skip to content
Law Handbook banner image

Compensation for defective government administration (Commonwealth)

There are three grounds upon which monetary compensation can be obtained for loss suffered as a result of negligence, defective administration or special circumstances arising out of Commonwealth administration:

  1. Payment in settlement of a claim
  2. Compensation for Detriment caused by Defective Administration (CDDA Scheme)
  3. Act of Grace payments

In addition there are provisions to allow for waiver or write-off of debts under certain conditions.

1. Payment in settlement of a claim

What types of claims can be settled in this way?

Can be used to settle claims of legal liability against the Commonwealth – usually for an action in negligence but can also be applied to actions in contract, personal injury and property damage. The Chief Executive of the relevant Commonwealth Agency has the authority to settle claims on the basis of legal principle and practice where there is a substantial likelihood of Commonwealth liability if the matter were to proceed to court.

When the option is not available

This option is not available where claimant had a right of review with the Commonwealth agency and did not exercise that right.

Conditions of settlement

Any offer of payment is not an admission of liability by the Commonwealth i.e. it won’t prejudice the rights of the Commonwealth in the event of future litigation. This means they can still dispute liability and damages in any future court proceedings, despite an offer having been made.

The claimant will be required to sign a deed of release as a condition of settlement. This indemnifies the Commonwealth against further litigation.

Can I get a review of a decision under this scheme?

Decisions under this scheme are not reviewable.

How to apply

Anyone who considers they have suffered economic loss as a result of negligence by a Commonwealth Department or Agency may make a claim to the authorised officers of the Agency or Department. The claim must be in writing and include appropriate details of the alleged negligence and the loss suffered.

2. Compensation for Detriment caused by Defective Administration (CDDA Scheme)

What types of claims can be dealt with by this scheme?

Where it can be shown that an individual or group has suffered loss as a result of poor administration on the part of a government agency, the Compensation for Detriment caused by Defective Administration scheme (CDDA) can provide compensation on a discretionary basis. The scheme is intended to compensate those to whom there is no legal obligation to pay compensation so, unlike payment in settlement of a claim, legal liability is not required.

The intention of the scheme is to restore claimants to the position they would have been in had there been no administrative error. Compensation can be granted for both financial and non-financial loss (i.e. pain and suffering which the claimant can demonstrate having suffered despite taking reasonable steps to mitigate the loss).

The sorts of decisions that are frequently dealt with by the scheme are Centrelink entitlements and child support and tax liabilities. Where a decision has been unreasonably delayed and causes loss to a person the CDDA is designed to address any loss incurred as a result.

What is ‘defective administration’?

‘Defective administration’ is defined as an unreasonable failure by an agency to implement appropriate administrative procedures, comply with existing administrative procedures or to provide proper advice. The fact that an error has been made is not sufficient in itself to give rise to a payment under this scheme – it must also be established that the error in question was unreasonable.

Are decisions under the CDDA scheme reviewable?

Decisions made under the CDDA scheme are not appealable or reviewable. Complaints about the scheme can be made to the Commonwealth Ombudsman.

How to apply

Applications are made directly to the Department or Agency concerned.

3. Act of Grace payments

What types of claims can be dealt with under this scheme?

There are three broad categories in which Act of Grace payments will be considered:

  • where the application of legislation produces unintended anomalous, inequitable, unjust or otherwise unacceptable results in the particular circumstances
  • where the matter is not covered by legislation but it is intended to introduce legislation and it is considered desirable in the particular case to apply the benefits of the proposed legislation retrospectively
  • where the particular circumstances of the case lead to the conclusion that there is a moral obligation on the part of the Commonwealth to make a payment

For a claim to be considered under this scheme there must be special circumstances warranting the payment of compensation, that is, there must be something distinctly anomalous or inequitable about the individual’s situation.

Are decisions about Act of Grace payments reviewable?

There is a right of review against the procedural aspects of the making of Act of Grace payments.

How to apply

Applications must be made to the Department of Finance and Deregulation. There is no required form to be completed by the application should provide the following information:

  • full name, date of birth, postal address and telephone number
  • the relevant circumstances forming the background for the request for payment
  • details of the amount being requested in payment
  • the reasons why you think an act of grace payment should be approved
  • whether an application for review has been made with the relevant Department of Agency – this is required before an Act of Grace payment can be made
  • whether the matter has been appealed to the Ombudsman, a tribunal or a court
  • copies of any relevant documents, including letters between yourself and the Department or Agency involved

For further information you can telephone the Special Financial Claims Section of the Department of Finance and Deregulation on 1800 227 572.

Compensation for defective government administration (Commonwealth)  :  Last Revised: Mon Sep 7th 2009
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.