Australian Government employees have a duty of care to the public when performing their duties. This extends to any advice given and any actions performed.
Explanation: See the majority of the Judicial Committee in Mutual Life & Citizens' Assurance Co. Ltd. v Evatt (1970) 122 CLR 628, (1971) AC 793.
A breach of duty of care can result from negligent advice and/or a negligent action.
Payment under Regulation 9 of the FMAA can ONLY be made if the Department or Centrelink has breached its duty to exercise reasonable care.
Regulation 9 of the FMAA is NOT a way around the normal limitations in the SSAct on the payment of arrears.
There are not many negligent actions that result in a common law duty of care and therefore a possibility of settlement under Regulation 9 of the FMAA, because the majority of negligent actions under the Act are decisions that are subject to a right of review.
Example: A determination is made to grant Age but because of a breakdown in normal procedures, the decision is not put into effect for several months. As a result, a PCC is issued late and medical expenses are paid without concession.
Policy reference: SS Guide 1.3.5 Liability of Decision Makers
A case may arise if negligence occurred in the Department but either the person or a third party also contributed to the negligence. In such a case, a partial payment could be made to compensate for that part of the loss that resulted from the Department's negligence.
Under the Taxation Laws Amendment Act 1988, measures were introduced to allow a rebate on arrears of income for previous financial years. The rebate applies retrospectively to payments made on or after 1 July 1986 and includes social security payments (section 23(1)-'social security benefit'). If a person seeks compensation for a loss in these circumstances, they should first be referred to the ATO for clarification of entitlement to this rebate. It may be that after application of the rebate, no economic loss exists.
If the taxation rebate does not apply, or does NOT relieve the person of the additional taxation liability in full, the claim should be considered under Regulation 9 of the FMAA. If it can be accepted that the taxation liability in question arose from departmental negligence, then the claim may be settled under that direction. If no negligence occurred, the matter may still be considered under the Compensation for Detriment Caused by Defective Administration (CDDA) Scheme.
Act reference: SSAct section 23(1)-'social security benefit'
Financial Management and Accountability Act 1997, refer to Regulation 9
Policy reference: SS Guide 1.3.2 Defective Administration
Last reviewed: 27 January 1999