Wow, people are so harsh.
Your friend probably hasn't thought about this enough to realise how wrong and unfair it is. She probably just had the idea spontaneously, when filling in the forms. I'm sure that once you explain to her the effect of her behaviour, and where that money is actually coming from, she will realise. And remind her that she will get caught easily.
As soon as she applies for a loan, with her partner or without, Centrelink will start checking up. And I am sure one day she will want to get a loan.