11.1.4.10 Payment nominees under income management

Part 3B payment nominees

A payment nominee, for the purposes of income management, is a person who, or an organisation which, has been nominated to receive payments on behalf of another person (the 'principal'), appointed under:

  • SS(Admin)Act section 123B
  • FA(Admin)Act section 219TB
  • VEA section 58D (a DVA agent), and
  • VEA section 202 (a DVA trustee), or
  • SS(Admin)Act section 45(1) (a YA nominee).

For more information on the role of payment nominees see 8.5.1, and for more information on the requirements of nominees see 8.5.3.

Note: People receiving ABSTUDY do not have access to nominee arrangements as defined by social security law.

Act reference: SS(Admin)Act Part 3B Income management regime, section 123TC Definitions, section 123B Appointment of payment nominee, section 45(1) Payment of youth allowance-person under 18 and not independent

Specific situations

There are multiple scenarios that may arise concerning payment nominees and income management, the resolution of which will depend upon:

  • whether the principal or the payment nominee (or both) are subject to income management, and
  • the income management measure that applies to the principal and/or the payment nominee.

If both payment nominee and principal are on income management, the payment nominee will manage the principal's income managed funds and the principal's discretionary funds.

When a nominee arrangement results in a person being placed on or removed off an income managed measure, the delegate should consider the appropriateness of the nominee arrangement and whether the arrangement is being used to avoid income management (11.1.4.30).

A payment nominee who is not being income managed is an excluded Part 3B payment nominee, as defined in SS(Admin)Act section 123TC. This means any principal of that nominee can neither be subject to income management nor choose VIM (11.1.4.20).

However, if the payment nominee is not an excluded Part 3B payment nominee (for example if the payment nominee is subject to income management) then the principal may be subject to income management if they meet all other relevant conditions or can choose VIM.

Note: If a person is income managed and nominates a payment nominee who is not income managed (and the nomination arrangement is accepted by Centrelink) the person will no longer be eligible for income management. In deciding whether or not to accept the nominee arrangement, the delegate must ensure that the nominee arrangement is not being used to avoid income management (11.1.4.30).

Note: Where a person would not be subject to a measure of income management except for the fact they have a payment nominee, and the person chooses to end the nominee arrangements to cease income management, this will not be considered to be using the nominee provisions to avoid income management.

Example: Lea is Raoul's niece. Lea is placed on the Disengaged Youth Measure of income management, as she meets the eligibility criteria. Raoul agrees to be Lea's payment nominee so he can assist her to manage her finances. The delegate is satisfied with the appropriateness of the nominee arrangement and so makes Raoul Lea's payment nominee. Raoul is not income managed, so Lea will cease being income managed once the nominee arrangement comes into effect.

A few months later both parties have become dissatisfied with the nominee arrangement and Lea elects to end it. Lea still meets the criteria for the Disengaged Youth Measure so she becomes subject to income management.

Act reference: SS(Admin)Act Part 3B Income management regime, section 123B Appointment of payment nominee, section 123TC-'excluded Part 3B payment nominee'

FA(Admin)Act section 219TB Appointment of payment nominee

Child Protection, Parenting & Participation & Cape York Measures

If a payment nominee is placed on the:

  • Child Protection Measure
  • Parenting and Participation Measure (Disengaged Youth or Long-term Welfare Payment Recipient Measures), or
  • Cape York Income Management Measure

then the principal will be placed on the same measure, unless the principal qualifies for income management in his/her own right.

Similarly, if a person is on the:

  • Child Protection Measure
  • Parenting and Participation Measure, or
  • Cape York Measure

of income management and then becomes a payment nominee for another person (the principal), then the principal will be placed on the same measure, unless the principal already qualifies for a measure in his/her own right.

Principals who are income managed under these measures are not required to meet the relevant legislative criteria (e.g. in receipt of a trigger payment) as income management is applied as a result of their payment nominee relationship. Principals who are income managed under the Parenting and Participation (Disengaged Youth or Long-term Welfare Payment Recipient) Measures are not eligible to apply for an exemption.

Example 1: Jenny and Mara are friends. Jenny is Mara's long-time payment nominee, as Mara is disabled and has difficulty travelling around the community. Neither has been income managed. Subsequently Jenny is placed on the Cape York Income Management Measure and so Mara is also placed on the Cape York Income Management Measure.

Example 2: Judy has been Phil's payment nominee for several years, as Phil has difficultly interacting with banks. Judy becomes eligible for the Long-term Welfare Payment Recipient Measure of income management, and she does not seek an exemption. She is placed on the Long-term Welfare Payment Recipient Measure of income management.

As her principal, Phil is also placed on the Long-term Welfare Payment Recipient Measure. Phil has a philosophical objection to income management and does not want his payments income managed. He contacts Centrelink and cancels the nominee arrangement.

Example 3: Frank is John's payment nominee. Both Frank and John have chosen VIM. Subsequently Frank becomes eligible for the Long-term Welfare Payment Recipient Measure of income management, and does not seek an exemption. He is placed on the Long-term Welfare Payment Recipient Measure of income management.

As John is already on VIM, he is able to remain on VIM. Should he decide to cancel his VIM, but Frank still be subject to the Long-term Welfare Payment Recipient Measure of income management, then John would then also be subject to the Long-term Welfare Payment Recipient Measure of income management, unless he chose to cancel the nominee arrangement.

Example 4: Peter is Sue's partner and has been her payment nominee for several years. Peter is placed on Long-term Welfare Payment Recipient Measure. Sue is only in receipt of FTB payments. As Peter is Sue's payment nominee, Sue's FTB payments will be income managed under the Long-term Welfare Payment Recipient Measure even though she is not in receipt of an income support payment.

Vulnerable & voluntary measures

If a payment nominee is placed on the VWPR Measure of income management or elects to participate in VIM, the principal may be placed on any income management measure they are eligible for, including VIM.

If a payment nominee is placed on the VWPR Measure of income management or chooses VIM and the principal is not eligible for an income management measure and does not elect to enter VIM, the principal will not be placed on an income management measure.

When determining whether a person is a VWPR for the purpose of income management the Centrelink social worker will examine a person's circumstances, including any nominee arrangements. It would be inappropriate for a principal to be automatically placed on income management if their nominee is placed on income management, as this will form part of the social worker's consideration of the nominee and principal's situation.

Example 1: Lucy is a Long-term Welfare Payment Recipient Measure recipient and her payment nominee, Dennis, was granted an exemption from the Long-term Welfare Payment Recipient Measure income management due to his meeting minimum participation requirements. Lucy has not previously been subject to income management as she had an excluded payment nominee (Dennis). Should Dennis decide to enter into a VIM agreement or his exemption expires, he is no longer an excluded Part 3B payment nominee and Lucy would become subject to the Long-term Welfare Payment Recipient Measure of income management.

Example 2: Carol has been her great uncle Marcus' payment nominee for 6 months. Carol was on the Long-term Welfare Payment Recipient Measure of income management, which meant Marcus was also placed on the Long-term Welfare Payment Measure. Recently Carol has applied for and successfully achieved an exemption from the Long-term Welfare Payment Recipient Measure of income management, and Carol decides to commence a VIM agreement. Marcus does not automatically become subject to income management, but he can choose to enter VIM.

Entering a nominee arrangement when both parties are already on income management

Where both nominee and principal are already on income management, entering a nominee arrangement does not affect the income management measure each is on. However, circumstances may change if either the nominee or the principal cease being income managed. Particularly:

  • If the principal was to cease being on income management in his/her own right and the payment nominee was on the Child Protection Measure, Parenting Participation Measure or Cape York Measure, then the principal would go onto the same measure.
  • If the principal was to cease being on income management in his/her own right and the payment nominee was on the VWPR Measure or VIM then the principal would have the option of participating in VIM.
  • If the payment nominee was to cease being on income management then the principal would also cease being income managed, as he/she would have an excluded Part 3B payment nominee (11.1.4.20).

If a nominee changes between income management measures, this will not affect the measure of the principal.

Example: Friends, Lance and Paul, are on VIM. Paul is having difficulty managing his finances, so he nominates Lance as his payment nominee. After agreeing allocations with Centrelink, Lance allows his BasicsCard to be issued to Paul. Lance also manages Paul's discretionary funds. Both remain on the VIM. Subsequently Lance becomes eligible for the Child Protection Measure. Lance is placed on the Child Protection Measure, but since Paul is already on VIM he will remain on the VIM Measure. If Paul exited VIM, he would be placed on the Child Protection Measure of income management.

BasicsCard arrangement for nominees

If a person is on an income management measure and has a payment nominee, the BasicsCard for that person may be issued to either the payment nominee in the name of the nominee, or to the person with the consent of the payment nominee. The payment nominee will also arrange the amount on the principal's BasicsCard with Centrelink.

A nominee may hold multiple BasicsCards, one for their own account and one for each of their principals. In this situation all cards would be in the designated nominee's name. A principal's BasicsCard would indicate that the cardholder is the payment nominee for the principal.

Only one card may be issued for a person's income management account.

Act reference: SS(Admin)Act section 123YF Stored value cards-Part 3B payment nominee

Last reviewed: 9 November 2020