In this alert, Senior Associate Aaron Clark and Solicitor Matthew Boyce discuss a recent decision of the Australian Capital Territory Supreme Court.  In this case, a worker in receipt of workers’ compensation benefits fraudulently asserted he was unemployed in order to continue receiving approximately $65,000.00 in benefits, while he was covertly working as a taxi driver.[1]

Key Points

  • Workers’ compensation fraud has repercussions on all customers of a scheme.  It increases the burden on the taxpayer and reduces available resources to spend on the genuinely injured.
  • In Queensland, like the ACT, those found guilty of workers’ compensation fraud may be subjected to custodial sentences and financial penalties.
  • There remains a positive obligation on employers and insurers to report fraudulent, false or misleading information.

Facts

The defendant was an employee of the Australian Capital Territory Ambulance Service when he suffered an injury to his lower back.  Following the injury, the defendant was paid compensation by Comcare from 27 August 1991 onwards.  Comcare is a statutory authority liable to compensate Commonwealth or other eligible employees, including those working for the ACT Government, who have suffered an injury resulting in impairment or an incapacity for work. 

In order to continue receiving compensation, the defendant was required to provide medical evidence confirming he was still incapacitated by his back condition.  He was also required to notify Comcare of any income he had received from sources other than Comcare.  This information would then be used to determine the level of benefits the defendant was entitled to.

In February 2009, the defendant commenced employment as a taxi driver.  On 9 February 2009, he expressly denied to Comcare he was working in any capacity.  An investigation was commissioned in May 2010, during which surveillance was obtained of the defendant operating a taxi every week for 8 to 10 hours at a time.  The defendant’s home was subsequently searched by the Federal Police and further evidence of his activities as a taxi driver was found.

From 9 February 2009 to 9 December 2010, the defendant derived in excess of $120,000.00 in income from his employment as a taxi driver.  During this time, he also continued to receive approximately $72,000.00 in compensation benefits.  This amounted to the defendant fraudulently receiving some $65,000.00 more than a person deriving his level of income was entitled to receive.

Decision

The defendant argued that he had re-commenced work to fulfil a desire to “rejoin the community as an active participant in people-focused employment”.  However, Acting Chief Justice Refshauge noted this could have been achieved by the defendant without acting fraudulently.

His Honour also remarked that the defendant’s actions were not victimless, commenting that fraudulent actions such as these negatively impact the funding available for essential services in addition to increasing the taxation burden on honest taxpayers.  In this regard, His Honour noted the requirement for punishment to “make it clear that defrauding the community… is not worthwhile".[2]

Acting Chief Justice Refshauge acknowledged these offences are “easy to commit but difficult to detect”. [3] As such, custodial sentences ought to be imposed in order to deter offenders.  Ideally, these deterrent measures will avoid the requirement for more checks on the system which would stand only to cause delays in the payment of benefits and possibly hardship to those accessing it.[4]  His Honour stated it is important to protect the current integrity of what is essentially an honesty-based system.

While the defendant cooperated with authorities and admitted to his fraudulent actions, it was noted these actions only ceased once they were discovered.  Ultimately, the defendant was sentenced to two years imprisonment but will be released after serving three months.  He will then be subject to a three year good behaviour bond.  The defendant is also required to make reparation to Comcare by paying the sum of $64,418.62.