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Public Service Amendment (Payments in Special Circumstances) Bill 2011
Explanatory Memorandum
Senator Xenophon
Background
In March 2010, the Commonwealth Ombudsman handed down a report into discretionary payments
of compensation by Comcare and the Department of Finance and Deregulation.
The report summarises two investigations conducted by the Ombudsman into the actions of
Comcare, and in one case the Department of Finance and Deregulation. In both cases, errors were
made by Comcare in calculating workers compensation payments, which resulted in underpayments
that were not discovered for ten years (in the case of Ms A) and thirteen years (in the case of Mr B).
This was despite Mr B approaching Comcare with concerns about his payments many years earlier.
Once Comcare had detected the errors, it paid each of the complainants the amounts they should
have originally received. However, these amounts did not include interest (in Mr B's case, estimates
to be in excess of $233,750) or compensation for the fact that they had been deprived of the benefit
of the money for many years.
The Ombudsman concluded that the complainants were entitled to compensation. Ms A has since
received compensation from Comcare; however, Mr B's case is far more complex and full
compensation has still not been paid.
However, the Ombudsman's investigation found that neither Comcare nor the Department of
Finance and Deregulation have any direct mechanism to deal with claims relating to the actions of
Comcare.
Mr B was invited to make a claim for Compensation for Detriment caused by Defective
Administration (CDDA). However, the CDDA Scheme only applies to agencies under the Financial
Management and Accountability Act 1997. Comcare falls under the Commonwealth Authorities and
Companies Act 1997, and so is not covered by the CDDA Scheme. Organisations falling under the
Commonwealth Authorities and Companies Act 1997 do not have an equivalent scheme.
This leaves the only avenue for compensation through section 73 of the Public Service Act 1999,
which includes a subsection allowing an agency to make a discretionary payment of up to $100,000
in special circumstances.
Given that this is the only option for people who have been disadvantaged by defective
administration within agencies such as Comcare, it is appropriate that a payment limit not apply.
This is especially true given that it is estimated Mr B is owed in excess of $233,750 in interest
(excluding any compensatory amount) , and has no other way of seeking what he is owed.
The removal of this limit will allow future claimants a fair avenue of compensation until an
equivalent to the CDDA Scheme can be put in place for agencies falling outside the Financial
Management and Accountability Act.
1. Short Title
This clause is a formal provision and specifies the short title of Bill, once enacted, as the Public
Service Amendment (Payments in Special Circumstances) Bill 2011.
2. Commencement
This clause provides for the Act the day after this Act receives Royal Assent.
3. Schedules
This clause states that each Act specified in a Schedule to this Act is amended or repealed according
to the provisions of this Act, according to its terms.
4. Schedule 1
Repeals subsection 73(4) from the Public Service Act 1999 so that there is no limit for Special
Circumstances Payments.