Applying for compensation
To apply for compensation, complete Applying for compensation (NAT 1169, PDF, 273KB). Attach all relevant documentation to support your claim.
Send your claim to the address at the end of the form.
Assessing a claim
We assess claims for compensation in two ways:
- compensation for legal liability (for example, negligence)
- compensation under the Scheme for Compensation for Detriment caused by Defective Administration (CDDA Scheme).
Claims are considered by officers in the ATO's General Counsel. Decision makers are independent of the area of the ATO who previously dealt with your matter.
The operation of the CDDA Scheme, including the criteria used by decision makers, is set out in the Department of Finance's Resource Management Guide 409External Link.
If compensation is not payable in either circumstance, you can apply for an act of grace payment. The Department of Finance administers Act of grace payments, not the ATO.
Losses you can't claim
Generally, claims for the following types of losses can't be considered under claims of legal liability or the CDDA Scheme:
- claims for personal time spent resolving an issue
- claims for stress, anxiety, inconvenience
- claims for delay in receiving funds from the ATO where statutory interest was paid
- claims for costs associated with complying with the tax system including costs associated with audits, objections and appeals – even where it is found you complied with your obligations
- costs of putting in a claim or conducting a claim for compensation
- claims for taxation or other Commonwealth liabilities with substantive review rights that can be or could have been pursued.
Losses we can consider for compensation
Types of compensation we can consider are financial losses with a direct connection to our actions that lead to a finding of legal liability or defective administration, such as:
- professional fees, where evidence of payment is provided and the fees are considered by the decision maker to be reasonable (our assessment of what is reasonable may differ from yours)
- interest for delays in providing funds in cases where no statutory interest has been paid
- bank or other administrative fees you incurred because of our actions.
We aim to acknowledge receipt of your compensation claim in writing within seven business days of receiving it.
Once you provide all necessary information in support of your claim, we aim to process your claim within 56 days.
Some complex claims may take longer to investigate and consider. In these cases, we will contact you to negotiate an extended reply date.
If you did not provide us with all the information we need to make a decision on your claim, we will contact you to tell you what information we need. We will provide au timeframe for the conclusion of your claim.
We will not consider your claim until your original issue (that led to your claim) is resolved. If you are involved in other dispute resolution processes, including court or tribunal action, these need to be resolved before we consider your claim.
If your claim is successful, we transfer payment electronically into your nominated bank account.
If you're unsure whether the payment is taxable, you can seek advice from a tax professional. You can also contact us, or ask us for formal written advice (for example, a private ruling).
Reviewing the decision
We offer internal review of compensation decisions in limited circumstances where you can provide new information. There is no statutory or administrative requirement for this. It is an informal mechanism to provide a convenient means of double-checking the merits of original decisions.
From 1 May 2015, the tax complaint-handling role transferred from the Commonwealth Ombudsman to the Inspector-General of Taxation (IGT). This enhances the systemic review role of the IGT and provides taxpayers with more specialised and focussed tax complaints handling for tax matters.
The IGT can investigate most tax administration complaints, including the handling of compensation claims. You can contact the IGT by visiting Inspector-General of Taxation.gov.auExternal Link or by phoning 1300 44 88 29.
Compensation from the ATO
Act of grace payments
Information on how to apply for compensation and how claims will be assessed.Last modified: 31 Aug 2016QC 17735