5.4.1.40 Payment Methods for Advance Payments - Benefits & Pensions

Direct credit & manual payment

Generally, advance payments are paid by direct credit of the whole amount as an immediate payment, but recipients have the option of payment by instalments.

Manual payments should only be approved if the recipient has an immediate need for the money and any delay in accessing funds would severely disadvantage the recipient.

Example: A recipient cannot have repairs made to a refrigerator unless the money is paid immediately.

Act reference: SSAct section 1061EJ Payment into bank account etc.

Payment by instalments

Recipients are limited to 2 instalments only. There is no minimum instalment amount. The recipient must nominate the instalment amounts and the date they require the second instalment to be automatically paid. The second instalment must be paid within 6 months of the first. When a recipient elects to have instalments, the recovery rate is still calculated on the full amount to be advanced.

Act reference: SSAct section 1061EB(3)(b) Payment of advance payment

Payments to nominees (1.1.N.80)

If a nominee arrangement is in place, an advance payment can be paid to a recipient nominee by direct credit.

If the application is made by the recipient but NOT the nominee, payment can ONLY be made into an account administered by the nominee on behalf of the recipient. Where there is a State/Territory Court, Tribunal, Guardianship or Administration Order in place, the relevant State/Territory authority MUST be contacted prior to processing the application to ensure the advance payment is in the recipient's best interests.

Act reference: SSAct section 1061EI Advance payment to be paid to person or nominee

Policy reference: SS Guide 8.4.1.30 Payments to a Third Party

Centrelink payment summaries & advance payments

Statements of payment and PAYG payment summaries issued to recipients show total gross taxable income paid to the recipient in the financial year, net of recovered amounts of advance payments.

Example: John is in receipt of a part rate Age and received an advance of $275.00 in May 2009. His 2008-09 financial year Centrelink payment summary records the total gross taxable amount of all Age payments paid in the 2008-09 financial year. This includes the May 2009 $275 advance payment. It also includes subsequent fortnightly payments made in 2008-09 - these were reduced by repayment of the advance. Similarly, the 2009-10 payment summary will include gross taxable Age payments paid, net of recovered advance amounts.

Act reference: SSAct section 23(1)-'taxable income'

Policy reference: SS Guide 5.3.1.10 Taxation of Payments & PAYG Payment Summary - Individual Non-Business

Last reviewed: 4 January 2016