4.3.6 Payments to a Third Party

Summary

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

Payment nominees

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 4.1.3.10 Payment Nominees

Last reviewed: 1 July 2016