PUBLIC GOVERNANCE, PERFORMANCE AND ACCOUNTABILITY RULE
A rule for payment of amount owed to a person at time of death to support
section 103 of the PGPA Act
Please note that this version the rule for the payment of amount owed to a person at time
of death to operationalise section 103 of the PGPA Act has been developed for consultation.
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Public Release 21 November 2013
1. Introduction
The purpose of the proposed rule is to continue the current arrangements under the
FMA Act and FMA Regulations, thereby maintaining the status quo going forward.
2. Intent and rationale for the proposed Rule
The proposed rule is based on existing FMA Regulation 30, with minor drafting changes to
improve readability. There is no intention to change the current arrangements in place
under FMA Act section 65 and FMA Regulation 30. The proposed rule is a technical
requirement that provides the Finance Minister (or delegate) with the power to authorise
the payment to an alternate person in circumstances where the entitled recipient dies. This
rule authorises the Finance Minister (or delegate) to utilise discretion, when considering
who should receive the payment. In practice, this would include the spouse or family
member.
3. Comparable Existing Legislative Requirements
Paragraph 65(2)(a)(ib) of the FMA Act provides that the FMA Regulations may make
provision for the Finance Minister to authorise payment of an amount, if at the time of a
person’s death, the Commonwealth owed that amount to the person without requiring the
production of probate of the will or letters of administration of the estate.
FMA Regulation 30 provides for comparable requirements, called payments pending
probate. This enables the Finance Minister to authorise the payment of an amount that was
owed to a deceased person, to another person whom the Minister considers should receive
that amount.
Similar arrangements exist in other statutory schemes, such as within the various
superannuation Acts. These provide arrangements for payments to be made to a spouse or
family member where the entitled recipient dies.
There are no comparable requirements under the CAC Act.
In practice, FMA Regulation 30 seems to be used in relatively limited circumstances, as
many statutory payment schemes include arrangements for payments owed to a recipient
who has died. FMA Regulation 30 seeks to provide for circumstances where a payment is
owed to a deceased person, and there is no alternate provision to make this payment to a
family member, such as a spouse.
Practically, it seems that this mechanism is mostly used in circumstances involving the death
of an employee, with accrued salary and entitlements potentially payable to a spouse. It is
concerned with the discharge of a debt, on the part of the Commonwealth.
The power to authorise payment without probate or letters of administration addresses
circumstances where a deceased person’s spouse/family member requires the payment to
satisfy a debt or other requirement before probate or letters of administration can be
produced, which can be a lengthy and complex process.
FMA Regulation 30 is delegated to Chief Executives through the Finance Minister’s
Delegations. In practice, this power is often sub-delegated within an organisation. There is
very little policy guidance relating to this provision, its development or the circumstances in
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which it is to be used. However, the authority is not to be exercised without a valid
delegation in place.
4. Proposed rule for Payment of an amount owed to person at time of death
Payment of amount owed to person at time of death
The purpose of this rule is to allow the Finance Minister to authorise a payment owed to a deceased
person to be paid to another person without requiring probate etc.
(1)
This section is made for paragraph 103(f) of the Act.
(2)
If, at the time of a person’s death (whether before or after this section commences),
the Commonwealth owed an amount to the person, or an amount becomes owing to
the estate after the death of the person, the Finance Minister may authorise payment
of that amount to a person who the Finance Minister considers should receive the
payment.
(3)
The Finance Minister may authorise the payment without requiring:
(a) production of probate of the will of the deceased person; or
(b) letters of administration of the estate of the deceased person.
(4)
In deciding who should receive the payment, the Finance Minister must consider the
people who are entitled to the property of the deceased person under:
(a) the deceased person’s will; and
(b) the law relating to the disposition of the property of deceased persons.
(5)
After the payment is made, the Commonwealth has no further liability in relation to
the amount that was owed.
(6)
This section does not have the effect of appropriating the CRF for the purposes of
payments under this section.
5. Date of Effect
The substantive provisions of the PGPA Act will commence on 1 July 2014 and it is intended
that this rule will commence at the same time.
6. Linkages to other Elements of Reform
The proposed rule replicates the intent of an existing discretionary payment component in
the FMA Act and FMA Regulations. As the rule involves a discretionary payment, it shares
some links with the Act of Grace and Ex Gratia payment provisions in the PGPA Act.
7. Impact
The impact should be nil, as this rule is based on an existing provision in the
FMA Regulations and should facilitate the continuation of existing arrangements.
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8. Issues for consideration and feedback
 Subregulation 30(5) of the FMA Regulations (refer Attachment A) has not been
replicated in the proposed rule because it is considered unnecessary. The provision
in effect states that a person must comply with the law, which is self–evident.
 Does the ability to authorise a payment prior to the granting of probate or the
provision of letters of administration create a risk for the Finance Minister? For
example, should a payment to an alternate person be authorised and that person
absconds, while the estate needs to satisfy creditors, is there a liability on the
Finance Minister?
 Given that relatively little is known about the quantum of use for this mechanism,
should it be included in the rules, or could the Act of Grace provision be used?
Should it become clear that the mechanism is needed, it could be added to the rules
at a later point, with greater clarity surrounding its use.
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Attachment A
Existing regulatory provisions – Finance Minister may approve payments
pending probate etc
30 Finance Minister may approve payments pending probate etc
(1) If, at the time of a person’s death, the Commonwealth owed an amount to the person, the
Finance Minister may authorise payment of that amount to the person who the Minister
considers should receive the payment.
(2) The Minister may authorise the payment without requiring production of probate of the
will of the deceased person or letters of administration of the estate of the deceased
person.
(3) In deciding who should be paid, the Finance Minister must have regard to the persons
who are entitled to the property of the deceased person under the deceased person’s will
or under the law relating to the disposition of the property of deceased persons.
(4) Subject to subregulation (5), after the payment is made, the Commonwealth has no
further liability in respect of the payment.
(5) This regulation does not relieve the recipient from a liability to deal with the money in
accordance with law.
(6) This regulation does not have the effect of appropriating the CRF for the purposes of
payments under this regulation.
(7) This regulation extends to a case in which the deceased person died before the
commencement of this regulation.
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