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26/11/2024

Payment of an amount owed to a person at time of death (RMG 402)

RMGs are guidance documents. The purpose of an RMG is to support PGPA Act entities and companies in meeting the requirements of the PGPA framework. As guides, RMGs explain the legislation and policy requirements in plain English. RMGs support accountable authorities and officials to apply the intent of the framework. It is an official’s responsibility to ensure that Finance guidance is monitored regularly for updates, including changes in policy/requirements. 

Audience

This guide is relevant to:

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officials in all non-corporate Commonwealth entities who are required to make a payment of an amount owed by the Commonwealth to a person at the time of their death.

Key points

The Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) provides a discretionary power for the Finance Minister to authorise the payment of an amount if, at the time of a person’s death, the Commonwealth owed that amount to the person.

The Finance Minister has delegated this power to accountable authorities of non-corporate Commonwealth entities through the Finance Minister to Accountable Authorities of Non-Corporate Commonwealth Entities Delegation 2022. The delegation can be found on the PGPA legislation, associated policies and other instruments page.

The PGPA Rule (section 25) is concerned with the discharge of a debt, owed to a person at the time of their death on the part of the Commonwealth. It is likely to be used mainly in circumstances involving the death of an employee with accrued salary and entitlements potentially payable to a spouse or family member. This power is for limited circumstances where there is no other way to make the payment to an appropriate person, such as a spouse or family member.
 
The Finance Minister or delegate:
  • can decide who receives an amount payable by the Commonwealth to the deceased (for example the deceased person’s spouse or family member
  • can make the payment before probate or letters of administration are produced (which can be a lengthy and complex process)
  • must take into consideration the people who are entitled to the payment under succession law (section 25(3) of the PGPA Rule). The Finance Minister or delegate is not bound to act in accordance with that law.
In practice, section 25 is expected to be used in limited circumstances, since many statutory payment schemes (such as superannuation Acts) include arrangements for payments owed to a deceased person. The PGPA Rule is meant for circumstances when a payment is owed to a deceased person and there is no other provision to make this payment to an appropriate recipient, such as a spouse or family member. 
This rule was made under section 103(f) of the PGPA Act. Payments must be made from existing appropriations as an appropriation is not made under these sections of the Act or the Rule.
 
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