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3.9.2 Compensation for Detriment Caused by Administrative Error

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What is compensation for detriment caused by administrative error

The purpose of the scheme is to permit a compensatory payment to be made to a claimant for the effects of administrative error. Payment to a claimant may be approved if the relevant authorised person forms an opinion that the claimant has suffered a 'detriment' as the result of the action of an employee of the Department.    

What is defined as 'Detriment'

Detriment can include financial and non-financial loss. The approved definitions, criteria and limitations for the scheme are set out in Attachment A of the Chief Executive Instruction 5.19. The reasons for considering a claim for compensation are described briefly below:

  • a specific and unreasonable lapse in complying with existing administrative procedures that would normally have applied to the claimant's circumstances,
  • an unreasonable failure to institute appropriate administrative procedures to cover a claimant's circumstances,
  • giving advice to or for a claimant that was, in all the circumstances, incorrect or ambiguous, or
  • an unreasonable failure to give a claimant the proper advice that was either known or could be obtained.    
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    Chief Executive Instruction No.5.19 – Attachment A

    http://sharepoint/money/Documents/0681931E_CEI_5_19.tr5

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Request for compensation

Request for 'defective administration compensation' can arise from almost any aspect of Australian Government administration. The scheme is only available to provide compensation in respect of administration by the Australian Government. Under this scheme, the Minister, or any official authorised by the Minister for the purpose, will have the administrative discretion to determine whether a compensatory payment should be made to a claimant for the effects of administrative error.    

Claims for compensation

Any claim that is determined under the provisions for compensation for detriment due to administrative error cannot be reconsidered under Act of Grace. The Act of Grace facility is not to be construed as an alternative remedy.    

Examples of administrative error

The following are two examples of where compensation for detriment caused by administrative error would apply.

  • A veteran was given incorrect advice on when his wife could obtain her superannuation without affecting their pensions. When she obtained the payment the couple had their service pensions reduced to zero for 12 months as a consequence.
  • A veteran received a letter advising that he had rendered qualifying service and was therefore entitled to apply for age service pension when he turned 60. He subsequently retired to care for his seriously incapacitated wife. When he applied for the service pension his claim was refused. The employee had sent him the wrong advice letter and he had not rendered qualifying service.
Delegations to approve claims

Under the scheme, the Minister, or any official authorised by the Minister for the purpose, will have the administrative discretion to determine whether a compensatory payment should be made. The responsibility for the approval of claims depending on the amount is delegated to the:

Authority for payment

Payment of compensation due to administrative error is made in accordance with section 52 of the Financial Management and Accountability Act 1997 and Financial Management and Accountability Regulations 6.The authority for payment is defined in Chief Executive Instruction No.5.19.