VIC Centrelink declaration

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grant12

Member
29 June 2020
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hello could someone please assist me . my friend has been on Centrelink for several years now although he works 15 hours per week voluntarily which enables him to receive the minimum payment . but when he originally signed up with Centrelink he did not disclose that he had an apartment overseas on the paperwork . now he intends to sell the apartment at a modest price and his concern is that he has been collecting payments albeit working 15 hours per week meeting his conditions but what will happen if he sells the property that has not been declared on the original paperwork . will he be ordered to backpay or reimburse Centrelink a portion of money already received or will he be required to reimburse the full amount and how will this work if she suddenly declares ownership of an overseas property after being on Centrelink for several years . any advice is appreciated
 

grant12

Member
29 June 2020
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Centrelink indicated that it is an asset not a form of income and if he did decide to declare it and sell it he would not have to reimburse Centrelink as it is classed as an asset but here is the caveat . my friend has been deriving 100 per week rent from this property for the last five years approx which totals 25k rental income stream over that period which is deposited into an overseas bank account that is not linked or disclosed to any Australian institutions so would he have to declare to Centrelink that he has been receiving rent for this period or because it is an overseas bank they have no ability to access these details so a sale could be conducted and the sale of the property could be declared to Centrelink . ? or could they launch an investigation and uncover that she has been deriving rent for that period . thanks
 

Rob Legat - SBPL

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16 February 2017
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So your friend has been receiving $25,000 per year in income over five years that has not been declared to Centrelink? As you can see from this page, that income must be declared: Income from outside Australia - Services Australia

So does the income need to be declared? Yes, absolutely.

Centrelink likely doesn't disclose its investigation methods (so that people don't find a way around them) and no one here should give any tips or guides on how to commit a Commonwealth crime. Failure to disclose income is a fraud, and is liable to a criminal penalty under the Criminal Code Act 1995 (Cth) (see here: Social Security Fraud | Commonwealth Director of Public Prosecutions) as well as having to pay back the benefits they were not entitled to, plus interest.

I'd also wager there's a good chance this income has not been disclosed on a tax return either, so you can potentially add the ATO to their list of worries as well.
 

grant12

Member
29 June 2020
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thanks for the response . it's only 100.00 per week or 5200 per annum over five years approx which equates to 25k over that five year period . the question I have is if he decides to sell the property he is obligated to report this to Centrelink preferably before point of sale commences so they have it on record . apparently he is not required to reimburse Centrelink on the sale of the property as it is classed as an asset and is of modest value but any derived rental stream must be disclosed so based on this if he decided to declare 5 years of income approx which equates to approx 25k over that five year period how could we calculate an approx figure of reimbursement to Centrelink and also reimbursement to the ATO . thanks
 

Rob Legat - SBPL

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He was obligated to disclose the income five years ago (or however long he's been in receipt of the benefits).

There's no way we can calculate the amounts for Centrelink or the ATO - there's simply too many variables that are not known. However, your friend can look here: Payment and Service Finder - Department of Human Services and here: Income tax estimator , and do the exercise with and without the income to see the difference.
 

grant12

Member
29 June 2020
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thanks for your assistance I placed the values into that calculator for one specific year and the estimate indicated no tax payable . it doesn't allow me to select a five year period of time and tally the figures up for that five year period so it's a bit restricted and doesn't provide an accurate estimate . He has been working for the dole for five years so the figures are . 275.00 per week X 52 weeks = 14300 per annum X 5 years = 71500 over five years plus undeclared rental income of 100.00 per week x 52 weeks = 5200 per annum x 5 years = 26000 so for five years he has received 71,500.00 from Centrelink plus 26,000.00 from undeclared rental so adding both forms of income together equals approx 97,500.00 for that five year period which equates to 19,500.00 per annum which is only 1,300.00 above the minimum tax free threshold of 18,200.00 so if I multiply that by five years it equals 6500.00 income to pay tax on .
 

Tim W

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In a previous life, I did review and compliance for the Department of Social Security
(that's the olden-days name of what is now called "Centrelink").

Let me put it in crayon and little words:
  • Yes, he had to disclose. Failing to do can be an offence;
  • Yes, he will almost certainly be caught even if/ when he doesn't disclose;
  • If Centrelink doesn't catch him, then the ATO will;
  • Back payment, interest, and fines are all on the table, yes.
 

Rob Legat - SBPL

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Sorry, but if you want an actual calculation of tax liability you’re going to need to speak to a tax accountant. I don’t even do my own taxes.
 
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