CHAPTER 3
Other government compensation mechanisms
3.1
In addition to consideration of state schemes relating to children in
care, the terms of reference required the committee to consider the administration
and effectiveness of other mechanisms that enable governments to make
discretionary payments or to waive the payment of debts, including:
(a)
act of grace and ex gratia payments;
(b)
waiver of debt schemes; and
(c)
the Commonwealth Scheme for Compensation for Detriment caused by
Defective Administration.
3.2
This chapter will examine those other compensation mechanisms.
Act of grace and ex gratia payments
Act of grace payments
3.3
At the Commonwealth level, act of grace payments are made pursuant to
subsection 33(1) of the Financial Management and Accountability Act 1997
(FMA Act). Under subsection 33(1) of the FMA Act, the Finance Minister (or his
delegate) may authorise a payment if he considers it appropriate to do so
because of special circumstances, even though the payment would not otherwise
be authorised by law or required to meet a legal liability.[1]
3.4
The FMA Act does not define what constitutes 'special circumstances'.
However, the Department of Finance and Deregulation has advised that an act of
grace payment may be appropriate in relation to special circumstances that have
occurred as a direct result of:
(a)
the involvement of a government agency, where that involvement caused an
unintended and inequitable outcome for the applicant; or
(b)
the application of legislation or policy, which has resulted in an
unintended, inequitable or anomalous effect on the applicant's particular
circumstances.[2]
3.5
An act of grace payment may also be appropriate where a matter is not
yet covered by legislation or a specific policy, but the Australian Government
intends to introduce such legislation or policy, and it is considered desirable
in a particular case to apply the benefits of the relevant policy
prospectively.[3]
3.6
There is no time limit within which an application for an act of grace
payment must be lodged and there is no financial ceiling on the amount of such
payments.[4]
However, if a proposed payment is likely to involve more than $250,000, the
Finance Minister must request a report from an advisory committee consisting of
the chief executives of the Department of Finance and Deregulation, the
Australian Customs and Border Protection Service and the agency responsible for
the matter to which the payment relates. In these circumstances, the Finance
Minister cannot authorise an act of grace payment without considering the
report of the advisory committee.[5]
3.7
In its submission to this inquiry, the Department of Finance and
Deregulation (Department) noted that, in 2008‑09, act of grace payments
totalling $3.2 million were approved.[6]
In 2009‑10, payments totalling just under $1 million were approved.[7]
The variability of the payments in each year is evident in information the
Department tabled at the Canberra public hearing:
Table 1. Act of grace payments[8]
3.8
The submission from the Department provided the following example of an
act of grace payment made under the FMA Act:
A Disability Support Pensioner (Blind) enrolled in a
university course which required the student to undertake a full year of study
overseas.
People who are permanently blind do not have to satisfy the
work test applied to most Centrelink benefits for people of workforce age. They
are still subject, however, to the pension portability provisions, and lose the
pension if they leave Australia for longer than 13 weeks, except for an
emergency. Being absent from Australia for study, rather than due to an
emergency, the student lost Centrelink benefits and was forced to incur travel
costs for trips back to Australia, and requested reimbursement amounting to
over $5,000.
It was considered that the failure to provide for extended
portability of Disability Support Pension where the person is required to study
overseas as part of an approved study course was not consistent with the
Government's purpose of encouraging people with disabilities to study and
participate in the workforce to the best of their ability. An act of grace
payment was approved on this basis, and the apparent anomaly was brought to the
attention of the Minister for Families, Housing, Community Services and Indigenous
Affairs, for possible legislative change.[9]
3.9
In addition to the general provisions in the FMA Act, there is specific
Commonwealth legislation which enabled one‑off compensation payments of
$25,000 to be made to veterans and civilians who were interned by Japanese
armed forces during World War II.[10]
Ex gratia payments
3.10
In addition to the statutory power to make act of grace payments, the
Commonwealth has an executive power to make ex gratia payments.[11]
In 2004, the Australian National Audit Office (ANAO) reported on a cross‑agency
audit regarding compensation payments and debt relief in special circumstances (the
ANAO report).[12]
The ANAO report explained the difference between ex gratia payments and act of
grace payments by the Commonwealth:
Ex gratia payments are discretionary payments by the
Commonwealth to a group of people who may have suffered a financial, or
non-financial, loss. This contrasts with act of grace payments that tend to be
based on an individual claim and paid to an individual. Ex gratia payments are
based on the inherent Constitutional power of the Government to redress the
effects of particular negative circumstances. Ex gratia programs are approved
by the Prime Minister and/or Cabinet and administered by relevant agencies.[13]
3.11
The ANAO report further explained:
Ex gratia payments are made, usually, to restore equity to a
group of persons, irrespective of whether the Commonwealth has any direct moral
responsibility for the losses the group has sustained. (The provision of relief
for the effects of flood and drought are examples of this type of assistance.)
On the other hand, act of grace payments are made, usually, to effectively
compensate individuals, in special circumstances, where the decision‑maker
determines that the Commonwealth has a direct moral responsibility to provide
recompense.[14]
3.12
The payments made to persons affected by the Bali bombing in October
2002 are an example of ex gratia payments made by the Commonwealth.[15]
As an officer from the Department of Finance and Deregulation explained to the
committee at the Canberra public hearing:
Ex gratia and act of grace are different mechanisms. Ex gratia
is rooted in the Constitution in the executive power section 61. It is a
decision that can be taken by the Prime Minister and/or cabinet in relation to
events which are urgent or unforeseen. For example, after the Bali bombings the
government immediately undertook decisions in relation to an ex-gratia scheme
so that families with either dead or injured members could travel to Bali to be
with them to deal with that situation...The responsibility for the policy for
that mechanism rests with [the] Department of the Prime Minister and Cabinet...
As to the decision-making processes, when that occurs, the relevant
portfolio minister advises the Prime Minister and informs the finance minister,
because financial matters are involved, and a decision is taken on that
basis...Centrelink is responsible for administering those arrangements and how
those payments are made.[16]
3.13
The Department of Families, Housing, Community Services and Indigenous
Affairs (FaHCSIA) gave further examples of circumstances in which the
Commonwealth has made ex gratia payments:
In recent years, FaHCSIA has provided assistance through the
ex gratia mechanism in response to a number of disasters including the
Victorian Bushfires, Samoan Tsunami, Sumatran Earthquake, Mumbai Terrorist
Attacks and North Queensland Floods. Assistance has included $5,000 Funeral
Memorial Assistance, the Newstart‑style Income Recovery Subsidy and other
tailored assistance measures.[17]
3.14
Some states, along with the territories, have specific legislation
providing for act of grace or ex gratia payments,[18]
while other states simply rely on the inherent executive power to make such
discretionary payments.[19]
Settlement of claims for compensation
3.15
It is important to note the difference between act of grace or ex gratia
payments and payments made to settle legal claims for compensation. The Legal
Service Directions 2005 apply where a legal claim for monetary compensation
is made against the Commonwealth.[20]
The Legal Service Directions 2005 require that such claims may only be
settled where there is at least a meaningful prospect of liability being
established.[21]
This contrasts with ex gratia and act of grace payments which are made despite
there being no legal liability to make the payment.
3.16
Examples of payments made by the Commonwealth to settle claims for
compensation include:
(a)
the payment of $2.6 million to Ms Cornelia Rau in relation to her
unlawful detention; and
(b)
the reported payment of $4.5 million to Ms Vivian Solon with respect to
her unlawful deportation.[22]
Waiver of debt schemes
3.17
Under subsection 34(1) of the FMA Act, the Finance Minister (or his
delegate) has various powers in relation to amounts owing to the Commonwealth
including the power to waive the Commonwealth's right to payment.[23]
3.18
Once a debt is waived it is no longer recoverable at law.[24]
The Department of Finance and Deregulation (Department) has advised that it may
be appropriate to exercise the power to waive payment of a debt where the debt
arises as a direct result of:
(a)
the involvement of a government agency (in cases where the debt should
not have arisen); or
(b)
the application of legislation in cases where repayment would be
inequitable in the circumstances, or cause severe ongoing financial hardship.[25]
3.19
There is no time limit within which an application for waiver of a debt under
the FMA Act must be lodged and there is no financial ceiling on the amount
which may be waived.[26]
As is the case with act of grace payments, if a proposed waiver is likely to
involve more than $250,000, the Finance Minister must request and consider a
report from an advisory committee before he can authorise waiver of the debt.[27]
3.20
The Department advised the committee that, in both 2008‑09 and
2009‑10, debts totalling approximately $3 million were waived under the
FMA Act.[28]
Debts waived between 2000 and 2010 are set out in the table below:
Table 2. Waiver of debt payments[29]
3.21
The Department also outlined that a number of agencies have limited
waiver powers 'which relate to specific and easily definable circumstances of
limited complexity and predominantly involving routine administration, under
specific legislation'. These include:
-
the Income Tax Assessment Act 1936 gives the Commissioner of
Taxation limited powers to remit personal income tax debts, certain other
associated debts and General Interest Charges;
-
the Social Security Act 1991 gives a limited power to waive a
debt if the money had been received in good faith, if the money was paid
because of an administrative error, if the debt had existed for a period longer
than six weeks and if the person is in financial hardship; and
- the Child Support (Registration and Collection) Act 1988 gives
the CSA a limited power to remit late payment penalties.[30]
3.22
In its submission, the Department of Families, Housing, Community
Services and Indigenous Affairs (FaHCSIA) advised that the administration of
debts incurred under social security law and family assistance law is
undertaken by Centrelink on behalf of the secretaries of FaHCSIA and the
Department of Education, Employment and Workplace Relations. These may include situations
where:
- debts may be written-off temporarily for periods of time to allow
for customer circumstance to improve prior to debt recovery, or where it is not
cost effective for the Commonwealth to recover the debt;
- debts may be waived where they are attributable solely to an
administrative error made by the Commonwealth and the debtor received the
payment(s) in good faith; and
- debts may be waived under special circumstances.[31]
3.23
The Australian Capital Territory and the Northern Territory have
equivalent statutory provisions to subsection 34(1) of the FMA Act which enable
the treasurer to waive the repayment of debts.[32]
The statutory provisions in Queensland, Victoria, Tasmania and Western
Australia refer only to the power to write off debts or losses and not the
power to waive repayment.[33]
In New South Wales and South Australia, the treasurer has issued instructions
in relation to the exercise of the executive power to waive a debt.[34]
Criticism of debt waiver schemes
3.24
The committee received evidence during the course of its inquiry that
raised concerns about debt waiver schemes. For example, the Welfare Rights
Centre viewed the current debt waiver provisions in social security legislation
as 'unbalanced and unfair' and, in some cases, leading to 'perverse and
unintended onerous outcomes'. It suggested that there had been a tightening of
social security legislative provisions, noting that while in the past 'not all
overpayments were actually recoverable debts, now regardless of the cause
almost all are recoverable debts'.[35]
It also highlighted a number of specific waiver of debt provisions which
related to situations where Centrelink was the sole or primary cause of a debt
or where a person owes a debt 'but they are in that position due to domestic
violence or acting under duress, usually from an ex-partner'.[36]
3.25
The Welfare Rights Centre proposed a number of legislative amendments to
the Social Security Act 1991 (SSA) and the Family Assistance
(Administration) Act 1999 to improve the position of welfare recipients in
relation to debt waiver. These amendments included removing the word 'solely'
from section 1237A of the SSA, which currently requires a person to prove that
their debt was 'solely' caused by administrative error in order to have it
waived. The Welfare Rights Centre argued that this provision means that Centrelink
can be 99 per cent responsible for a debt but it will not be waived because of
a one per cent contributory error of the relevant individual. Similarly, the
Welfare Rights Centre proposed an amendment to section 1237AAD of the SSA to
make allowance for situations where women have been pressured by an abusive
partner to claim a social security payment as a single person or not to declare
the correct amounts of their earnings.[37]
3.26
The Welfare Rights Centre also suggested that such an 'unbalanced'
position between Centrelink and its clients could encourage poor public
administration. Ms Jackie Finlay stated at the public hearing in Sydney:
It seems to us that the risks in receiving payments are borne
totally by social security recipients and there is very little risk to
Centrelink. Due to the way the legislative provisions are drafted and have been
tightened over the years, there is essentially little incentive for Centrelink
officers or Centrelink in general to get a decision right and to prevent debts,
because ultimately, if someone owes Centrelink money, most of the time they are
going to have to pay it back...[38]
3.27
Connecting Home also raised the issue of the visibility of existing debt
waiver schemes:
...a cursory desktop review of some government websites
revealed a lack of information [on] debt waiving schemes. Some members of the
Aboriginal community, for a range of reasons, experience falling into debt with
some government departments such as Centrelink and the ATO for example. Often
people will attempt to avoid addressing debt, which only exacerbates their
situation. This is largely because there is little information about the way
government departments can negotiate with the debtor in relation to the amount
outstanding.[39]
3.28
FaHCSIA was of the view 'that the current debt waiver provisions provide
an appropriate balance between recovering amounts that exceed a person's
entitlement and avoiding onerous outcomes for customers'.[40]
It advised:
At the beginning of the financial year 2009-10, there were
approximately 485,000 debts relating to customers in receipt of FaHCSIA
payments. Approximately 975,000 new debts were raised and the balance, at the
end of the year, had dropped to approximately 439,000. Of these debts,
approximately 40 per cent overall were for amounts of less than $50 and were
automatically waived.[41]
3.29
However, FaHCSIA also noted that the National Welfare Rights Network
(which includes the Welfare Rights Centre as a member) had provided the Hon.
Jenny Macklin MP, the Minister for Families, Housing, Community Services and
Indigenous Affairs, with a report entitled Redressing the Balance of Risk
and Responsibility Through Active Debt Prevention Strategies. Further,
FaHCSIA intends to provide the Minister with advice on 'waiver of debt'
provisions. In relation to the specific amendments proposed by the Welfare
Rights Centre, FaHCSIA provided short responses outlining the purpose of each
section, noting some of these provisions are 'of long standing'.[42]
Compensation for Detriment caused by Defective Administration
3.30
The Scheme for Compensation for Detriment caused by Defective Administration
(the CDDA scheme) is a Commonwealth administrative scheme which was introduced
in 1995. Under the scheme, each Minister (or officers authorised by a Minister)
has a discretionary authority to compensate individuals or other bodies who
have suffered detriment due to the 'defective' actions or inactions by an
agency within the relevant Minister's portfolio.[43]
3.31
'Defective administration' refers to actions by an agency official such
as:
(a)
a specific and unreasonable lapse in complying with existing
administrative procedures;
(b)
an unreasonable failure to institute appropriate administrative
procedures;
(c)
an unreasonable failure to give proper advice within an official's power
and knowledge to give; or
(d)
the provision of advice that was, in all the circumstances, incorrect or
ambiguous.[44]
3.32
The 'detriment' to the applicant can relate to a personal injury, an
economic loss or damage to property that results from the defective
administration.[45]
In general terms, the principles applied in assessing the loss to the applicant
are equivalent to those which would be applied in assessing damages for the
tort of negligence. For example, the loss must have been directly caused by the
defective administration and it must have been a reasonably foreseeable
consequence of the defective administration.[46]
The Department of Finance and Deregulation has advised that offers of
compensation under the CDDA scheme:
...should be calculated on the basis of what is fair and
reasonable in the circumstances and in consideration of the fact that the
Commonwealth should not take advantage of its relative position of strength in
an effort to minimise payment.
The overarching principle to be used in determining the level
of compensation is to restore the applicant to the position he or she would
have been in had defective administration not occurred.[47]
3.33
The CDDA scheme applies where the claimant has no legal or statutory
right to compensation but there is a moral obligation to provide compensation.[48]
The power to make payments under the CDDA scheme arises from the Commonwealth's
executive power under section 61 of the Constitution.[49]
There is no time limit within which an application under the scheme must be
lodged and no financial ceiling on the amount of compensation which may be paid
under the scheme. The scheme only applies to FMA Act agencies, and not to Commonwealth
Authorities and Corporations Act 1997 (CAC Act) agencies such as Comcare.[50]
A list of agencies and organisations which operate under the FMA Act and the CAC
Act is provided at Appendix 2 to this report.
3.34
The Commonwealth Ombudsman's factsheet on the CDDA scheme states that common
examples of circumstances in which CDDA payments are made include where:
(a)
a person incurs expenses or loses eligibility for a benefit because of
incorrect agency advice;
(b)
a penalty or debt is wrongly imposed;
(c)
personal property is damaged or documents are lost by an agency; or
(d)
a computer error results in a delayed payment or unreasonable delay in
approving an application.[51]
3.35
For example, FaHCSIA outlined that, for social security matters, a CDDA
claim would normally originate from Centrelink customers, but that Centrelink
is also able to instigate own motion payments. Centrelink receives direct
funding appropriations for paying compensation claims.[52]
In 2008–09, Centrelink made 738 payments totalling $3.15 million under the CDDA
scheme. In comparison, the Australian Taxation Office made 250 payments
totalling $550,000.[53]
Role of the Commonwealth Ombudsman
3.36
An applicant for compensation under the CDDA scheme may complain to the Commonwealth
Ombudsman if the application is refused, or if the applicant rejects an offer
as insufficient or subject to unreasonable conditions. The Ombudsman may
investigate and, if the Ombudsman considers it appropriate to do so, may
propose that the decision of the agency be changed. The Ombudsman does not have
the power to overturn or vary the agency's original decision.[54]
3.37
It is also possible for an applicant who is refused an act of grace
payment or waiver of a debt to complain to the Ombudsman.[55]
However, in the case of decisions under the CDDA scheme, because it is an
executive scheme rather than a statutory one, a complaint to the Ombudsman is
effectively the only recourse the public has for external review of a decision
under the scheme.[56]
3.38
The Ombudsman's office deals with about 200 complaints annually that specifically
raise CDDA issues.[57]
In 2009, the Ombudsman conducted an own motion investigation of the CDDA
scheme. The findings of that investigation are set out in the Putting Things
Right report. Those findings included that there was a need for:
(a)
greater visibility of the scheme;
(b)
better assistance to claimants in accessing the scheme and making a
claim; and
(c)
less defensive and legalistic approaches to CDDA decision‑making
by agencies.[58]
3.39
In evidence to the current inquiry, the Department of Finance and Deregulation
noted a number of actions that have been undertaken in response to the Putting
things right report recommendations.[59]
These include:
The Finance circular entitled Discretionary compensation
and waiver of debt mechanisms was reissued in November 2009 to bring
greater focus to the requirements of administrative law and to align the
commentary on CDDA with lessons learnt from departments and agencies.
Finance established an interagency forum on discretionary
compensation mechanisms to share information on best practice in order to
encourage a consistent whole-of-government approach to approaching and managing
claims...
[A]pplication forms for discretionary assistance are
available on the finance website, along with information about the
discretionary mechanisms themselves. Australian government agencies can link to
[the] finance website for those forms if they wish...
[F]inance has encouraged departments and agencies to provide
claimants with a copy of the papers which will be taken into account in making
a decision...
In terms of increased visibility of the CDDA scheme, the...ombudsman
has published an information sheet that supplements the finance circular and
the Attorney-General's Department's administrative justice framework refers to
the discretionary compensation mechanisms.[60]
Issues with the CDDA scheme
3.40
Several submissions raised specific issues about the CDDA scheme. In
particular, the Acting Commonwealth Ombudsman suggested that two limitations on
the CDDA scheme require further consideration and reform. The first limitation is
that the CDDA applies only to agencies that come under the FMA Act, and not to
CAC Act agencies such as Comcare. The Acting Ombudsman noted that:
The office has investigated a number of complaints where a
person claims they have suffered a financial loss due to defective
administration by a Commonwealth entity [subject to the CAC Act], but is unable
to have their claim considered because the entity does not fall under the FMA
Act.[61]
3.41
Furthermore, the Commonwealth Ombudsman noted:
From the point of view of individuals who suffer loss or
damage, it seems to us to be largely irrelevant about the nature of the legal
instrument by which the agency was established. If the nature of the loss or
damage is quantifiable then, under that moral principle, people should be
equally entitled to recover.[62]
3.42
A representative from the Department of Finance and Deregulation told
the committee that some Commonwealth company bodies have arrangements for
dealing with claims, while others do not, depending on their particular
governance arrangements.[63]
Another representative from the Department noted that, while it is relatively
easy to apply a consistent approach to Commonwealth agencies covered by the FMA
Act, those covered by the CAC Act can have specific legislation that govern the
way they operate, making it more difficult to apply a consistent approach.[64]
Bodies under the CAC Act can make arrangements for compensation to the extent
their enabling legislation allows.[65]
In the specific case of Comcare:
The Department of Education, Employment and Workplace
Relations (DEEWR) and Comcare are currently developing a scheme similar to the
Scheme for Compensation for Detriment caused by Defective Administration within
the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) to
enable payment of compensation when the administration of bodies under the SRC
Act have been defective.[66]
3.43
The second limitation raised by the Acting Ombudsman relates to the
application of the scheme where a government agency contracts out the provision
of services. Compensation under the CDDA scheme is not available where the
defective administration relates to actions or omissions of a non-agency person
such as a contracted service provider.[67]
The Acting Ombudsman pointed out that this may mean that:
...the Australian Government agency has effectively
contracted out of its accountability for matters that it would otherwise be
responsible to deliver. It also creates an inequitable situation as clients of
those service providers currently do not have any obvious means of having their
claims of defective administration addressed in a consistent manner.[68]
3.44
The Acting Ombudsman also reiterated the findings of the Putting
things right report in relation to the need to increase the visibility of
the CDDA scheme, provide better assistance to CDDA claimants, and for agencies to
adopt a less defensive and legalistic approach to CDDA decision-making.[69]
An organisation which has improved its response to claims for compensation is
the Child Support Agency:
That response included some reforms around a specific hotline
in relation to compensation—not just CDDA but other forms of
compensation—having a dedicated team and actually putting more resources into
their staffing of compensation. They put a whole lot of information online,
making sure that people had greater access to claim forms as well as
information about the schemes. They took into account the issues that we had
around procedural fairness deficiencies and actually put procedural fairness
into their instructions and their team processes. They took into account the
concerns we had about administrative drift, and they acknowledge each claim
within 48 hours and have put in a 90-day ceiling...Importantly, too, they are trying
to utilise the CDDA or compensation claims to improve their systems, so part of
the process has a feedback loop back into business improvement.[70]
3.45
The submission from Connecting Home supported the view that there is a
need to raise the profile of the CDDA scheme:
[I]t is not unreasonable to assume that information on this
kind of redress is not commonly known throughout the Australian community, let
alone in communities that experience poor literacy levels. It can be safely
assumed that there is scant awareness of the CDDA scheme in the community.[71]
3.46
The Women's Legal Service NSW raised several concerns about the CDDA
scheme. These concerns were based on an unsuccessful application for
compensation under the scheme, lodged on behalf of a client with the Australian
Federal Police and the Child Support Agency. The concerns include:
(a)
that 'detriment' is defined too narrowly under the scheme and that the
threshold for demonstrating economic loss is very high;
(b)
the difficulties applicants face where the defective administration
involves more than one agency, as each agency may assume the other is
responsible; and
(c)
the time taken to process an application under the scheme.[72]
3.47
Echoing the Acting Ombudsman's concerns about agencies adopting an
overly defensive and legalistic approach to CDDA decision-making, the Women's Legal
Service NSW noted that:
We suspect that the costs of 'defending' our client's claim
were probably disproportionate to any possible compensation award as both
agencies hired leading commercial law firms to represent them. This is not in
the spirit of the 'moral' as opposed to 'legal' obligation that is central to
CDDA.[73]
3.48
A specific recommendation from the Commonwealth Ombudsman's report Putting
things right, was that the Australian Government consider the merits of
establishing an interdepartmental advisory or review panel to deal with
disputed or exceptional CDDA claims. The committee notes that this
recommendation has not been implemented, however the Department of Finance and
Deregulation indicated that a review panel was under consideration by the interagency
forum on discretionary compensation mechanisms.[74]
3.49
The Department also identified a number of advantages and disadvantages
in the establishment of an interdepartmental review panel for the CDDA scheme.
The advantages include that the proposed panel: would supplement the
Commonwealth Ombudsman's oversight of the CDDA scheme; provide a right of
review; and provide an opportunity for a second opinion. The disadvantages
identified include that the proposed panel: would be a duplication of the
Commonwealth Ombudsman's role; does not reflect that the CDDA is permissive and
operates to remedy situations where there is no legal obligation; and would
require increased funding for secretariat functions and associated
administrative costs.[75]
3.50
Finally, the Department suggested that consideration be given to
requiring that claims of $250,000 or more under the CDDA scheme be referred to
an advisory committee. That committee would be similar to the advisory committee
required (under the FMA Act) to report on applications for act of grace
payments or waiver of debts of $250,000 or more.[76]
Committee view
Waiver of debt schemes
3.51
The committee acknowledges the concerns raised during the inquiry
regarding the operation of 'waiver of debt' provisions within current social
security legislation. The committee considers that it is important that persons
who receive welfare payments obtain appropriate amounts and that overpayments
are recoverable as debts. However, the recovery of debts from persons who
receive welfare payments where Commonwealth agencies are predominantly at
fault, or where debts have been caused by the duress of another person, can
clearly create unfair and unjust outcomes.
Recommendation 6
3.52
The committee recommends that the Australian Government review 'waiver
of debt' provisions contained in social security legislation and consider
amendments to that legislation where current provisions could cause unfair and
unjust outcomes for welfare recipients.
Compensation for Detriment caused
by Defective Administration scheme
3.53
The committee acknowledges the actions of the Department of Finance and
Deregulation in responding to many of the recommendations of the Commonwealth
Ombudsman's report into the CDDA scheme, Putting things right. The
committee considers that the CDDA scheme provides a useful mechanism for
addressing harm caused by defective administration; however, from the evidence
received, it appears that the CDDA scheme has not 'kept pace' with changes in
Commonwealth public administration.[77]
In particular, the application of the CDDA scheme to FMA Act agencies only
appears to create anomalous outcomes. If a person suffers loss or damage due to
defective administration they should be entitled to appropriate restitution,
regardless of whether the loss or damage was caused by a FMA Act agency, a CAC
Act body or a third party contracted to provide a Commonwealth service.
Recommendation 7
3.54
The committee recommends that the Department of Finance and Deregulation
investigate the extension, in appropriate circumstances, of the Compensation
for Detriment caused by Defective Administration scheme to Commonwealth
Authorities and Corporations Act 1997 agencies and to third party providers
performing functions or providing services on behalf of the Commonwealth.
Senator Guy Barnett
Chair
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