Customer compensation and act of grace payments 109-07040000

If a customer wants to claim compensation or an act of grace payment, encourage and help the customer to:

• consider whether there is a quicker and simpler way to address their concern
• consider available review and appeal options, noting time limits may apply to lodging an appeal at the Administrative Review Tribunal (ART)
• read the information on the Services Australia website about claiming compensation

Service Officers can contact the Review Investigations Team by email for advice and information. If the matter is urgent, mark the email as urgent.

Under no circumstances discuss the possible outcome of a compensation claim.

The legal or administrative mechanism used to deal with a compensation claim will vary. It depends on the nature of the claim and whether the agency considers it may be legally liable if the matter went to court.

For more information, see Table 2.

If, after Step 1, the customer:

• wants to lodge a compensation claim, go to Step 3
• is seeking an act of grace payment, go to Step 4
• is identified as experiencing vulnerable circumstances, go to Step 5

Advise the customer they can lodge a compensation claim by completing a Compensation Application (SS509) form.

Tell the customer they can get an SS509 by:

• downloading it from the agency’s website
• going to a service centre and asking for a form to be printed
• asking the agency to post them a copy of the form

Customers can lodge an SS509 by:

• uploading the completed form using their Centrelink online account, or
• returning it to the agency by post using the postal address on the SS509 form

See Resources page for a link to the form.

The agency will confirm receipt of the application within 14 days. If a customer has not received acknowledgement of their claim within 14 days, go to Step 8.

Exceptions: for customers experiencing vulnerability and certain third parties, go to Step 5.

If a compensation claim is received at a service centre, go to Step 7.

Advise the customer that the Department of Finance is responsible for deciding act of grace claims and that they can obtain more information about making such a claim from:

• the Department of Finance website (see Resources page for a link)
• by phoning the Department of Finance on 1800 227 572 (calls from mobile phones at mobile phone rates)

Exceptions: for vulnerable customers and certain third parties, go to Step 5

If it is considered unreasonable to expect the customer to independently complete the Compensation Application form (SS509) or to lodge an act of grace claim with the Department of Finance, the Service Officer should help the customer by completing the online claim form on their behalf. See Resources page for a link to the online claim form.

To determine if completing the online claim form on the customer’s behalf is appropriate, see Identifying customer vulnerability and risk issues.

If correspondence is received from a third party (such as a member of parliament or the Ombudsman’s office) requesting that the agency consider a compensation payment for a customer, promptly forward the correspondence to the Review Investigations Team mailbox. If the matter is urgent, mark the email as urgent.

Advise the customer that once the claim is received by the Review Investigations Team, a letter confirming receipt of their application will be sent.

When a compensation claim is allocated to a case manager, the case manager will:

• contact the customer to discuss the claim
• investigate and write a submission for the authorised decision maker
• inform them of the outcome

If the customer has not received a written acknowledgement within 14 days of lodging an application, go to Step 8.

Advise the customer that communications about compensation claims are not sent via their myGov account.

For act of grace claims received from vulnerable customers, the claim manager will forward the claim to the Department of Finance for consideration.

If a compensation claim is received (preferred form or otherwise), promptly scan the Compensation Application (SS509) to the customer's record.

If the customer indicates they intend to upload the SS509 to their record, advise them, they will get an acknowledgement letter receipt within 14 days of the SS509 being received.

If an SS509 is received by Child Support, forward to the Review Investigations Team mailbox. If the matter is urgent, mark the email as urgent.

SS509 forms are acknowledged within 14 days of receipt by the Review Investigations team.

The Acknowledgement letter requests that customers do not contact the Agency to query the status of their claim as this will not quicken the process.

Claims are considered in the order they are received. The Review Investigations team will contact the customer when their claim is allocated to a Case Manager.

If a customer lodged their claim more than 14 days ago and has not received an acknowledgement letter, send an email to the Review Investigations Team with:

• the customer’s details, and
• a copy of the claim form

The Review Investigations team will make sure the customer receives a receipt letter for their claim. If the matter is urgent, mark the email as urgent.

The Review Investigations Team is responsible for processing claims under the Compensation for Detriment caused by Defective Administration Scheme relating to the Centrelink, Child Support and Medicare programmes.

Decisions on act of grace claims are made by the Department of Finance. However, if an act of grace claim is received by the agency in relation to the:

• Centrelink and Child Support programmes, the Review Investigations Team liaises with the Department of Finance about the claim
• Medicare programmes are co-ordinated by the relevant Medicare business area and not the Review Investigations Team

Additionally, the Review Investigations Team can provide advice and support to business areas about the act of grace mechanism as a possible remedy. If the matter is urgent, mark the email as urgent.

If it is reasonable to conclude that the agency, on behalf of the Commonwealth, would be found liable if the matter were litigated in court, a claim must be settled in accordance with Appendix C: Handling Monetary Claims set out in the Legal Services Directions 2025 issued by the Attorney-General under section 55ZF of the Judiciary Act 1903. See References page for a link.

The CDDA Scheme is a discretionary mechanism that allows the agency to pay compensation when a person or organisation has suffered detriment because of the agency’s defective administration and when there is no legal requirement to make a payment.

Claims for compensation under the CDDA Scheme are assessed in accordance with guidelines issued by the Department of Finance in Resource Management Guide 409: Scheme for Compensation for Detriment caused by Defective Administration (RMG 409). RMG 409 is available on the Department of Finance website. See the References page for a link.

Consistent with RMG 409, compensation under the CDDA Scheme is only payable when a customer has suffered detriment because the agency:

• unreasonably failed to comply with its existing administrative procedures that would normally have applied to the customer's circumstances
• unreasonably failed to institute appropriate administrative procedures to cover a customer’s circumstances
• gave advice to (or for) a claimant that was, in all the circumstances, incorrect or ambiguous, or
• unreasonably failed to give to (or for) a claimant the proper advice that was within an agency official's power and knowledge to give (or reasonably capable of being obtained by the official to give)

The act of grace power is intended to ensure consistency and equity in the impact of government activities where other legislative and administrative provisions do not take sufficient account of the unique circumstances of individual cases.

The act of grace power is in section 65 of the Public Governance, Performance and Accountability Act 2013. It allows the Finance Minister (or relevant delegate within the Department of Finance) to make payments that would not otherwise be authorised by law.

The Finance Minister or delegate can make an act of grace payment when it is considered appropriate to do so because of special circumstances. Special circumstances are not defined but may apply when:

• an act of a non-corporate Commonwealth entity, such as the agency, has caused an unintended and inequitable result to the individual or organisation seeking the payment
• Commonwealth legislation or policy has had an unintended, anomalous, inequitable or otherwise unacceptable impact on the claimant’s circumstances, or
• the matter is not covered by legislation or specific policy, but the Commonwealth Government intends to introduce such legislation or policy

Act of grace payments may not be approved, for example, when the proposed payments would:

• supplement capped payments set by other specific legislation, if that legislation expresses the clear intention that particular payment levels cannot be exceeded in any circumstances
• establish a payment scheme to apply to a group of individuals, without considering the merits of their requests on an individual basis

For more information on how act of grace claims are decided, see the References page for a link to the Department of Finance Resource Management Guide 401: Requests for discretionary financial assistance under the Public Governance, Performance and Accountability Act.

Internal business teams can also contact the Review Investigations Team.

There is no statutory timeframe in which to finalise legal liability and CDDA claims. The Review Investigations Team generally resolves claims in the order they are received.

A letter acknowledging the claim will be sent to the customer within 14 business days.

There is no formal review mechanism at law for reconsideration of a CDDA decision or a decision not to settle a matter under Appendix C of the Legal Services Directions 2025 (see ltem 2 Legal liability).

However, if the customer indicates they have new information about their case or they believe there has been a factual error in deciding the case, the Service Officer should encourage the customer to first contact the claim manager who investigated the claim to raise these matters. Information for customers about their options if they disagree with the outcome of their claim, are provided within the compensation decision letter.

Generally, the agency will only reconsider a compensation decision where the customer identifies an error of fact in the decision or provides relevant new facts or evidence relevant to their claim for compensation.

Additionally, it is open to a customer to complain to the Commonwealth Ombudsman if they are unhappy about the decision or how the agency handled their claim. Customers can contact the Ombudsman’s office for the cost of a local call anywhere in Australia.