Methods of payment

8.45 Generally, all social security payments are paid on a fortnightly basis in arrears. Payments may also be made in advance, urgently or weekly. Most social security payments are made by direct deposit to the recipient’s bank, building society or credit union account. However, Centrelink may make payment to another person or organisation when a person is under 18 and receiving Youth Allowance. Payment is made to a parent or guardian unless: the young person is independent; or there is a nominee appointed (either a person or an organisation).^[48]

Weekly payments

8.46 Weekly payments of social security can be made to those considered to be ‘most vulnerable’,^[49] defined as a person who:

• is homeless, or
• is at risk of homelessness and has issues of vulnerability and significant disadvantage and would benefit from receiving payments on a weekly basis, or
• has considerable difficulty in managing their finances … on a fortnightly basis and would benefit from receiving payments on a weekly basis.^[50]

8.47 Weekly payments are offered in conjunction with other services and referrals, such as family violence counselling. Receiving income support payments on a weekly basis is voluntary. Centrelink works with people to assess their needs.^[51]

8.48 In determining whether a person is eligible for weekly payments, the Guide to Social Security Law provides that a decision maker should take into account, among other things, ‘recent traumatic relationship breakdown, particularly if domestic or family violence was involved’ and whether the ‘person is experiencing financial exploitation’.^[52]

Submissions and consultations

8.49 In the Social Security Issues Paper, the ALRC asked whether, in practice, Centrelink customers, including victims of family violence, were aware of weekly payments and were provided them when requested.^[53]

8.50 Responses from stakeholders indicated that victims of family violence were not always aware of the option to receive their social security payments weekly.^[54] The Public Interest Advocacy Centre recommended that ‘all Centrelink customers for whom family violence has been identified, should be routinely informed of the possibility of receiving weekly payments’.^[55]

8.51 The North Australian Aboriginal Justice Agency (NAAJA) raised an additional concern with the requirement that weekly payments are only available to the ‘most vulnerable’.

We are currently hesitant to advise people to ask for weekly payments in the NT because we are concerned that this will trigger an assessment of the customer as a ‘vulnerable’ person for the purposes of compulsory income management’.^[56]

ALRC’s views

8.52 In order to increase awareness of the availability of weekly payments, the ALRC considers that information about weekly payments should be included as part of the information provided to all customers in Proposal 4–8.

8.53 As discussed in Chapter 13, a ‘vulnerable welfare payment recipient’ may be subjected to the imposition of income management. An indicator of vulnerability includes financial hardship, financial exploitation, failure to undertake reasonable self-care or homelessness or risk of homelessness.^[57]

8.54 The prospect of being subject to income management may mean that people experiencing family violence do not request weekly payments due to fear that they will be placed on compulsory income management. Consequently, such reluctance may jeopardise a victim’s safety as he or she is unable to access the required financial assistance.

8.55 In Chapter 13, the ALRC makes a proposal that persons experiencing family violence should not be caught by the vulnerability indicators for income management, and therefore not placed on compulsory income management. The ALRC therefore considers that the proposals made in Chapter 13 in relation to income management should address the concerns raised by stakeholders in relation to weekly payments.

Urgent payments

8.56 Where a social security recipient is suffering severe financial hardship due to ‘exceptional and unforeseen circumstances’, an urgent payment of the person’s next fortnightly payment may be made.^[58] Urgent payments result in a lower subsequent payment on the recipient’s usual payment delivery day.

8.57 An ‘urgent payment’ is to be contrasted with a ‘hardship advance payment’ or an ‘advance payment’. A hardship advance payment is an amount of a recipient’s first instalment of social security payment that is paid when first granted, or the first instalment immediately following resumption of payment, to assist people in severe financial hardship, including those recently released from prison. An advance payment is the early delivery of a recipient’s entitlement.^[59]

8.58 The Guide to Social Security Law does not refer to family violence as an ‘exceptional and unforeseen circumstance’. However, a one-off urgent payment may be made to a third party on behalf of a social security recipient in exceptional and unforeseen circumstances, where it is necessary to alleviate immediate hardship to the recipient, such as where the recipient is required to change a place of residence because of family breakdown.^[60]

Submissions and consultations

8.59 In the Social Security Issues Paper, the ALRC asked whether family violence should be included in the Guide to Social Security Law as an example of an ‘exceptional and unforeseen circumstance’ when considering whether or not to make an urgent payment.^[61]

8.60 Stakeholders commented that family violence should be expressly referred to as an ‘exceptional and unforeseen circumstance’.^[62]The ADFVC submitted that ‘family violence victims may need additional financial and material support, particularly when they first separate’;^[63] and stressed the importance of early access to financial assistance, because ‘women who were able to stabilise their financial situation quickly after separation were doing much better than women who were not’.^[64]

8.61 The Commonwealth Ombudsman noted that, although ‘family violence would seem to fall into the broader category of family breakdown … there would seem to be value in clearly articulating family violence as a relevant consideration for deciding whether to grant an urgent payment’.^[65]

8.62 The Welfare Rights Centre Inc Queensland noted difficulties with the requirement that the circumstance be ‘unforeseen’, submitting that ‘[p]eople have been denied urgent payments in cases where they could easily foresee the violence occurring’.^[66]

8.63 The Ombudsman raised an additional concern that customers experiencing family violence have been advised that they may access only Crisis Payment or an advance or an urgent payment, rather than a combination of these payments. The Ombudsman noted that such advice was not supported by social security law or policy, but seemed ‘to indicate that staff are not considering each customer’s individual circumstances before making a decision about their assistance needs’. Accordingly, the Ombudsman suggested that ‘procedural guidance to staff regarding payments and service for customers affected by family violence be updated to provide discretion to staff to consider all available assistance and to offer any or all payments or services required in the customer’s particular circumstances’.^[67]

ALRC’s views

8.64 Although family violence may be considered as ‘family breakdown’, there is an overarching concern that victims of family violence may be refused urgent payments merely because the family violence is ‘foreseen’. The ALRC considers it would be constructive to amend the Guide to Social Security Law expressly to refer to family violence as a separate category of circumstance when an urgent payment may be made so that the reference to ‘unforeseen’ is not a consideration in determining whether to make an urgent payment to a person experiencing family violence.

8.65 The ALRC also proposes that clearer guidance should be provided in the Guide to Social Security Law to ensure that urgent or advance payments are not refused on the basis that a person is already receiving Crisis Payment.

8.66 In addition, the ALRC considers that information about urgent payments should be included in Proposal 4–8 to ensure that victims of family violence are aware of the possibility of being able to request an urgent payment.

Payment pending review

8.67 Under ss 131 and 145 of the Social Security (Administration) Act,the Secretary may continue payment, pending the outcome of an application for review. If a job seeker asks for a review of a decision to apply a ‘Serious Failure’ or an ‘Unemployment Non-Payment Period’ (discussed in Chapter 7) by an Authorised Review Officer or the Social Security Appeals Tribunal, the job seeker should be paid pending the finalisation of the review.^[68] Payment pending review is not available for ‘No Show, No Pay’ or ‘Reconnection Failures’.

8.68 The Welfare Rights Centre NSW indicated that there is a reluctance to grant payment pending a review and suggested that there should be a presumption in favour of payment pending review when the customer is at risk of, or experiencing, family violence.^[69]

8.69 The ALRC is concerned that such a proposal for a presumption in favour of payment pending review when a customer is at risk of, or experiencing family violence, may create a ‘two-tier’ system and that others would not also benefit from such a presumption. Therefore, the ALRC does not consider a proposal should be made in this regard in this Inquiry.

Nominee arrangements

8.70 Part 3A of the Social Security (Administration) Act provides for the appointment of nominees for both correspondence and payment of social security.^[70] Nominee arrangements provide flexibility for individuals to decide who can act as their ‘agent’, and also operate as a useful mechanism in situations where an individual has limited, intermittent or declining capacity.^[71] For victims of family violence, nominee arrangements can be useful for protecting his or her income support when they are in transitory accommodation or have no fixed address.

8.71 A number of safeguards are provided in the Social Security (Administration) Act and the Guide to Social Security Law to minimise abuse of a nominee appointment. These include safeguards concerning:

• the process of appointment;
• ensuring the capacity of the principal to consent to a nominee arrangement;
• duties of nominees;
• revocation of nominee arrangements; and
• penalties.

8.72 However, under Centrelink arrangements, the nominee need not be the person to whom the social security recipient has granted a power of attorney and there are no checks to ensure that a person holding the social security recipient’s power of attorney is informed of any Centrelink nominee arrangement.

Appointment of nominees

8.73 An initial safeguard in nominee arrangements is the requirement that a nominee may only be appointed with the written consent of the person to be appointed, after taking into consideration the wishes of the proposed principal.^[72] A copy of the appointment is to be provided to the nominee and the principal.^[73] There are also safeguards regarding how a nominee appointment is signed—requests for nominee appointments signed with a cross or mark are not to be accepted unless there is supportive evidence as to the principal’s ‘incapacity’ to consent.^[74]

Capability of principal to consent

8.74 Certain safeguards are in place to ensure that the principal has ‘capability to consent’ to a nominee arrangement. In determining whether a principal is incapable of consenting to the appointment of a nominee, a delegate must have sufficient evidence—such as reliable medical evidence, an order officially appointing a guardian or administrator, or some other authoritative source, such as a social work report.^[75]

8.75 Other safeguards include provisions such that where:

• there are questions concerning the principal’s capability to consent, the situation must be investigated;
• the principal is deemed incapable of providing consent, any decision by a delegate to appoint a nominee must be supported by documentary evidence; and
• a principal has a psychiatric disability, a nominee can be appointed where there is a court-appointed arrangement.^[76]

Responsibilities and capability of nominees

8.76 A nominee is required to act in the best interests of the principal.^[77] Further, in the appointment of a nominee, a delegate must be satisfied that the proposed nominee understands the responsibilities and appears capable of carrying them out. The Guide to Social Security Law states that particular scrutiny should be given to requests where the nominee runs a boarding or rooming establishment, there are multiple voluntary nominee appointments for the same nominee, or the nominee does not live in the same residence, or in close proximity to, the principal.^[78]

Review of nominee arrangements

8.77 There is no provision for regular review of nominee arrangements by Centrelink. Rather, any reviews of nominee arrangements are conducted as soon as any allegation of the misuse of a social security payment is received.^[79] Any allegations of misuse of the nominee arrangements must be referred immediately to a social worker.^[80]

Revoking nominee arrangements

8.78 A nominee arrangement may be revoked in a number of circumstances, including where the nominee:

• informs the Secretary in writing that he or she no longer wishes to be a nominee;^[81]
• becomes subject to income management;^[82]
• informs the Department of Families, Housing, Community Services and Indigenous Affairs that an event or change of circumstances has occurred, or is likely to occur, which will affect the ability of the nominee to act to the benefit of the principal or failure to comply with certain notices.^[83]

Penalties

8.79 Section 123L of the Social Security (Administration) Act requires the nominee to provide a statement regarding the disposal of money under a nominee arrangement. A penalty may apply if the nominee fails to respond to that request.^[84] However, no penalty applies in relation to the actual disposal of money under the nominee arrangement. In addition, no penalties attach to breach of duties of the nominee.

Submissions and consultations

8.80 In the Social Security Issues Paper, the ALRC identified that Centrelink arrangements for nominee appointments, reviews and penalties may allow economic abuse by a family member holding a nominee authority to go unnoticed.^[85] The ALRC therefore asked whether social security law or practice concerning nominees should be amended to minimise the potential for financial abuse by people holding nominee authority. The ALRC also asked whether the Social Security Act should be amended to recognise other legal authorities of a person nominated by the social security recipient, such as under powers of attorney or enduring guardianship.^[86]

8.81 While one stakeholder noted that current nominee arrangements are ‘likely to be used in the best interest of the principal in the majority of circumstances’,^[87] some stakeholders raised concerns about the appropriateness, and level of knowledge, of nominee arrangements amongst nominees and principals. Stakeholders also raised concerns about:

• safeguards to determine a person’s suitability and capacity to fulfil the requirements of a nominee;^[88]
• a lack of recognition of other legal forms of authority,^[89] which may create inconsistencies and confusion;^[90]
• the lack of review and assessment as to whether the nominee arrangement is in the principal’s best interest or entered into willingly;^[91] and
• lack of penalties attached to the duties of a nominee.^[92]

8.82 Stakeholders suggested a number of safeguards that might act to protect against economic abuse in nominee arrangements, including:

• additional checks^[93]—such as checks for criminal record, bankruptcy, debt and character references—before a nominee is appointed;^[94]
• improved interview arrangements, including that:
• interviews for nominee arrangements be undertaken by a Centrelink social worker or other staff with relevant training to identify and screen for issues of duress and capacity;
• the principal be interviewed without the (proposed) nominee present; and
• where it is impractical for the principal to attend an interview, the principal’s wishes are confirmed by an independent authority;^[95]
• requirements for nominees to keep their financial dealings separate from the principal’s entitlement, as well as maintaining receipts and records of expenditure;^[96] and
• informing any person holding a power of attorney or enduring guardian of the nominee arrangement.^[97]

8.83 The Ombudsman considered that changes such as these would ‘foster more consistent decision making and ensure representative arrangements that protect customers rather than potentially exposing them to greater manipulation or abuse’.^[98]

8.84 In addition, the Elder Abuse Prevention Unit recommended that penalties should apply to nominees who do not act in the best interest of the principal, such as where the nominee defrauds the principal or Centrelink.^[99]

ALRC’s views

8.85 Inherent in any nominee arrangement there is a potential for economic abuse of the principal by the nominee. The ALRC considers that, in the social security context, this may be minimised through additional safeguards but notes that not all nominees will necessarily be a family member of the principal. Therefore, economic abuse or duress in nominee arrangements will not be ‘family violence’ in all circumstances. To propose review arrangements for nominee arrangements between family members and not for others would create a two-tier system. Likewise, to suggest stronger penalties for family members who are nominees would create a two-tier system but could deter family members from acting as a person’s nominee. In addition, the overlap with powers of attorney and enduring guardianship—while at times may be problematic—is beyond the scope of this Inquiry.

8.86 However, the ALRC does consider that some improvements may be made to current safeguards to ensure that decision makers take into consideration the possibility or presence of family violence upon appointment of a nominee.