If you hold money on behalf of clients — visa application charges, third-party fees, or advance payments for disbursements — you may need a trust account. Trust accounting is one of the most regulated aspects of running a migration practice, and getting it wrong can result in serious consequences including cancellation of your registration.
When do you need a trust account?
You need a trust account if you receive money from clients that is not your own fee. Common scenarios include:
- Collecting visa application charges (VAC) on behalf of the client to pay DHA
- Receiving funds for skills assessment fees, health examination fees, or translation costs
- Holding advance payments that you haven't yet earned
If you only collect your own professional fees and direct clients to pay DHA and other third parties directly, you may not need a trust account. Many agents structure their practice this way specifically to avoid trust accounting obligations.
Trust account requirements
- Separate bank account — trust funds must be held in a dedicated bank account, completely separate from your business operating account
- Labelled as trust account — the account must be clearly designated as a trust account with the bank
- Receipts for all money received — issue a receipt every time you receive trust money
- Regular reconciliation — reconcile the trust account at least monthly
- Individual client ledgers — maintain a separate ledger for each client showing money received and disbursed
- Interest — interest earned on trust accounts generally belongs to the client unless otherwise agreed in your service agreement
Record-keeping requirements
For each trust transaction, you must record:
- Date of receipt or payment
- Amount
- Client name and matter reference
- Purpose of the payment
- Receipt or payment reference number
These records must be kept for at least 7 years after the relevant transaction.
Common mistakes
- Mixing trust and operating funds — this is the most serious trust accounting violation. Never use trust funds for business expenses, even temporarily.
- Delayed disbursement — if a client pays you their VAC, you should remit it to DHA promptly. Holding trust funds longer than necessary without a clear reason raises concerns.
- Poor record-keeping — inability to produce trust account records when requested by OMARA is a serious compliance failure.
- No reconciliation — if your trust account ledger doesn't match your bank statement, you have a problem that needs immediate attention.
- Using trust funds to cover shortfalls — using one client's trust funds to pay another client's disbursements is a violation, even if you intend to reimburse.
Alternatives to trust accounts
Many migration agents avoid trust accounting altogether by:
- Directing clients to pay DHA directly through ImmiAccount
- Directing clients to pay third parties (skills assessors, health providers) directly
- Only collecting their own professional fees
- Using milestone-based billing where fees are earned upon completion of each stage
This approach simplifies your financial management and eliminates trust accounting risk. However, some clients prefer the convenience of paying everything through their agent, so it's a business decision based on your client base and practice model.
Software for trust accounting
Managing trust accounts in spreadsheets is risky — errors are easy to make and hard to detect. Purpose-built software with built-in trust account ledgers, automated reconciliation, and per-client transaction tracking significantly reduces the risk of compliance failures.
LodgeHQ includes trust accounting functionality with per-client ledgers, automated receipt generation, reconciliation tools, and a clear audit trail — making trust compliance a natural part of your billing workflow rather than a separate administrative burden.