8.4.1.10 Regular Direct Credit Payments

Legislative basis for direct credit

The SS(Admin)Act requires that, unless otherwise directed by the Secretary, all payments be made into a person's account at a:

  • bank, OR
  • credit union, OR
  • building society.

A person MUST supply their account details. The person MUST maintain the account, either solely, or jointly with another person or organisation.

Explanation: There are a number of advantages of direct credit, including:

  • funds are deposited electronically on the due date,
  • funds are available early on the due date through ATMs and EFTPOS anywhere,
  • a person usually does not pay financial institution charges on direct credit payments.

Act reference: SS(Admin)Act section 55(2) and section 55(4) Payment into bank account

Exemptions from payment by direct credit

The Secretary has the discretion to grant an exemption to persons who reside long term overseas in countries where direct deposit facilities are not available. They are paid in accordance with a direction made under SS(Admin)Act subsection 55(4).

If a person's circumstances change, the reasons for direct credit exemption may need to be reconsidered.

Act reference: SS(Admin)Act section 55(4) Payment into bank account

Time frame for granting an exemption

If a person does not provide bank account details on their claim form, their grant letter will request the person to provide bank account details within 28 days from the day the request is made.

If the person has not provided bank account details by the end of the 28 day period, the payment will not be payable to the person. The payment may then be suspended by the Secretary from the end of the 28 day period.

If, after the person's payment is suspended, the person provides the required bank account details WITHIN the 13 week period, the payment will again become payable to the person from the first day after the end of the 28 day period (assuming that no other provision of the social security law operates to make the payment not payable to the person). This effectively means that the person will not be penalised in this situation.

If, after the person's payment is suspended, the person provides the required bank account details AFTER the 13-week period, the payment will again become payable to the person from the day on which the details are provided (assuming that no other provision of the social security law operates to make the payment not payable to the person). However, if the person's payment has already been cancelled, a new claim will be required. Depending on when the person lodges that claim and which start day provision is applicable, the new claim may commence as early as the date the details are provided.

Explanation: When details are provided after 13 weeks, the original claim should be cancelled and a new claim required. The provision of bank account details can be taken as a contact in relation to that claim. This means that provided the new claim is lodged within 14 days (or 13 weeks if there is a continuous medical condition or other special circumstances) its start day will be the date the details are provided. This is the earliest day on which the payment may recommence because this is the first day that the payment has again become payable to the person.

Act reference: SS(Admin)Act section 55 Payment into bank account, section 80 Cancellation or suspension determination, section 85 Resumption of cancellation after payment or suspension

Special arrangements for YA

Generally, payments to dependent YA persons (1.1.D.100) under 18 are NOT paid to the person. These payments are made to the bank account of either:

  • the person's only living parent, or
  • the parent nominated by the person, if both parents are living, or
  • nominee.

In this situation the SS(Admin)Act requires that a YA person who is under 18 and not independent to nominate a parent (if both parents are living), and the nominated parent's bank account for payment, within the prescribed time frames.

The SS(Admin)Act also allows the Secretary to direct that all, or part of, a payment be made to the YA person, or parent or nominee (1.1.N.80) on behalf of the YA person.

Act reference: SS(Admin)Act section 55 Payment into bank account, section 45 Payment of YA, section 56 YA - failure to nominate parent

SSAct 5(1)-'parent'

Policy reference: SS Guide 3.2.5 YA, DSP & SpB for independent young people

Payments credited to the wrong account

Direct credit refund action should be taken when a payment has been made to the wrong account, branch or financial institution and the person is unable to access the account.

Last reviewed: 4 January 2016