House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Family and Community Services, Senator the Hon Amanda Vanstone)

Schedule 1 - amendments of the social security law relating to nominees

Amendments of the Social Security (Administration) Act 1999

Items 1 and 2 are technical amendments consequential upon the on the changes made in the new Part 3A dealing with nominees.

Item 3 repeals the existing generic payment nominees provisions in subsections 44(3) and (5) and substitutes a new subsection (3) that makes the section relating to payments to a person subject to the new Part 3A that deals with nominees.

The effect of item 4 is to repeal the existing payment nominees provision that relates to youth allowance as a consequence of the insertion of new Part 3A.

Item 5 inserts a new subsection 45(4) that makes section 45 relating to the payment of youth allowance subject to the new Part 3A that deals with nominees.

The amendments made by items 6 to 8 are consequential upon the insertion of Part 3A that deals with nominees.

Item 9 inserts new Part 3A after Part 3.

Part 3A - Nominees

Proposed Division 1 - Preliminary

Proposed section 123A - Definitions

Section 123A introduces and defines five new terms for the purposes of this Part:

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correspondence nominee;

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nominee;

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payment nominee;

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principal; and

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relevant payment.

Proposed Division 2 - Appointment of Nominees

Proposed section 123B - Appointment of payment nominee

Section 123B provides for the Secretary to be able to appoint a person to be the payment nominee of another person for the purposes of the social security law and direct that the whole or part of the payment be paid to the payment nominee.

Proposed section 123C - Appointment of correspondence nominee

Section 123C provides for the Secretary to be able to appoint a person to be the correspondence nominee of another person for the purposes of the social security law.

Proposed section 123D - Provisions relating to appointments

This section deals with the administrative procedures that relate to appointment. Subsection 123D(1) provides that a person may be both the payment nominee and the correspondence nominee of the same person. It is reasonably common for children of an elderly person who can no longer manage their own affairs to manage the financial affairs of their parent and to handle their correspondence relating to their age pension. It is also common for parents of children with a disability to manage the financial affairs of their children and to handle their correspondence relating to disability support pension. The new provision facilitates such arrangements.

Proposed section 123E -Suspension and revocation of nominee appointments

Subsection (1) provides that if a person withdraws their consent to be a nominee under section 123B or 123C, the Secretary must revoke the person's appointment as a nominee as soon as practicable.

Subsection (2) provides that the Secretary may suspend or revoke appointments in if the Secretary gives the nominee a notice under section 123K and the nominee informs the Department of an event or change of circumstances or the likelihood of such an event or change occurring and the event or change is likely affect the ability of the nominee to act as nominee or the ability of the Secretary to give notices or the ability of the nominee to comply.

Subsection (3) provides that the Secretary may suspend or revoke appointments in writing if the Secretary gives the nominee a notice under section 123K or 123L and the nominee does not comply with the notice.

Subsection (4) provides that while the appointment is suspended the appointment has no effect for the purposes of the social security law.

Subsection (5) provides that the Secretary may at any time cancel a suspension of an appointment under subsection (1).

Subsection (6) provides that any suspension or revocation of a nominee appointment must be made by the Secretary in writing.

Subsection (7) provides that the revocation of an appointment has effect on and from the day specified in the revocation.

Subsection (8) provides that subsection (2) does not apply to a person who is a nominee because of paragraph (b) of the definition of payment nominee in section 123A.

Proposed Division 3 - Payments to payment nominee

Proposed section 123F - Payments of instalments etc. to payment nominee

Subsection (1) provides that if a person has a payment nominee an amount payable to the person under the social security law is to be paid to the payment nominee.

Subsection (2) provides that the amount paid to the payment nominee of a person is paid on behalf of the person and is deemed to have been paid to the person when it is paid to the payment nominee.

Subsection (3) provides that an amount that is to be paid to the payment nominee of a person must be paid to the credit of a bank account and maintained by the nominee.

Subsection (4) provides that the Secretary may direct that an amount paid to a payment nominee may be paid to the payment nominee other than to the credit of a bank account maintained by the nominee.

Subsection (5) provides that subsections (3) and (4) do not apply where a person is payment nominee by virtue of paragraph (b) of section 123A.

Proposed Division 4 - Functions and responsibilities of nominees

Proposed section 123G - Interpretation

This section defined the term benefit recipient to mean a person who:

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has claimed or is receiving a social security payment; or

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has claimed or is the holder of a concession card.

Proposed section 123H - Actions of correspondence nominee on behalf of principal

Subsection (1) provides that, subject to subsection (4), any act that may be done by a person may be done by that person's payment nominee for the purposes of the social security law (other than one under Division 2 or 3). This is subject to Division 5.

Subsection (2) provides that an application or claim that may be made under the social security law by a person may be made by the person's payment nominee on behalf of that person.

Subsection (3) provides that the actions of a person's correspondence nominee are those of the person where they are done for the purposes of the social security law.

Subsection (4) deals with the situation where the Secretary gives a notice to benefit recipient because the act to be done under the notice is one that must be done by the benefit recipient, such as attending a medical examination, entering into a Newstart Activity Agreement or the things mentioned in subsection 601(2) of the Social Security Act 1991 . The power to give notices to the benefit recipient is preserved by section 123Q. Subsection (4) limits subsection (1) to the extent that an act is required to be done by the benefit recipient.

Proposed section 123I - Giving of notices to correspondence nominee

Subsection (1) provides that any notice given by the Secretary to the benefit recipient under the social security law may be given to that person's correspondence nominee.

Subsection (2) provides that the notice must be in the same form as if it were being given to the benefit recipient and it may be given either personally or sent by post to the correspondence nominee.

Subsections (3) and (4) deal with the giving of notices to both the benefit recipient and the nominee.

Proposed section 123J - Compliance by correspondence nominee

This section details what a correspondence nominee must do to comply with a notice under section 123I and the consequences of the correspondence nominee complying or failing to comply with the notice.

Proposed section 123K - Notification by nominee of matters affecting ability to act as nominee

Subsection (1) provides that the Secretary may give a nominee a notice requiring the nominee to inform the Department of the occurrence of an event or a change in circumstances or if the nominee becomes aware of these as well as if the event or circumstances is likely to affect either the nominee's ability to act as a nominee or the Secretary's ability to give notices to the nominee or the nominee's ability to comply with notices given to the nominee by the Secretary.

Subsection (2) is subject to subsection (3) and deals with the requirements of notices given under subsection (1).

Subsection (3) provides that a notice under subsection (1) is not ineffective because it fails to inform the nominee how to give the required information to the Department.

Subsection (4) provides that a person must be given at least 14 days after either the day on which the event or change of circumstances occurs or the day on which the nominee becomes aware that the event or change of circumstances is likely to occur, to notify the Department. This is subject to subsection (5).

Subsection (5) provides that subsection (4) does not apply if a notice requires the nominee to inform the department of any proposal by the principal to leave Australia.

Subsection (6) provides that the section extends extraterritorially.

Proposed section 123L - Statement by payment nominee regarding disposal of money

Subsection (1) provides that the Secretary may give the payment nominee a notice requiring the nominee to give the Department a written statement about a matter relating to the disposal by the nominee of money paid to the nominee on behalf of the principal under the social security law.

Subsection (2) is subject to subsection (3) and deals with the requirements of notices under subsection (1).

Subsection (3) provides that a notice under subsection (1) is not ineffective because it fails to inform the nominee how to give the required information to the Department.

Subsection (4) provides that a person must be given at least 14 days after either the day on which the event or change of circumstances occurs or the day on which the nominee becomes aware that the event or change of circumstances is likely to occur, to notify the Department.

Subsection (5) provides that the statement given in response to a notice under subsection (1) must be in writing and in accordance with a form approved by the Secretary.

Subsection (6) creates an offence in relation to the nominee who refuses or fails to comply with a notice under subsection (1). The penalty for a contravention of subsection (6) is 60 penalty units.

Subsections (7) and (8) set out defences for the purposes of subsection (6).

Subsection (9) provides that the offence of refusing or failing to comply with a notice is an offence of strict liability like similar offences in the Social Security (Administration) Act 1999.

Subsection (10) provides that the section extends extraterritorially.

Division 5 - Other matters

Proposed section 123M - Protection of principal against liability for actions of nominee

Subsection (1) provides that the principal is not guilty of an offence under this Division for the acts or omissions of the nominee.

Subsection (2) provides that subsection (1) does not prevent the principal from being guilty of an offence against this Act or another Act

Proposed section 123N - Protection of nominee against criminal liability

Subsection (1) provides that the nominee is not subject to any criminal liability under the social security law for any act or omission of the principal or anything done in good faith by the nominee in his or her capacity as nominee.

Subsection (2) provides that it is subject to section 123L.

Proposed section 123O - Duty of nominee to principal

Section 123O establishes a duty upon the payment or correspondence nominee to act at all times in what he or she believes in good faith to be the best interests of the principal.

Proposed section 123P - Saving of Secretary' powers of revocation of appointments

This section makes it clear that the power of revocation is that contained in subsection 33(3) of the Acts Interpretation Act 1901 .

Proposed section 123Q - Saving of Secretary's powers to give notices to principal

This section makes it clear that the nothing in Part 3A is intended to limit the power of the Secretary to give notices to a benefit recipient. There are some things under the social security law that must be done by the benefit recipient, such as attending a medical examination.

Proposed section 123R - Notification of nominee where notice given to principal

This section provides the if the Secretary gives a notice to a benefit recipient and the person has a correspondence nominee then the Secretary may inform the correspondence nominee of the giving of the notice.

Proposed section 123S - Right of nominee to attend with principal

This provision deals with the situation where the Secretary gives a notice to a person who has a correspondence nominee because the Secretary requires the person to do something personally. The correspondence nominee is given the right to attend or accompany the person if the person wishes this to occur.

Item 10 inserts a new subsection 208(3A) to allow the disclosure of information to the nominee.

Item 11 is a transitional provision that provides for the continuation of existing payment directions.