Finance Department deals with angry former public servants upset over superannuation

The Department of Finance's Comcover scheme has received insurance claims from almost 1000 public servants who say they have been misled into not joining lucrative Commonwealth super funds. 

Finance Department executives told an estimates hearing on Thursday that $15.6 million had been paid to several dozen retired bureaucrats under "Cornwell claims" in recent years.

There have been 966 claims in total with about 200 continuing and about 700 declined or dealt with cheaply outside the court system.

The claims are named after John Cornwell, who won a High Court case after he was incorrectly advised he was not eligible for Commonwealth superannuation. 

The hearing was told the average cost of settlements was $168,167.


Assistant secretary at the department Robert Antich suggested many of the claims were rejected because they assumed the Commonwealth had to inform them about superannuation, which was not the case under the Cornwell ruling.  

"If they sought advice and were given wrong advice then it becomes a live issue," Mr Antich said. 

"Some of those live claims are prospective on [the fact] there's not going to be a claim until those people retire."

Under Cornwell, the claims cannot crystalise until retirement. 

Six cases had been launched in the ACT Supreme Court, two of which were continuing, and $1.956 million had been spent on legal costs.

Mr Antich said the benefit of these legal battles was in clarifying certain points of law that would affect hundreds of other cases. 

In December Wayne Meredith won a $840,000 payout in the Supreme Court, believed to be the most significant claim yet in financial terms. 

Senator Nick Xenophon, who has called for an independent tribunal to speed up the processing of claims, asked if they were being fast-tracked.

"The department's view is that it is running a fast-track process," said Mr Antich, who added two legal firms had been engaged to deal with the claims.  

"If you were to go down the proposal of a tribunal, I don't think you'd be saving time and you'd be spending more money.

"Each claim has to be determined on the evidence.

"Our process is quickly dealing with those [using] lawyers that are very familiar with the concepts."

Superannuated Commonwealth Officers' Association president John Coleman said the volume of claims was a warning to the federal government. 

"You would hope that public service departments have learnt a lesson from the Cornwell case about the advice they give to people," Mr Coleman said.

The department has also received 155 applications for "act of grace" payments from people who say the Commonwealth has caused them a loss.

Mr Antich said about 120 of these were declined and two had been approved.  

"An act of grace is entirely discretionary and it's when all other avenues in relation to a payment from the Commonwealth have been exhausted," he said.

The time to process these could be lengthy.  

"If you get a claim and they allege certain things have happened in the past, we'll have to engage with the department [and] the claimant and it could take months." 

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