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Tuesday, 24 September 2002
Page: 4797


Senator Ludwig asked the Minister for Family and Community Services, upon notice, on 19 August 2002:

(1) How many Centrelink benefit recipients have declared Centrelink as a creditor in bankruptcy proceedings for each of the 2000-01 and 2001-02 financial years.

(2) How many of these were rejected as they were considered to be a debt accrued through intentional fraud.

(3) (a) Can the department provide breakdown of the benefits claimed that were determined to be fraudulent; and (b) what was the total cost to the Commonwealth of these benefits for each of the 2000-01 and 2001-02 financial years.

(4) (a) How does the department determine that a debt has been accrued through intentional fraud; and (b) can examples be provided to illustrate the process.


Senator Vanstone (Minister for Family and Community Services and Minister Assisting the Prime Minister for the Status of Women) —The answer to the honourable senator's question is as follows:

(1) The Insolvency & Trustee Service Australia (ITSA) has advised that:

· during the financial year 2000-01, Centrelink was listed as a creditor in 1,563 bankruptcy proceedings; and

· during the financial year 2001-02, Centrelink was listed as a creditor in 1,989 bankruptcy proceedings.

Not all of these people were receiving Centrelink payments at the time of bankruptcy.

(2) Centrelink does not maintain this type of statistical information. Centrelink resumes recovery of debts obtained through fraud after the period of bankruptcy.

(3) Centrelink does not maintain this type of statistical information.

(4) (a) Centrelink staff decide a debt was obtained by fraud only where it is clear that there was a guilty act and a guilty intention. As bankruptcy is a civil matter, these elements need only meet the civil test (on the balance of probabilities) rather than the criminal test (beyond reasonable doubt).

(b) As an example, if a debt arose because a customer, with no language or reading difficulty, was working and earned $400.00 per week for four months, yet they advised Centrelink every fortnight during this period that they did no work and earned nothing, it is likely that Centrelink would determine false information was provided intentionally to obtain Centrelink payments. The customer would be sent a standard letter advising that Centrelink intended to recover the debt after the period of bankruptcy and inviting contact if they disagreed with the decision, including a belief they did not obtain the money fraudulently.