Section 116: Civil penalties for incorrect statements and failures to disclose information
588.Section 116 inserts new sections 115C (incorrect statements etc) and 115D (failure to disclose information) into SSAA 1992. The purpose is to provide for a civil penalty where claimants fail to disclose information that would affect benefit entitlement or the amount of benefit payable, fail without reasonable excuse, to report changes of circumstances or negligently provide incorrect information.
115C Incorrect statements etc
589.New section 115C(1) sets out the circumstances in which a penalty can be applied under section 115C. It applies to a person negligently giving incorrect statements or representations, or negligently giving information or evidence either in connection with a claim for, or an award of a benefit, when the person does not take reasonable steps to correct the error. The act or omission must have resulted in an overpayment of benefit which is not being dealt with through fraud action.
590.New section 115C (2) provides for the amount of the penalty to be prescribed in regulations. Section 115C(2)(a) provides that a penalty imposed under section 115C may be imposed on the person who acted negligently in the various ways set out in section 115C(1)(a). Alternatively, in the case of a claim for benefit made jointly, under section 115C(2)(b) the penalty may be imposed on the other member of the joint couple. This is, however, subject to the limitation in section 115C(3) that it cannot apply if the other member was not, and could not reasonably have been expected, to be aware that the negligent statement, representation or incorrect information had been given by the other person.
591.Section 115C(4) provides for the penalty to be recoverable from the person on whom it was imposed under section 115C(2). Sections 71ZC to 71ZE of SSAA inserted by section 105 provide powers to provide for different methods of recovery by way of deduction from benefit, deduction from earnings and court action. New section 115C(5) allows the appropriate authority referred to in new section 115C (4) to recover penalties by these means.
592.New section 115C(6) provides definitions of “appropriate authority”, “overpayment” and “relevant social security benefit” for the purposes of new sections 115C and 115D.
115D Failure to disclose information
593.New section 115D allows for a penalty to be imposed where a person, without reasonable excuse, fails to provide information required either in relation to a claim or an award or to notify relevant changes of circumstances (defined in new section 115D (6)) that affect their claim, and the person does not take reasonable steps to correct the error. Both situations must result in an overpayment being made before the penalty would be imposed. The act or omission must have resulted in an overpayment of benefit which is not being dealt with through fraud action.
594.Subsections (1) and (2) of new section 115D set out the circumstances in which a penalty under section 115D may be imposed.
595.New section 115D(3) provides that in the case of a joint claim where both members of the joint claim couple fail to meet requirements described in new sections 115D(1) and (2), only one penalty will be imposed for the failure.
596.New section 115D(4) provides that the penalty is recoverable from the person on whom it was imposed. New section 115D(5) has the effect that the methods by which this can be done include, as with new section 115C, deduction from benefit, deduction from earnings and court action.
