4.3.6 Payments to a Third Party
In certain circumstances, payments of FTB, CCR and CCB can be paid to a third party on behalf of the individual. As some individuals are vulnerable to exploitation, this should be done in a way that does not conflict with the intention of the inalienability provisions of the FA(Admin)Act. It is considered that the inalienability rule will not be infringed if the individual accepts a nominee under these arrangements. Processes should, as far as possible, put individuals in control of their own finances.
Note: Inalienability is not infringed by the Secretary appointing a nominee on behalf of an individual. Under the nominee provisions in the FA law, the consent of an individual is not required.
In practice, a person who is eligible for FTB is unlikely to be in a situation where payment should be directed to a third party. If a third party arrangement is needed, it is likely that the person is unable to provide enough care for a child to meet the FTB child eligibility requirements and so careful consideration should be given before making these arrangements.
Act reference: FA(Admin)Act section 66 Protection of payments under this Part, section 66(2) Subsection (1) has effect subject to…
Policy reference: FA Guide 4.1.2 Protection of Payment
Circumstances where payment can be made to another person or party
Payment to another person or party should only occur if:
- there is a group payment arrangement (that is an agency arrangement such as Centrepay), or
- a payment nominee has been appointed, or
- the individual is incapable of managing their financial affairs and there is a formal guardianship arrangement (including court appointed arrangements).
Act reference: FA(Admin)Act section 219TB Appointment of payment nominee
An individual who wants their payments, including advance payments, to go to another person on an ongoing basis has the option of proposing a payment nominee. However, a nominee must be appointed by the Secretary. In determining to appoint a payment nominee, consideration should be given to the circumstances of the individual and other avenues of payments to a third party to ensure that a nominee arrangement is the correct arrangement for the individual. The nominee must consent to being a nominee and the Secretary must consider the principal's wishes before making the appointment. The principal does not have to consent or agree to the appointment.
Policy reference: FA Guide 220.127.116.11 Payment Nominees