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3.9.3 Act of Grace Payments

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What is an Act of Grace payment

An Act of Grace payment may be made where a person has suffered a loss. Although there is no legal liability on the Commonwealth to meet the loss, it is considered that the Commonwealth bears some responsibility for the loss. In certain special circumstances a person that may not have met the eligibility criteria for service pension or income support supplement may be considered under the 'act of grace' provisions. An act of grace payment is not a service pension or income support supplement.    

Eligibility for an Act of Grace payment

Eligibility for an Act of Grace payment depends on the claimant's circumstances and a wide range of matters may be taken into account to determine eligibility Although there is no set eligibility criteria for an Act of Grace payment, claims may be considered where:

  • a person received incorrect advice leading to detriment, but where there is no legal liability,
  • a matter is covered by legislation, but its application produces a result which is unintended, anomalous, inequitable or otherwise unacceptable,
  • it is considered desirable to apply the benefits of proposed legislation, or
  • there are other special circumstances where there may be a moral obligation to make a payment.    
Request for an Act of Grace payment

Requests for 'Act of Grace payments' can arise from almost any aspect of Australian Government administration and include payments normally paid under Part III (service pension) or Part IIIA (income support supplement) of the VEA.    

Claims for Act of Grace payments

A claim for an Act of Grace payment should first be considered under the criteria for 'compensation for detriment caused by administrative error'. If a claim satisfies that criteria it will be determined under the compensation for detriment provisions. Claims that do not satisfy the compensation criteria may be determined under the Act of Grace provisions.    

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Compensation for detriment caused by defective administration

Section 3.9.2 Compensation for Detriment Caused by Administrative Error

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Example of an Act of Grace payment

The income and assets test exemptions provided for in the Aged Care Amendment Bill 1998 were intended to apply to residents from 6 November 1997. The exemptions were provided in the form of 'Act of Grace' payments until Royal Assent was obtained.

Authority for payments under Act of Grace

Act of Grace payments may be made only with the approval, under section 33(1) of the Financial Management and Accountability Act 1997, of the Minister for Finance or their appointee. This legislation places the responsibility for assessing whether satisfactory grounds for such payment exist on the Minister of Finance alone. However, for those cases recommended by the Ombudsman for compensation each chief executive is appointed by the Minister for Finance, as an 'authorised person', with the express intention that they confine the exercise of the Act of Grace power.    


A service pension is an income support payment broadly equivalent to the social security age and disability support pensions. It may be paid once a veteran or partner has reached the nominated age or is incapacitated for work.

ISS is an income support payment that may be paid to eligible war widows and widowers under the VEA and persons receiving wholly dependent partners' compensation under the MRCA, and who satisfy the means tests. It is an indexed rate, increased twice-yearly in March and September in line with changes to the cost of living and/or average wages. Income Support Supplement (ISS) legislation commenced on 20 March 1995. It is a payment created to replace the ceiling rate income support age, carer, wife and disability support pensions, paid to war widows/widowers by Centrelink.

 

 

Veterans' Entitlements Act 1986.