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Compensation for Defective Administration scheme

Howdy all,

I saw mention for the Compensation for Defective Administration scheme with the CSA. Can someone explain what it is, how it works and under what kind or circumstances it can be used for? Thanks!
Hopefully this will be of some use:-

The CSA Guide - 6.11.1: Compensation said
Defective administration

The Commonwealth has a scheme called 'Compensation for detriment caused by defective administration' (sometimes called the CDDA scheme) that was established in 1995. It provides an alternative method of compensating customers who have been adversely affected by the administration of Commonwealth agencies where no legal liability exists. A legal liability is only likely to arise in the most serious of cases.

The scheme is administrative only. It is not regulated by legislation. The criteria and limitations for paying compensation under the scheme are set out in the Department of Finance and Deregulation Finance Circular 2009/09.

Compensation for defective administration may be paid where CSA:

    * unreasonably failed to follow appropriate procedures;
    * unreasonably failed to institute appropriate procedures in the first place;
    * gave incorrect or ambiguous advice; or
    * unreasonably failed to give advice that should have been given.

The scheme:

    * does not apply where there is a legal liability; and
    * cannot be used to offset debts owed to the Commonwealth.

The Secretary of the Department of Human Services or an authorised officer can make a decision to pay an amount for defective administration. The decision maker does not have to approve a payment, but the decision to approve or refuse a payment must be publicly defensible.

Act of grace payments

An act of grace payment is a special 'gift' of money from the Commonwealth which may be made where there is no other right of redress available, but there remains some moral obligation on the Commonwealth to satisfy the claimant.

Act of grace payments are extremely rare. One of the principles in establishing the defective administration scheme was to ensure that an act of grace payment was not sought simply as another method of compensation where no legal liability existed. The criteria for act of grace payments are set out in the Department of Finance and Deregulation Finance Circular 2009/09.

Circumstances where an act of grace payment may be appropriate are where:

    * the application of the legislation produces unintended, anomalous, inequitable, unjust or otherwise unacceptable results in particular circumstances;
    * the matter is not covered by legislation but it is intended to introduce such legislation and it is considered desirable in the particular case to apply the benefits of the proposed legislation retrospectively by act of grace; or
    * the particular circumstances of the case lead to the conclusion that there is a moral obligation on the Commonwealth to make a payment.

The Minister for Finance and authorised officials of the Department of Finance (DoFA) can approve act of grace payments (section 33, Financial Management and Accountability Act 1997). CSA can only make proposals in relation to act of grace payments.

How to make a claim

If a customer believes that they are entitled to compensation they need to state in writing:

    * what happened;
    * why they believe CSA's actions caused them to suffer a loss; and
    * what that loss was i.e. where possible quantify the loss and give evidence such as receipts, invoices or medical reports.

A claim is managed and investigated by a Compensation Officer. The Compensation Officer is a point of liaison with a customer whilst a claim is being considered.

Each claim will be evaluated and decided on its merits by authorised officers. CSA will use Commonwealth policies and guidelines to make the decision. The customer will be given reasons for the decision.

CSA aims to advise customers of the outcome of their claim within 90 days of receiving the claim. The Compensation Officer will advise the customer if this timeframe cannot be met.

Settlement of claims

CSA can only spend public monies in the ways specified by the Financial Management and Accountability Act 1997 and Regulations. Regulation 9 requires any expenditure to be in accordance with Commonwealth policy. The policy for payment of legal claims is set out in the Commonwealth Policy for Handling Monetary Claims. The principles for deciding and settling claims are set out in Attachment A of the policy The Commonwealth as a model litigant.

The factors that must be taken into account are:

    * the likelihood of success of the claim in court;
    * costs of defending the claim; and
    * any other prejudice in defending the claim.

The Attorney Generals Legal Service Directions require the CSA to obtain external legal advice if the CSA intends to pay a significant sum in settlement of a claim.

Full and final settlement can only be made on the basis of a deed of release indemnifying the Commonwealth against owing any further liability for that particular matter.

In settling claims for defective administration the Commonwealth should not take advantage of its relative position of strength. The decision making process and the decision have to be transparent. Claimants should be advised of adequate details of any offer. They should not be required to waive all of their rights if a partial settlement offer is made and they should be advised that the Ombudsman can review the decision.

P.S. here's a link to a fact sheet from the Ombudsman Fact Sheet

Commonwealth Obudsman - Fact sheet 9 - Compensation for detriment caused by defective administration February 2010

Last edit: by MikeT

I've been thinking about this with regard to an SSAT appeal. The answer is still outstanding, but there's a chance it will go against me. I can't see anything that means that I shouldn't be able to claim defective administration if the SSAT change the decision in any way. Surely the  fact that the decision was changed means that my expenses were warranted? Has anyone done this?
Yes, been there and done it and have been paid out by C$A. You can claim all expenses incurred or losses such as the loss of leave entitlement taken from work to attend a hearing, having court transcripts produced, travel expenses etc… The process takes about a year and you have to prompt C$A all the time to update you on the status of the claim like most other things.
Fairgo said
You can claim all expenses incurred or losses such as the loss of leave entitlement taken from work to attend a hearing, having court transcripts produced, travel expenses etc…

Fairgo, Can you claim the cost of your time to prepare for the tribunal hearing, eg. loss of leave entitlement for preparation?

A person who can't pay gets another person who can't pay to guarantee that he can pay. Like a person with two wooden legs getting another person with two wooden legs to guarantee that he has got two natural legs. It don't make either of them able to do a walking-match. Charles Dickens
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