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.
Chief Executive Instruction No.5.18
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.
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Chief Executive Instruction No.5.18
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.
Chief Executive Instruction No.5.19
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.
Compensation for detriment caused by defective administration
Section 3.9.2 Compensation for Detriment Caused by Administrative Error
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.
Chief Executive Instruction No.5.18