The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

11.1.4 Compensation, act of grace & waiver of debts

Context

In certain circumstances, a parent may be eligible for compensation from the Commonwealth for mistakes made in the management of their case, or may be eligible for waiver of a debt owed to the Commonwealth where the collection of that debt would be considered inequitable, or would cause ongoing financial hardship.

Act of grace payments and waivers of debt are ‘last resort’ mechanisms, which will generally only be considered once alternate remedies have been sought.

On this page

Types of compensation

The Commonwealth has a number of discretionary mechanisms to address financial impacts of decisions of the Commonwealth that have an unintended, unfair, unreasonable or inappropriate impact.

Act of grace payment

An Act of grace payment is generally a remedy of last resort and is not used when there is another viable remedy available to provide redress in the circumstances giving rise to the application.

An act of grace payment can only be approved by the Finance Minister or authorised delegates of the Department of Finance (PGPA Act section 65).

Information about the act of grace mechanism is available on the Services Australia website 'Claiming compensation from us' or the Department of Finance website 'Act of grace mechanism'.

Compensation for Detriment caused by Defective Administration (CDDA) scheme

The CDDA scheme allows Commonwealth agencies to consider and provide compensation for inappropriate actions (defective administration) by that agency that has caused a loss (detriment).

Information about discretionary compensation mechanisms is available on the Services Australia website 'Claiming compensation from us' or the Department of Finance website.

Waiver of a debt owed to the Commonwealth

A person may owe a debt to the Commonwealth, for example, a child support debt (1.1.C.90) or a debt arising from an overpayment (1.1.O.20) of child support (1.1.C.60).

Requests for a waiver are considered on a case-by-case basis. A waiver may be appropriate where recovery of the debt would be inequitable, or recovery of the debt would cause ongoing financial hardship. A debt is unlikely to be waived where it is a debt that is owed to the Commonwealth that will be paid on to a third party.

A debt owing to the Commonwealth can only be waived by the Finance Minister or authorised delegates of the Department of Finance (PGPA Act section 63).

The waiver powers are intended to be used in a limited number of cases to ensure equity in the impact of Government activities.

How to make a claim

If a person believes that they are entitled to compensation they need to apply in writing.

A request for a CDDA payment can be made to Services Australia.

A request for an act of grace payment can be made directly to the Department of Finance using the Application for an act of grace payment form. The Department of Finance will notify Services Australia when an application for an act of grace payment is received.

A request for waiver of a Commonwealth debt can be made directly to the Department of Finance using the Application for a Waiver of Debt owed to the Government form. The Department of Finance will notify Services Australia when a request for waiver is received.

Settlement of claims

Services Australia can only spend public monies in the ways specified by the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Public Governance, Performance and Accountability Rule 2014.

The policy for payment of legal claims is set out in the Legal Services Directions 2017 at Appendix C - Handling monetary claims. The principles for deciding and settling claims are set out in Appendix B - The Commonwealth's obligation to act as a model litigant.

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