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

Last updated: 11 Dec 2015

This page is: current

This page provides advice to Australian Public Service (APS) agencies on the provisions of section 73 of the Public Service Act 1999 (PS Act) and Public Service Regulation 9.4 in relation to the making of special payments.

Legislative provisions

Section 73 of the PS Act 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.

This power has been delegated to APS Agency Heads. Agency Heads must exercise this power personally. It cannot  be sub-delegated.

Under the terms of section 73 of the PS Act and Regulation 9.4:

  • An agency head cannot authorise payments totalling more than $250,000.
  • Payments may be made in one or more specific amounts, or by way of periodical payments. Payments may be authorised even if they would not be otherwise authorised by law or required to meet a legal liability.
  • Conditions can be attached to any payment. The payment may be able to be recovered by the Commonwealth if a condition is breached. Legal advice should be sought if agencies propose to attach conditions.
  • Payments must be made from an agency's annual appropriation. Generally a payment can be debited against an agency's annual appropriation, providing that it relates to some matter that has arisen in the course of its administration.

The provisions set out in section 73 of the PS Act are broadly similar to those contained in section 65 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) which makes provision for act of grace payments. General advice on discretionary compensation payments, including act of grace payments and waiver of debt mechanisms, is available on the Department of Finance's website.

What to consider before making a section 73 payment

Section 73 payments should only be used in limited circumstances. The Agency Head will need to consider the circumstances of each case.

In deciding whether to make a section 73 payment, the Agency Head should consider the following:

  • A section 73 payment might be made where the particular circumstances of a case lead to the publicly defensible conclusion that there is a moral obligation on the Commonwealth to make the payment.
  • Payments under section 73 would not generally be appropriate in order to establish a scheme of payments to shore up programme or legislative deficiencies.
  • Care must be taken to consider the precedent effect of authorising a payment, i.e. whether the payment might be regarded as extending beyond what might reasonably be considered to be 'special circumstances'.
  • Section 15(1) of the PGPA Act requires the proper use and management of Commonwealth resources. 'Proper use' is defined in section 8 of the PGPA Act as the efficient, effective, economical and ethical use of public resources.

As with the exercise of all powers under the PS Act, an Agency Head will need to have regard to the PS Act framework, in particular the APS Values and APS Employment Principles, in deciding whether to authorise a section 73 payment.

If a claim in relation to Commonwealth employment is made on the basis of a legal liability, agencies should consider whether it is more appropriate for the claim to be considered under the Commonwealth policy on settling claims against the Commonwealth—see Appendix C of the Attorney-General's Legal Service Directions.

If legal proceedings, including potential legal proceedings, are instituted against an employee for a work-related incident, it would normally be appropriate for a request for assistance for legal expenses to be considered under the relevant Commonwealth policy which is set out in Appendix E of the Attorney-General's Legal Services Directions.

In circumstances where detriment has been caused by the defective administration of a Commonwealth agency, other than claims connected with APS employment, payments under the Scheme for Compensation for Detriment caused by Defective Administration (CDDA Scheme) may be more appropriate. The CDDA Scheme is administered by the Department of Finance.

Section 73 not to be used in redundancy situations

The Workplace Bargaining Policy 2015 requires that all APS workplace arrangements are to include compulsory redeployment, reduction and retrenchment provisions, without enhancing existing redundancy arrangements other than where required by legislation, or in exceptional circumstances with the approval of the Public Service Minister.

The use of a section 73 payment to 'top up' a redundancy benefit, or a payment made under section 37 of the PS Act to a Senior Executive Service employee, would be inconsistent with the Workplace Bargaining Policy.