188.8.131.52 Duty of care
What does duty of care mean?
Australian Government employees have a duty of care to the public when performing their duties. This extends to any advice given and/or any actions performed.
Breaches of duty of care
A breach of duty of care can result from negligent advice and/or a negligent action.
Payment of compensation as a result of negligence can only be considered if DSS, DESE, Services Australia or the ATO have breached its duty to exercise reasonable care. The payment is made under Public Governance, Performance and Accountability Act 2013 (PGPA) section 23.
Decisions under FA law
The majority of decisions made under FA law are decisions that are subject to a right of review and these are determined by this legislative mechanism, rather than being settled under PGPA section 23. Therefore, if negligent advice is given and/or a negligent action occurs, it will rarely result in a common law duty of care and settlement under PGPA section 23.
Contributory negligence occurs when the person affected by the negligence or a third party contributed to the negligence. In such a case, if Services Australia gave negligent advice and/or acted negligently, any compensation may be reduced to reflect the contributory actions of the person affected and/or the third party.
Loss because of taxation liability on arrears payments
Under the Taxation Laws Amendment Act 1988, measures were introduced to allow a 'lump sum payment in arrears' tax offset (formerly called a rebate) on arrears of income payable to a person for previous financial years. The tax offset applies retrospectively to payments made on or after 1 July 1986 and includes assessable pensions, benefits and allowances under the SSAct (1.1.S.80), the Veterans' Entitlement Act 1986, and PLP under the PPLAct.
The tax offset is designed to alleviate the problem of more tax being payable in the year in which the lump sum is received than would have been payable if the lump sum had been taxed in each of the years in which it had accrued.
If a person seeks compensation for a loss in these circumstances, they should first be referred to the ATO for clarification of their entitlement to this tax offset. It may be that after application of the tax offset, no economic loss may exist.
If the tax offset does not apply, or does not relieve the person of the additional taxation liability in full, the claim should be considered under PGPA section 23. If it can be accepted that the taxation liability in question arose from Services Australia negligence, then the claim may be settled under that direction. If no negligence occurred, the matter may still be considered under the CDDA.
Act reference: Public Governance, Performance and Accountability Act 2013 section 21 Non-corporate Commonwealth entities, section 23 Power in relation to arrangements and commitments