Two things about client money have changed, and most practices have absorbed neither.
The first is cosmetic but persistent: the requirement to include the words "clients' account" in the name of the account is gone. OMARA's summary of the changes lists its removal explicitly. Practices still calling their bank and being told the name is unavailable are solving a problem that no longer exists.
The second matters far more. The former Code carried a list of records you had to keep — dates and amounts of deposits with their purpose, withdrawals with the recipient's name, receipts, statements of services, copies of invoices. That list is gone too. In its place, section 50 sets out six rules about how the account must behave.
That is a better regime to reconcile against, because a rule about behaviour is a testable assertion. A list of records is only a filing instruction.
The six rules, read as monthly tests
Section 50(1) requires a responsible migration agent to ensure all of the following, for client money received by them or by anyone in their business.
(a) Client money must be paid into an account with a financial institution. Test: does every client receipt in the period appear as a deposit into that account, at the amount received? Card payments settling net of merchant fees are the usual failure — the client paid $2,000 and $1,941 arrived.
(b) Amounts other than client money must not be paid into that account. Test: can every deposit be traced to a client and an agreement? A float, an owner contribution, or a fee for a matter with no agreement in force all breach this.
(c) Interest on the account must not be paid into the account. Test: is there an interest line? If the bank credits interest to the same account, that is a defect to fix with the bank, not to note.
(d) Nothing may be paid out except for five purposes: to pay you or your business (but not where section 313 of the Migration Act says you are not entitled); to pay amounts required to be paid to the Department or a review authority; to pay disbursements in accordance with the agreement; to refund client money to a client; or to refund it by transfer to another registered agent or their business at a client's instruction. Test: does every withdrawal map to one of the five, with the document that authorised it?
(e) No fees or costs of opening or maintaining the account may be paid out of it. Test: are bank charges hitting this account? Many business accounts apply them by default.
(f) The total paid out for a particular purpose must not exceed the total paid in for that purpose. Test: for every client and every purpose, is the running balance non-negative?
Rule (f) is the one nobody tests
The first five rules are visible on a bank statement. The sixth is not, and it is the most important.
Read literally, section 50(1)(f) prohibits spending money on a purpose beyond what was paid in for that purpose. In practice it forbids the thing a pooled account makes easy: paying client B's visa application charge out of a balance that arrived from client A, on the reasoning that the account holds enough.
The account balance can be perfectly correct while this is happening. It only surfaces at client level, per purpose. A monthly reconciliation that stops at "bank balance equals total client ledgers" will never see it.
Three practical consequences:
- Your ledger needs a purpose dimension, not just a client dimension. Money received for the visa application charge is not interchangeable with money received on account of fees.
- A negative balance for any client and purpose is a finding, not a rounding issue — including where it lasts a day because a disbursement was paid before the client's money cleared.
- Paying a departmental charge before the client's funds arrive is a rule (f) breach even where you fully expect the money. The remedy is to pay it from the operating account, not the client account.
Our practical guide to trust accounting covers the underlying account structure this assumes.
Taking your own fee is the most regulated withdrawal
Rule (d)(i) permits paying yourself, then immediately qualifies it: not where section 313 of the Act says you are not entitled. The Code's own note to section 49 restates what that section does — an agent is not entitled to be paid a fee or other reward for giving immigration assistance unless the agent gives the assisted person a statement of services setting out particulars of each service performed and the charge made for each.
Statement, invoice, receipt — in that order
Section 49 adds its own requirements: you must not charge a client for work or a disbursement unless they are given an itemised invoice with details of what it relates to, and once they pay you must give a receipt identifying the work and the invoice.
So a transfer to your operating account has three prerequisites — statement of services, itemised invoice, and a receipt to follow — and a monthly reconciliation should verify all three exist for every such transfer, not merely that the transfer was recorded. Our guide to fee disclosure and client agreements covers what those documents must say.
Two things that reach the account from outside
Initial consultation money. Where you conduct an initial consultation without a service agreement, section 43(3)(c) applies the instrument to any amounts received as if they were client money under an agreement, requires sufficient funds to cover refunds, and requires refunds to be paid promptly and no later than 14 days after becoming payable. Consultation fees are not outside the regime.
Refunds owed. Section 52 requires refunds payable under an agreement to be paid promptly, and in any case within 14 days of becoming payable. A credit balance on a finished matter is a due refund, not a buffer. It belongs on the exception list every month.
A monthly sequence
- Reconcile the bank account to the ledger control total. Necessary, and nowhere near sufficient.
- Prove every deposit to a client, an agreement and a purpose. Anything unattributable is a rule (b) exception.
- Prove every withdrawal to one of the five permitted purposes, with the authorising document attached.
- Run balances per client and per purpose. Any negative is a rule (f) exception.
- List fee transfers and confirm each has a statement of services, an itemised invoice and a receipt.
- List credit balances on inactive matters and age them against the 14-day refund clock.
- Check for interest and bank charges touching the account at all.
- Sign and date the reconciliation. Section 50(2) requires you to demonstrate compliance to the Authority on request, and a dated monthly pack is the difference between demonstrating and asserting.
The exception list that matters
A reconciliation that balances tells you the arithmetic works. These tell you the rules were followed:
- deposits not attributable to a client and purpose
- withdrawals without an authorising document
- any client-and-purpose balance below zero, at any point
- fee transfers without a statement of services
- credit balances older than 14 days on finished matters
- interest or bank fees on the account
Where a system helps
The reason rule (f) goes untested is arithmetic. Proving it by hand means recomputing a running balance per client per purpose across every transaction in the month, and nobody does that with a spreadsheet and a bank export.
It is trivial for software, and that is the honest case for using some. A ledger that knows what each receipt was for, refuses a payment that would take a client-and-purpose balance negative, and ties every withdrawal to an invoice or a departmental charge turns the monthly reconciliation from a reconstruction into a report.
LodgeHQ tracks client money per client and per purpose, with invoices and receipts attached to the movements they authorise. Our Code compliance checklist covers the surrounding obligations.
Verify before you rely on it
Client money is the area where a mistake is least recoverable and the former Code's rules are most often still in circulation. Read the current text before you rewrite a procedure: the prescribed Code and the Regulations on the Federal Register.
This is general information for migration practices, not legal, accounting or financial advice. Where an agent is also a legal practitioner acting in that capacity, separate rules about client funds apply. Get advice on your own account structure before changing it.