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.
The SS(Admin)Act states that, subject to express legislative exemptions, social security payments (section 23(1)-'social security payment') 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 Nominee arrangements
SSAct section 23(1)-'social security payment'
Policy reference: SS Guide 1.1.N.80 Nominee
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:
Each of these is explained in more detail in the rest of this topic.
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 (e.g. 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:
Act reference: SS(Admin)Act section 123A to section 123S Nominee arrangements
The Commonwealth has the right to recover:
Act reference: SSAct section 1231 Deductions from debtor's social security payment
SS(Admin)Act section 123A to section 123S Nominee arrangements, section 61 Deduction at request of recipient, section 238 Payments to Commissioner of Taxation or the Child Support Registrar
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:
Act reference: SS(Admin)Act section 62 Effect of garnishee or attachment order
Last reviewed: 5 March 2007