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.

8.4.3 Protection of payment


This section explains the principle of protection of payment, or inalienability provisions. It also explains 3 circumstances in which, although a recipient does not directly receive their payment, these provisions are not compromised.

Legal basis for protection of payment

The SS(Admin)Act states that, subject to express legislative exemptions, social security payments are absolutely inalienable. This means that they cannot be sold, transferred to a third party, legally charged or be subject to bankruptcy proceedings. This gives legal force to the intention that payments are designed to provide income support. A recipient's right to receive a payment or benefit CANNOT be transferred to another person either by a voluntary act or by the operation of the law.

Although, under the Act, the Secretary may direct that a payment be made to another party, this would normally only occur with the consent of the recipient. This does not operate as alienation since the third party payment is made on behalf of the recipient. If the recipient does not have the capacity to consent, the Secretary may direct payment to a third party in the best interests of the recipient.

Example: The Secretary may direct that payments be made to a payment nominee at the request of the recipient.

Act reference: SS(Admin)Act section 60 Protection of social security payment, section 123A to section 123S Nominees

SSAct section 23(1)-'social security payment'

Policy reference: SS Guide 1.1.N.80 Nominee

Maintaining protection of payment

There are 3 circumstances in which, although a recipient does not directly receive their payment, they do NOT transfer their right to that payment. Those circumstances are when a payment is:

  • voluntarily directed by the recipient to a third party, though the payment is still used for the benefit of the recipient, OR
  • withheld by the Commonwealth to repay a debt (1.1.D.40) which the recipient owes to the Commonwealth, OR
  • subject to a garnishee order on the account to which the payment is made.

Each of these is explained in more detail in the rest of this topic.

Recipient voluntarily directing payment to another party

Generally, a recipient MUST agree before any payments can be paid to a third party. If the recipient does not have the legal capacity to agree (for example, because of mental disability), the Secretary may direct payments be made to a third party, provided it is in the best interests of the recipient. This is usually done by appointing a nominee (1.1.N.80), using the relevant form.

Examples: A recipient may direct their payments to:

  • a payment nominee, OR
  • an institution, or ACO (1.1.A.200), through a group payment arrangement.

Act reference: SS(Admin)Act section 123A to section 123S Nominees

Commonwealth recovering debt

The Commonwealth has the right to recover:

  • social security debts under SSAct Part 5.2
  • a person’s tax-related liability, a judgment debt for a tax-related liability, costs for such a judgment debt, or an amount that a court has ordered the person to pay to the Commissioner following their conviction for an offence against a taxation law, by requiring the Secretary to make deductions from the social security payments payable to that person under section 238 of the SS(Admin)Act and Subdivision 260-A in Schedule 1 of the Taxation Administration Act 1953, AND
  • other debts incurred under certain other specific legislative provisions.

Act reference: SSAct section 1231 Deductions from debtor's pension, benefit or allowance

SS(Admin)Act section 123A to section 123S Nominees, section 61 Deduction at request of recipient …, section 238 Payments to Commissioner of Taxation or the Child Support Registrar

Garnishee orders

Once a social security payment has been paid into a recipient's bank account it is no longer a social security payment under the Act. It becomes part of the recipient's funds. A garnishee order on the account, equal to the amount of the recipient's payment, is NOT affected by the inalienability provisions. The Act, however, provides for a saved amount to which the garnishee order CANNOT apply. The saved amount is equal to the following:

  • the total amount of the recipient's payment, including advances, paid into the account in the 4-week period immediately before the order, MINUS
  • the total amount withdrawn from the account in the same period.

Act reference: SS(Admin)Act section 62 Effect of garnishee or attachment order

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