An Act of Grace payment is money the Australian Government can choose to pay when special circumstances make it appropriate, even though the law doesn't require it to pay. The power sits in section 65 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). Nobody is entitled to one, and the Department of Finance generally treats it as a last resort after other remedies have been tried.
The law behind Act of Grace payments
Section 65 lets the Finance Minister, on behalf of the Commonwealth, authorise in writing one or more payments to a person if the Minister considers it appropriate because of special circumstances. A payment can be made even though no other law authorises it and there is no legal liability to pay.
- The money comes from funds appropriated by Parliament, usually from the budget of the Commonwealth agency connected with the matter.
- Conditions can be attached. If you break a condition, the Commonwealth can recover the payment as a debt through the courts.
- The Finance Minister has delegated the power to senior officials in the Department of Finance.
Individuals, partnerships and organisations can ask. Someone else can apply for you if you give them written authority, such as a power of attorney.
Read the Department of Finance Act of Grace information
What counts as special circumstances
The PGPA Act doesn't define special circumstances or say what is appropriate. That is left to the decision maker. Finance gives these examples of situations where a payment may be appropriate:
- an action, or failure to act, by a non-corporate Commonwealth entity such as DVA has caused an unintended and inequitable result for you
- Commonwealth legislation or policy has had an unintended, anomalous, inequitable or otherwise unacceptable effect on you
- the matter isn't covered by legislation or policy yet, but the government intends to introduce it, and it makes sense to apply it to you early.
For the legislation or policy example, Finance's guidance for agencies (RMG 401) adds that your circumstances should be specific to you, outside your control, and consistent with the broad intention of the law. It also says Act of Grace can be considered where a contracted provider working for the Commonwealth caused you a loss, because the CDDA Scheme doesn't cover contractors.
You need to explain why your situation is special. Your personal circumstances, especially how the government's action affected you, can be relevant. Act of Grace is not meant to address financial hardship. Finance suggests contacting Centrelink if that is the main problem.
When a payment is unlikely
Finance and RMG 401 say an Act of Grace payment is unlikely, or generally not available, where:
- the problem was caused by a state or territory government, a private organisation, or a corporate Commonwealth entity or company
- another remedy is still open, such as internal review, a tribunal, the CDDA Scheme or a legal claim
- you are claiming a decision was wrong at law, which belongs in a legal review
- the payment would top up an amount that other legislation deliberately caps
- the payment would compensate you for a debt you owe the Commonwealth, or for a loss caused by a court decision
- the payment would in effect create a scheme for a group rather than a decision on your own merits
- the only argument is that someone in your position today would be eligible for a benefit you couldn't get at the time, or that you lost eligibility because the rules changed.
Finance also says Act of Grace is not used to review claims already refused under the CDDA Scheme.
How a decision is made
- You send Finance the Act of Grace application form by email to [email protected] or by post. If Finance doesn't think it is appropriate to consider your request, it will contact you and explain why.
- Finance usually asks each Commonwealth agency involved for a written submission. The agency is expected to reply within four weeks, covering things like other remedies open to you, the law involved, what the agency did and whether it supports your request.
- The agency must send you a full copy of its submission at the same time it sends it to Finance. You generally get four weeks to respond to Finance, including any adverse information.
- If a payment of more than $500,000 is proposed, the Finance Minister must first consider a report from an advisory committee.
- The decision maker decides your request on its merits. The decision doesn't set a precedent for anyone else. If it is refused, you get a statement of reasons.
There is no time limit for making a decision. Finance says collecting information can take a long time, and complex or sensitive matters, or those handled only by post, generally take longer.
Read Finance's guidance on discretionary financial assistance (RMG 401)
How it differs from other Commonwealth remedies
Act of Grace, waiver of debt and the Scheme for Compensation for Detriment caused by Defective Administration (CDDA) are all discretionary, but they answer different problems. A CDDA claim is about a loss caused by an agency's mistake, and you make it to that agency. A waiver of debt asks the Commonwealth to give up its right to recover money you owe, under section 63 of the PGPA Act. Act of Grace is a payment to you under section 65. Check whether Act of Grace is the right route for your situation.
If your request is refused
You have three options.
- Ask Finance to reconsider in writing. Finance generally agrees only if the decision maker made a serious error about the facts, or you have relevant and significant new evidence that wasn't considered. A different decision maker handles it.
- Ask the Commonwealth Ombudsman to investigate how Finance handled your application. It is free, but the Ombudsman can't change the decision or investigate a decision a Minister made personally. It can recommend that Finance look at the matter again.
- Apply to a federal court for judicial review under the Administrative Decisions (Judicial Review) Act 1977. The court looks at errors of law or procedural unfairness, not the merits, and can't order a payment. Time limits and fees apply, and you may have to pay costs if you lose. Finance recommends getting independent legal advice first.
For questions about an application, contact Finance's Discretionary Payments Section on 1800 227 572 or [email protected].