The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

12.1.5 Nominee arrangements under enhanced income management

Part 3B payment nominees

A Part 3B payment nominee, for the purposes of enhanced 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, 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.

Specific situations

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

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

If both payment nominee and principal are on enhanced 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 enhanced income managed measure, the delegate should consider the appropriateness of the nominee arrangement and whether the arrangement is being used to avoid enhanced income management.

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 enhanced income management nor choose voluntary enhanced income management (12.3.5).

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

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

Example: Lea is Raoul's niece. Lea is placed on the Disengaged Youth measure of enhanced 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 enhanced income management.

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

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

Child Protection, Disengaged Youth, LWPR, SPAR measures

If a payment nominee is placed on the:

  • Child Protection measure
  • Disengaged Youth or LWPR measures, or
  • SPAR measure

then the principal will be placed on the same measure, unless the principal qualifies for income management or enhanced income management in their own right.

Similarly, if a person is on the:

  • Child Protection measure
  • Disengaged Youth or LWPR measures, or
  • SPAR measure

of enhanced 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 their own right.

Principals who are income managed under these measures are not required to meet the relevant legislative criteria (for example, in receipt of a trigger payment) as enhanced income management is applied as a result of their payment nominee relationship. Principals who are income managed under the Disengaged Youth or LWPR measures are not eligible to apply for an exemption.

Example: Judy has been Phil's payment nominee for several years, as Phil has difficultly interacting with banks. Judy becomes eligible for the LWPR measure of enhanced income management, and she does not seek an exemption. She is placed on the LWPR measure of enhanced income management.

As her principal, Phil is also placed on the LWPR measure. Phil has a philosophical objection to enhanced income management and does not want his payments income managed. He contacts Services Australia and cancels the nominee arrangement.

Example: Frank is John's payment nominee. Both Frank and John have chosen to volunteer for enhanced income management. Subsequently, Frank becomes eligible for the LWPR measure of enhanced income management, and does not seek an exemption. He is placed on the LWPR measure of enhanced income management.

As John is already on voluntary enhanced income management, he is able to remain on voluntary enhanced income management. Should he decide to cancel the voluntary arrangement, but Frank still be subject to the LWPR measure of enhanced income management, then John would then also be subject to the LWPR measure of enhanced income management, unless he chose to cancel the nominee arrangement.

Example: Peter is Sue's partner and has been her payment nominee for several years. Peter is placed on LWPR 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 LWPR measure even though she is not in receipt of an income support payment.

Vulnerable, Queensland Commission & voluntary measures

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

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

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

Example: Carol has been her great uncle Marcus' payment nominee for 6 months. Carol was on the LWPR measure of enhanced income management, which meant Marcus was also placed on the LWPR measure. Recently Carol has applied for and successfully achieved an exemption from the LWPR measure of enhanced income management, and Carol decides to commence voluntary enhanced income management. Marcus does not automatically become subject to enhanced income management, but he can choose to enter voluntary enhanced income management.

Entering a nominee arrangement when both parties are already income managed

Where both nominee and principal are already income managed, entering a nominee arrangement does not affect the income management measure or enhanced 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 enhanced income management in their own right and the payment nominee was on the Child Protection, Disengaged Youth, LWPR or SPAR measures, then the principal would go onto the same measure.
  • If the principal was to cease being income managed in their own right and the payment nominee was on the VWPR measure, Queensland Commission measure or is voluntarily income managed then the principal would have the option of participating in voluntary enhanced income management.
  • If the payment nominee were to cease being income managed then the principal would also cease being income managed, as they would have an excluded Part 3B payment nominee.

SmartCard arrangement for nominees

If a person is on an enhanced income management measure and has a payment nominee, the principal's SmartCard may be issued to either the payment nominee in the name of the payment nominee, or to the principal with the consent of the payment nominee.

A nominee may hold multiple SmartCards, one for their own account and one for each of their principals. In this situation all SmartCards would be in the payment nominee's name. Each SmartCard would indicate which principal or enhanced income management account it relates to.

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

Example: Friends, Lance and Paul, are on voluntary enhanced income management. Paul is having difficulty managing his finances, so he nominates Lance as his payment nominee. Lance allows Paul’s SmartCard to be issued to him. Lance also manages Paul's discretionary funds. Both remain on voluntary enhanced income management. Subsequently Lance becomes eligible for the Child Protection measure. Lance is placed on the Child Protection measure, but since Paul is already on voluntary enhanced income management he will remain on voluntary enhanced income management. If Paul exited voluntary enhanced income management, he would be placed on the Child Protection measure of enhanced income management, should he retain the nominee arrangements.

Act reference: SS(Admin)Act section 123SB Definitions, section 123B Appointment of payment nominee, section 45(1) Payment of YA-person under 18 and not independent

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