Claiming compensation from Centrelink

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

It is important to note that Centrelink does not discriminate against customers who claim compensation.

Types of compensation

Centrelink may pay compensation where it is likely to be found liable to pay compensation (such as for negligence) if the matter went to a court.

If Centrelink considers it is not legally liable to pay compensation, it will then consider paying compensation under the Scheme of Compensation for Detriment caused by Defective Administration (CDDA).

Legal liability

For your claim to be successful, Centrelink must be satisfied that:

• a duty of care was required by Centrelink
• Centrelink failed to comply with that duty of care
• you suffered a loss or detriment caused by that failure, and
• Centrelink could reasonably have expected you would suffer the loss or detriment as a result of the failure.

Appendix C of the Legal Services Directions 2005 issued by the Commonwealth Attorney-General is the guide to settling legal liability claims.

Defective administration

For your claim under the CDDA scheme to be successful, Centrelink needs to be satisfied that:

• there was defective administration by Centrelink
• you suffered a loss or detriment caused by the defective administration, and
• Centrelink could reasonably have expected you would suffer the loss or detriment as a result of the failure.

The CDDA Scheme guidelines define 'defective administration' by Centrelink as:

• an unreasonable failure to comply with its procedures
• an unreasonable failure to institute appropriate procedures
• an unreasonable failure to give proper advice, or
• giving incorrect or ambiguous advice.

The guidelines for assessing claims under the CDDA Scheme are in Finance Circular No 2009/09 issued by the Department of Finance and Deregulation.

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Types of loss

You may be paid compensation for loss or injury such as:

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

Other information

Before your claim for compensation is considered, your case may be reviewed under the relevant law by a Centrelink Authorised Review Officer and the Social Security Appeals Tribunal. If you want a review, you should contact Centrelink or the tribunal as soon as possible as time limits may apply. Refer to Reviews and Appeals for further details.

Compensation is generally not payable for a debt you owe to Centrelink. You can, however, ask Centrelink to consider waiving the debt. That will mean that you do not have to repay it.

If you were wrongly advised that you were entitled to a Centrelink payment, and it later turns out that you were not entitled, this usually cannot be compensated.

If you have not taken reasonable action to avoid or limit your loss, Centrelink may decide that compensation is not payable or may reduce the amount offered to you.

If you have a complaint about Centrelink we want to hear from you even if compensation is not appropriate. Refer to Complaints for further details.

Making a claim

You can claim compensation by contacting Centrelink in writing, by lodging a claim, by visiting a Centrelink office, or by phoning 1800 995 496.

Customer Compensation Team
DHS Corporate Law Branch
Reply Paid 941
Brisbane QLD 4001

Centrelink will send an acknowledgement letter within 7 days of receiving a claim. The letter will provide the name and direct contact details of the case manager handling the claim.

Centrelink aims to resolve claims within 90 days but this will not always be possible.

The case manager will, where possible, talk to you by phone to discuss your claim.

You will be notified in writing of the outcome of your claim.

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Receiving a payment

When compensation is paid, Centrelink may ask you to sign a settlement deed. The deed releases and indemnifies Centrelink from any future claim arising from the same actions.

Payment will be made by electronic funds transfer to your bank account.

You can seek advice from the Australian Taxation Office or your tax agent about the taxation implications of a compensation payment.

Act of Grace

An Act of Grace payment may be paid to people who have been unintentionally disadvantaged by the effects of Australian Government legislation, actions or omissions.

A claim can be submitted to Centrelink, direct to the Minister for Finance and Deregulation, or to the Department of Finance and Deregulation.

The Department of Finance and Deregulation decides claims for Act of Grace payments under guidelines. For more information, refer to Act of Grace on the Department of Finance and Deregulation website.

Other options

You can, but do not have to, seek advice about claiming compensation or an Act of Grace payment. Free advice and assistance may be obtained from Welfare Rights Centres and Legal Aid Services.

If you are dissatisfied with the decision or the way Centrelink has handled your claim, you can contact the case manager directly to discuss.

Also, or alternatively, you can complain to the Commonwealth Ombudsman. The Ombudsman will consider whether the decision was fair and reasonable in the circumstances. You can call the Ombudsman's office on 1300 362 072 for the cost of a local call anywhere in Australia.

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