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill's home page, or through http://www.aph.gov.au/bills/. When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.
The main purpose of the Social Security and Other Legislation Amendment (Miscellaneous Measures) Bill 2011 (the Bill) is to amend the Social Security (Administration) Act 1999 (the Administration Act) to address technical issues that have arisen as a result of the recent case of Poniatowska v DPP (Cth), currently on appeal before the High Court.
The Bill inserts a stand alone obligation for a person to inform the Department of events or changes of circumstances that might affect the person’s social security payment or qualification for a concession card. These provisions will commence retrospectively on 20 March 2000 to ensure that past convictions cannot be called into question depending on the outcome of the appeal before the High Court.
The Bill seeks to address problems that have arisen as a result of a recent social security fraud case, Poniatowska v DPP (Cth).
The Administration Act provides various mechanisms aimed at ensuring that persons in receipt of social security payments provide information on matters which may affect their entitlement to, or level of, such payments. For example, section 67 authorises the Department to issue a notice in writing requiring a recipient to inform the Department if there is a change in the circumstances of the recipient. Section 74 of the Administration Act provides that the refusal or failure to comply with such notices constitutes an offence punishable by imprisonment for six months.
Where welfare recipients have failed to comply with these notices the Commonwealth Director of Public Prosecutions (the CDPP) has prosecuted these cases under various sections of the Criminal Code Act 1995 (Criminal Code), particularly section 135.2 ‘Obtaining a financial advantage’. The offence of obtaining a financial advantage is defined as follows:
Obtaining a financial advantage
(1) A person is guilty of an offence if:
(a) the person engages in conduct; and
(aa) as a result of that conduct, the person obtains a financial advantage for himself or herself from another person; and
(ab) the person knows or believes that he or she is not eligible to receive that financial advantage; and
(b) the other person is a Commonwealth entity.
Penalty: Imprisonment for 12 months.
Section 4.1 of the Criminal Code defines ‘engage in conduct’ as meaning:
- to do an act, or
- to omit to perform an act.
The Minister, in his second reading speech, states that prosecutions under section 135.2 involve for the physical element of the offence, proving that
the defendant engaged in conduct, where the relevant conduct is an omission, namely, failing to inform the Department of an event or change of circumstances that might affect the person’s social security payment or qualification for a concession card.
However for an omission to attract criminal liability it must be proven that the omission is the result of a breach of duty to act or where there is an appropriate statutory provision. It is this requirement that has been challenged in the recent case of Poniatowska v DPP (Cth), involving a prosecution for social security fraud under section 135.2 of the Criminal Code.
The original matter involved the defendant, Malgorzata Poniatowska from Adelaide, who had omitted to advise Centrelink of changes in her financial circumstances while receiving parenting payments. The defendant pleaded guilty to 17 counts of obtaining a financial advantage from the Commonwealth knowing that there was no entitlement to it contrary to section 135.2 of the Criminal Code. Convictions were recorded on each count and Ms Poniatowska then appealed against the decision. A single judge of the Supreme Court dismissed the appeal, and the matter subsequently went to the Full Court of the South Australian Supreme Court (FCSASC) where the appellant argued that the complaint was defective in that each of the 17 counts alleged conduct which did not amount to an offence.
The FCSASC set aside the woman’s convictions. The Court found that ‘section 135.2 does not define any duty or obligation relevant to an offence committed by way of omission’. It further noted that the CDPP had not relied on any notice issued to the defendant to establish a duty to inform the Department of an event or change of circumstances, nor was it suggested that the duty was to be found elsewhere in the Administration Act. Rather the approach of the Administration Act is to provide for the issuing of notices by the Department requiring information and to impose a penalty punishable by imprisonment for a failure to comply with such notices. The Court argued that the Administration Act does not create a separate “stand alone” obligation. It therefore concluded:
It follows that the appellant could not, in law, have been convicted of the offences charged in the complaint and this Court should set aside the convictions which were recorded …
The CDPP has appealed against the decision to the High Court, which has, to date, reserved its decision.
The outcome of the High Court appeal has potentially serious implications for CDPP prosecutions under section 135.2 of the Criminal Code dating back to 2000. The Minister’s second reading speech states that the Government’s estimate is that around 15 000 convictions may be open to question as a result of the decision in Poniatowska v DPP (Cth). Furthermore, the CDPP has adjourned or discontinued a large number of matters of this kind before the courts and is also not commencing new proceedings of this kind, pending the determination of the appeal before the High Court.
As noted above, the provisions in Schedule 1 of the Bill, providing a stand alone obligation on welfare recipients to inform the Department of a change of circumstances, are to apply from 20 March 2000 and are therefore retrospective in effect.
While the Parliament has powers to pass legislation retrospectively, it is usual practice for governments to justify the need for retrospective operation and to ensure that the legislation does not unduly impinge on a person’s rights or responsibilities. The retrospective operation of this amendment is not intended to alter any decisions that have been made before. In effect it is ratifying previous decisions made under the current regime.
The Government’s rationale in this matter appears justified. The Minister in his second reading speech states that in this case there are exceptional circumstances justifying retrospectivity, namely that it would not be appropriate for a significant number of prosecutions conducted from 2000 for social security fraud to be overturned on the basis of a previously unidentified legal technicality. Furthermore, the provisions do not create new responsibilities but rather: ‘the effect of the retrospective application is to confirm convictions already made'. If the High Court upholds the decision of the FCSASC then the conviction in this case remains quashed. However, the affect of the retrospective amendments –to correct any technical loopholes in the law-on this and any other similar case may still need to be closely considered.
To date, the Bill has not been referred to a committee for inquiry.
The Explanatory Memorandum states that no direct financial impact will result from the Bill.
Item 1 inserts proposed section 66A into the Administration Act. It imposes an obligation on certain persons to inform the Department of an event or change of circumstances that might affect the person’s social security payment or the person’s qualification for a concession card. The persons to whom this obligation applies are:
- those who have made a claim for a social security payment or a concession card (proposed subsection 66A(1))
- those to whom a social security payment is being paid or who hold a concession card (proposed subsection 66A(2)), and
- those who are not receiving a social security payment but to whom a social security payment has at any time been paid or who do not hold a concession card but who have at any time held a concession card (proposed subsection 66A(3)).
A person to whom this obligation applies must inform the Department within 14 days after the day on which the event or change of circumstances occurs, unless new subsection 66A(4) applies.
Proposed subsections 66A(4) (5) and (6) deal with the interaction of these obligations with the giving of notices under Division 6 of Part 3 of the Administration Act.
As noted above, every person who receives a social security payment or a concession card is sent notices by Centrelink which require the person to inform the Department of events or changes of circumstances which might affect the person’s social security payment or qualification for a concession card. The Explanatory Memorandum states that it is not the intention of the amendment in section 66A to add to a person’s obligations to inform the Department of such events and changes of circumstances.
Therefore proposed subsection 66A(4) provides that if a person is given such a notice and complies with the notice, the person is taken to have complied with the obligation to inform the Department which applies to the person by virtue of new subsections 66A(1), (2) or (3). The Explanatory Memorandum provides the following example of how the provisions will interact:
This means that if the relevant notice provides for a longer period than 14 days in which the person must inform the Department of the event or change of circumstances, and the person provides the information within that longer period, the person is taken to have satisfied the obligation to inform within 14 days in new subsections 66A(1), (2) and (3).
Proposed subsection 66A(6) provides that new section 66A does not limit the power of the Secretary to give a person a notice.
Item 3 is significant as it provides for retrospective application. It provides that this new section 66A applies in relation to an event or change of circumstances that occurs on or after 20 March 2000, that is, the date the Administration Act commenced.
The practical effect of these amendments in Schedule 1 of the Bill is to establish a legal duty to perform an act—that is, inform the Department of changes that may affect social security entitlements. The omission by a person to perform this act would be sufficient to establish the physical element of the offence in paragraph 135.2(1)(a) of the Criminal Code: ‘the person engaged in conduct ‘—that conduct being the omission to perform the act of informing the Department of an event or circumstance that might affect the person’s social security payment or qualification for a concession card, as set out in new subsections 66A(1), (2) and (3).
The retrospective application will have the effect of ensuring previous criminal convictions already made under sections of the Criminal Code, such as section 135.2, cannot be overturned on the basis as there was no legal duty to act an omission was not established. It would also allow the CDPP to commence or continue prosecutions for further matters that have occurred since March 2000.
This Schedule makes technical amendments to the Family Assistance and Other Legislation Amendment (Child Care and Other Measures) Act 2011 and to the Family Assistance Legislation Amendment (Child Care Rebate) Act 2011 to correct drafting oversights. The reader is referred to the Explanatory Memorandum for further explanation.
The amendments in Schedule 3 relate to record keeping of Centrelink and concern section 6A of the Administration Act. Section 6A provides that the Secretary of the Department may arrange for use, under the Secretary’s control, of computer programs to make decisions under the social security law. Such computer program decisions are deemed to be decisions made by the Secretary.
The amendments in item 1 provide that the requirements in this section are taken to have been satisfied in relation to the Secretary’s decisions for the period from 12 June 2001 until commencement of this Schedule.
The Explanatory Memorandum states that when dealing with the matter of Poniatowska v DPP (Cth) it was found that Centrelink records may not be sufficient to prove that the standard that section 6(1A) requires for computer program generated decisions have been met, namely that the Secretary arranged for the use, under the Secretary’s control, of the computer program to make the relevant decision.
Therefore, the application provision in item 1 will ensure that past decisions made in this manner cannot be overturned on the basis that it may not be possible to prove the requisite legislative standards have been met.
According to the Explanatory Memorandum, ‘Centrelink has reviewed its processes to ensure that in future necessary evidence of compliance with these requirements will be available’.
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