The Act of Grace Payment

An act of grace payment is usually considered to be one of the last resorts when it comes to claiming financial support from the Australian government. Effectively, an act of grace payment is an unspecified form of payment that can be given out under a set of special and undefined circumstance, to anyone that the government thinks is applicable. What this means is that if you are finding that your DVA claims are being consistently denied, but you still believe that you are entitled to some form of financial support that you are yet to receive, then applying for an act of grace payment would be your last, and most likely, only option.

How Do Act of Grace Payments Work?

The Australian Government can make an act of grace payment if the decision maker considers it is appropriate because of special circumstances. In order to get your claim in front of a decision maker you have to fill out an application on the federal government’s finance website, and then wait to see if your application is approved or denied. Whether your application will be approved or denied can never be said for certain as the act of grace payment has no legislation that dictates its distribution. Instead the Act of Grace payment given out on a case-by-case basis.

Who Can Apply for an Act of Grace Payment?

An individual, partnership or organisation can request consideration of an act of grace payment if they believe that they are entitled to financial support. If you wish to apply for an act of grace payment on the behalf of another individual, partnership or organisation you are able to, provided they have authorised you to do so.

Who Accepts and Denies Act of Grace Payments?

Officially, the finance minister holds the power to authorise an act of grace payment. However, this power has been delegated to officials within the Finance department of the government. This means that your application for an act of grace payment will most likely be looked over by a caseworker for the department, and their decision will be approved by a higher up.

What Happens After I Request an Act Of Grace Payment?

Once you have applied for an act of grace payment, the department of finance will decide whether to consider your application or ask you to reapply. If you submit an application and Finance does not consider it is appropriate for them to consider your application, they will contact you and explain why. However, if your application is considered appropriate to consider, then finance will aim to make a decision on the basis of the information you have submitted.

In order to fully access your application Finance may ask all relevant Commonwealth entities to provide a submission on your application, in order to access your suitability for an act of grace payment. Once the entities provide Finance with a submission relating to your application, you will have the opportunity to comment on any adverse information or inference. Once this is complete, the department will then follow the procedural fairness principles outlined in RMG 401 in order to assess whether your application has been successful in earning an act of Grace Payment. If your request for is not approved, you will be provided with a statement of reasons for that decision, and you could be allowed to reapply.

How Long Does This Take?

While Finance will aim to process your application in a timely manner, gathering all the relevant information can be a lengthy process. This means that there is no set time limit for making a decision on an application. Decisions will generally take longer if they relate to complex and/or sensitive matters or if correspondence is by physical post alone.

If My Act of Grace Payment Succeeds, Will My Tax Be Impacted?

Luckily, the act of grace payment will not impact your tax, thanks to a piece of legislation known as the Douglas decision. The Douglas decision was a Federal Court decision that determined that certain veteran invalidity benefits should be taxed differently. One such veteran invalidity benefit is the act of grace payment. This legislation is put in place to ensure that veterans and their former partners don’t receive additional tax because of an increased net worth, brought about by government financial support.