Claims against the department

Last updated:

7 December 2022

Commonwealth Discretionary Scheme Overview

Flowchart showing the process of how claims against the Department of Veterans' Affairs are handled, with further detail in the accompanying text description.

Text description of the Commonwealth Discretionary Scheme Overview

Claim received:

Claim received from member of public. Following legal advice regarding alleged liability, the claim will progress to one of the three paths:
1. No legal liability but defective administration
  - Compensation for detriment caused by Defective Administration (CDDA Scheme)
2. No legal liability but there are special circumstances
  - The Act of Grace Scheme
3. Department could be found liable
  - Litigation or settlement under Legal Services Directions
Claim received from a Public Service Act employee. Following legal advice regarding whether insurance coverage is available, the claim will progress to one of the two paths:
1. Manage in accordance with insurance instructions
2. Claim not covered by insurance
  - Litigation or settlement under Legal Services Directions
  - Section 73 of the Public Service Act 1999
  - Section 15 of the Public Governance, Performance and Accountability Act 2013

Claiming compensation from the department

If you think the department has made a mistake that has caused you a financial loss or some other detriment, you may be able to make a claim for compensation from the department.

Overview of compensation claims

Monetary compensation may be payable by the department or the Commonwealth for loss suffered in respect of the following four types of claims:

Compensation for legal liability
Compensation for detriment caused by defective administration (CDDA scheme)
Special circumstances arising out of Commonwealth administration (Act of Grace)
Section 73 payments under the Public Service Act 1999 (Cth) – in respect of Commonwealth employees.

Compensation for legal liability

The department may assess your claim and pay compensation in accordance with the Attorney General's Legal Services Directions, where there is a risk that the department could be found to be liable to pay compensation if the matter went to court.

Examples

Negligence, actions in contract, personal injury and property damage.

Important

We recommend that you seek legal advice if you think that your circumstances might give rise to a claim that raises issues of potential legal liability.

Compensation for Detriment caused by Defective Administration (CDDA)

The CDDA scheme allows the department to compensate you if you have suffered a loss due to the department's defective administration and where no legal liability exists. Payments made under the CDDA scheme are discretionary and may be made where it is considered that there is a moral obligation, rather than a legal liability.

Compensation is not payable for grief, anxiety, hurt, humiliation, embarrassment, or disappointment that is unrelated to personal injury, no matter how intense the emotion may be.

In order for your claim to be successful under the CDDA scheme, you need to establish that:

the department's administration was defective, for example because of an administrative error or oversight
you suffered a loss or detriment, or were prevented from avoiding detriment, as a direct result of the defective administration, and
the department could reasonably have expected you would suffer the loss or detriment you experienced as result of the defective administration.

Defective administration is defined as:

a specific and unreasonable failure to comply with existing procedures that would normally have applied to the applicant's circumstances, or
an unreasonable failure to institute appropriate procedures to cover a claimant's circumstances, or
an unreasonable failure to give proper advice that was within an official's power and knowledge (or was reasonably capable of being obtained by the official), or
giving advice that was, in all the circumstances, incorrect or ambiguous.

The overarching principle of the CDDA scheme is to restore you to the position you would have been in had the defective administration not occurred.

For further information on the CDDA scheme, see the FAQs.

Act of Grace payments

The Act of Grace Scheme is administered by the Department of Finance (Finance). If the Finance Minister or delegate considers it appropriate to do so because of special circumstances, he or she may authorise the making an Act of Grace payment. Act of Grace claims are considered on their individual merits. Act of Grace payments are discretionary and may be made where there is a moral, rather than legal liability and there is no other redress available, including where:

the direct role of an agent/agency of the department has caused an unintended and inequitable result for the individual or entity concerned, or
the application of the department's legislation has produced a result that is unintended, anomalous, inequitable or otherwise unacceptable in a particular case (including in cases where the department has acted correctly in administrating the legislation involved), or
the matter is not covered by legislation or specific policy, but the department intends to introduce such legislation or policy, and it is considered desirable in a particular case to apply the benefits of the relevant provisions prospectively.

Payments in special circumstances under section 73 of the Public Service Act 1999 (Cth)

Section 73 of the Public Service Act 1999 allows the Public Service Minister to authorise the making of payments to a person in special circumstances that relate to, or arise out of:

the payee's employment by the Commonwealth, or
another person's employment by the Commonwealth.

See more information about payments in special circumstances

Applying for compensation

If your claim is under the CDDA scheme, you should complete the CDDA application form.

See: Application Claim Form for Compensation for Detriment caused by Defective Administration

If your claim is for an Act of Grace payment you should complete the Act of Grace application form.

See: Application Form for an Act of Grace payment to be lodged with the Department of Finance

In some circumstances, the department, or the Commonwealth Ombudsman may invite you to apply for compensation under either the CDDA scheme or the Act of Grace scheme.

Note

An invitation to apply for compensation does not constitute an admission of liability, nor does it guarantee that compensation will be paid.

Contact

You can send the completed application form and supporting documentation, preferably, by email or (only if not able/possible to email) by post to:

Email: cdda [at] dva.gov.au

Department of Veterans' Affairs
ATTN: Director, Litigation & Discretionary Claims
GPO Box 9998
Brisbane QLD 4001

Receiving a decision

You will be notified in writing of the outcome of your claim. The following details the steps to be taken if your application for compensation is successful, and the steps to be taken if your application is rejected.

If compensation is payable, the department will provide you a Deed of Release and Indemnity (deed) to sign. The deed indemnifies the department from any future claims arising from the same factual circumstances. Payment will be made by electronic funds transfer into your nominated bank account.
If compensation is not payable (application has been fully or partially rejected) and you are dissatisfied with the outcome, your options are to seek legal advice, or to contact the Commonwealth Ombudsman and seek independent review of your case.

Further assistance

For further information on guidelines for processing legal liability claims refer to Appendix C of the Legal Service Directions 2017 issued by the Commonwealth Attorney-General.

See: Legal Services Directions

For further information on the CDDA or Act of Grace schemes see the Department of Finance:

Defective administration and other claims against the department

Frequently asked questions

Q1. What is the CDDA scheme?

The CDDA scheme is designed to compensate persons who have experienced detriment as a result of defective actions or inaction of a department. It is a scheme that gives DVA the discretion to compensate a claimant in appropriate cases.

You can read more about the CDDA scheme by viewing Resource Management Guide No. 409.

Q2. Who can apply for compensation under the CDDA scheme?

Any person, company or other organisation can apply for compensation, either for themselves or for a third party who has given authorisation.

Q3. The CDDA scheme is a "scheme of last resort". What does this mean?

This means that if other avenues to sort out or fix your issue exist, you need to look into those alternatives first. For example, if you have review rights in relation to a DVA delegate's decision, and a review is capable of providing a remedy, you need to apply for a review of that delegate's decision first. There may be other ways of addressing the problem and that includes having a discussion if you are not sure. If you are not sure, call 1800 VETERAN (1800 838 372) for assistance.

Q4. Is there a cap on how much can be paid under the CDDA scheme?

There are no caps on what can be paid to a claimant.

Q5. What do I need to show to have a successful claim under the CDDA scheme?

For your claim under the CDDA scheme to be successful, you need to establish that:

our administration was defective, for example because of an administrative error or oversight
you suffered a loss or detriment, or were prevented from avoiding detriment, as a direct result of the defective administration, and
we could reasonably have expected you would suffer the loss or detriment you experienced as a result of the defective administration.

Q6. How is "defective administration" defined in the CDDA scheme guidelines?

The CDDA scheme guidelines define "defective administration" as:

a specific and unreasonable failure to comply with existing procedures that would normally have applied to the applicant's circumstances
an unreasonable failure to institute appropriate procedures to cover a claimant's circumstances
an unreasonable failure to give proper advice that was within an official's power and knowledge (or was reasonably capable of being obtained by the official), or
giving advice that was, in all the circumstances, incorrect or ambiguous.

Q7. What amounts are not compensable under the CDDA scheme?

You can not be compensated for the following amounts:

costs incurred as a result of engaging financial, legal or other professional services to assist you in preparing your claim
incidental costs you incur in preparing a claim including, but not limited to, travel costs, telephone call, stationery, photocopying, postage or courier services, and
components for interest.

Q8. What do I need to include in my claim form?

You need to provide all the information to support your claim that you can. This may include receipts, record of correspondence from DVA etc – see the CDDA claim form. The more information you can provide, the easier it may be to determine your claim.

Q9. Who decides my CDDA application?

The General Counsel of DVA is the authorised decision-maker for approving a claim in an amount not exceeding $50,000 under the CDDA scheme. The Secretary of DVA is the authorised decision-maker for approving a claim in an amount not exceeding $100,000 under the CDDA scheme. If the claim is over $100,000, the Minister for Veterans' Affairs is the decision-maker.

Q10. How long will it take to process my CDDA claim?

Upon receipt of your CDDA claim and an initial assessment to ensure that it fits within the CDDA scheme, a case manager will be allocated to handle your matter. The case manager will acknowledge receipt of your claim, may request further information from you, and will provide you with an opportunity to comment before a final recommendation is made to decision-maker.

The length of time it will take to process your claim will depend on the complexity of your case. While some claims are straightforward and can be completed within a month or two, the majority require a comprehensive investigation in order to fully assess the merits and make a recommendation to the decision-maker. These investigations take time to complete. It is not uncommon for CDDA investigations to take 6 months or longer to reach the stage where a recommendation can be made. Where appropriate, you will be kept informed of the progress of your CDDA claim.

Q11. Will my claim be treated confidentially?

In accordance with the principles of the Privacy Act 1988, all aspects of an investigation are treated as confidential. This is to ensure appropriate protection of your privacy.

Q12. I was told that I would get an entitlement but later told that I wasn't eligible in the first place. Can I be compensated under the scheme?

If you were wrongly advised that you were entitled to a payment and it later turns out that you were not entitled, this usually cannot be compensated. You might be compensated if you relied on the incorrect advice and you incurred losses that would not have been incurred if you had not acted in reliance on that advice.

Q13. I have suffered a loss. Is there anything I need to do?

Yes, you will need to take reasonable steps to mitigate (avoid or limit) your loss. If you have not done so, we may decide that compensation is not payable or we may decide to reduce the amount offered to you.

Q14. What types of loss can be compensated under the scheme?

You may be paid compensation for loss or injury such as, but not limited to:

missed pensions, benefits and allowances
bank fees and other costs incurred as a result of our mistake, and
a diagnosed psychiatric injury directly caused by a mistake made by us.

Q15. What can't I use the scheme for?

You can't use the scheme for claims:

that have already been decided under the Act of Grace scheme
that have already been decided under the CDDA scheme or another mechanism
to offset any recoverable debt owed to DVA even though the debt was the result of the defective administration
where you have a valid legal claim against DVA
to overcome specific legislative rules that are found to be flawed. Those cases are dealt with by changing the law to benefit claimants (if appropriate) or by referring the claim to Finance under the Act of Grace scheme
where you will be supplementing or topping-up a payment or entitlement under DVA legislation. For example, you receive a valid pension entitlement that is lawfully capped at a fixed rate and you wish to receive a higher rate. Another example, is compensation for psychiatric injury that is covered by treatment under your Gold Card.

Q16. Can I ask the Department of Veterans' Affairs (DVA) to decide my claim if it relates to something done by the Department of Defence when it was responsible for military compensation matters?

A department cannot approve a claim for compensation on any matter that relates to defective administration of functions of another department – for example, Department of Defence. If there is a dispute between the relevant departments about who should handle the claim, the Department of Finance will decide who will deal with the claim.

Q17. How will I be notified of the outcome of my claim under the scheme?

All decisions are notified to claimants in writing.

Q18. If I am being offered compensation under the scheme, do I need to sign anything before getting my money?

Yes you do. You will need to sign an original Deed of Release and Indemnity before any payment of compensation can be made to you under the CDDA scheme. DVA will not pay you the offered compensation unless you sign and return the Deed of Release to DVA.

Q19. Can you top up my compensation to cover-off any tax I have to pay because I received compensation under the CDDA scheme?

It is the claimant's responsibility to manage their tax liability. If you need advice, please contact the Australian Taxation Office or an independent financial advisor. Generally, compensation is only paid on a pre-tax gross basis where, for example, you are receiving compensation for the gross income amount because of loss of earnings that was directly caused by defective administration.

Q20. If the claimant has died and compensation is payable, how does the money get accepted and paid?

The executor of the will, subject to their authority, may accept the offer into the estate of the deceased subject to the execution of a Deed of Release and Indemnity. You may wish to seek independent advice on the implications on the estate.

Q21. Can I get judicial review of the CDDA decision?

Decisions under the scheme are not made under an enactment or law so cannot be reviewed under the Administrative Decisions (Judicial Review) Act 1977. However, the decision may be subject to judicial review under section 75 of the Australian Constitution or section 39B(1) of the Judiciary Act 1903. It is open to you to seek legal advice if you wish to pursue judicial review.

Q22. I am not happy with the outcome of my claim. What can I do?

The Commonwealth Ombudsman is the appropriate channel to investigate complaints about scheme decisions. The Commonwealth Ombudsman has no power to overturn an agency's decision but may make recommendations to the agency. See Ombudsman for more information.

Note: you cannot use the Act of Grace scheme to review your dissatisfaction with the outcome.

Where a claim has been declined under the CDDA scheme, but contains an element that can only be considered under an application for an Act of Grace payment, the fact that the CDDA claim has been declined does not prevent the application for an Act of Grace payment being made. An example of this is where the applicant believes they have been disadvantaged by the effect of Australian Government legislation and the Government intends to change that legislation to avoid that effect in the future.

Q23. What is an Act of Grace payment?

An Act of Grace payment may be paid to a person if the decision maker considers there are special circumstances and it is appropriate. This could include when a person has been unintentionally disadvantaged by the effects of Australian Government legislation, actions or omissions. The Department of Finance decides claims for Act of Grace payments.

Q24. Can I just lodge an Act of Grace claim with Finance instead of a CDDA claim with DVA?

If you are claiming that DVA's defective administration has caused you to suffer a loss, you should submit a claim under the scheme. The act of grace mechanism is not used for defective administration claims.

If you are not claiming DVA's administration was defective, you are not required to have a CDDA scheme decision to make a request for an act of grace payment.