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11.5.4 Payment by Group Payment
Last amended: 27 October 2004
What is group payment
Group payment involves combining the pension instalments for a group of pensioners resident at one institution (eg a nursing home) and making one direct credit to that institution to cover the total of all combined instalments of the individuals within the group.
Ownership of pension instalments not affected
Group payment is not intended to conflict with the inalienability (ownership of pension instalments) provisions. The payments are protected in the same manner as though the payments were made to the pensioner.
Schedule of recipients
A schedule accompanies each group payment deposit to show how the payment is to be allocated by that institution between the pension recipients residing there.
Reasons for group payment
Many of the organisations that care for aged and infirm pensioners such as nursing homes or other institutions, require that pensioners pay for their accommodation and other services by having their pension payment forwarded to the organisation.
Pensioner must appoint an agent
If a pensioner elects to have their pension payments deposited via a group payment, the most appropriate arrangement is for the administrator of the institution to be appointed as the pensioner's agent. A written request from the pensioner must be received by the Commission, specifying agreement and full understanding of the arrangements by both the pensioner and proposed agent. The whole of the pensioner's payments will be redirected to the institution.
Advantages of group payment
Group payments have the following advantages for residents of nursing homes:
- Their living expenses are covered automatically, with the balance distributed individually.
- There is no requirement for the pensioner to operate an account at a financial institution.
- Difficulties using the financial system are overcome at minimal cost to the department.
- Unlike an individual cheque, the payment is easy to trace, and not easily lost.
According to section 58D of the VEA, an agent is a person who has been nominated by a pensioner and approved by the Commission to receive pension instalments on behalf of the pensioner. The agent must:
- pay the pension or allowance to the pensioner; or
- manage the pension or allowance in accordance with the pensioner's wishes.