Understanding the Limitations of a Power of Attorney in New South Wales

A Power of Attorney (PoA) is a legal document that allows someone (the principal) to appoint another person (the attorney) to make financial and legal decisions on their behalf. While a PoA is a powerful and useful document, it does not grant unlimited authority, and attorneys often discover practical and legal limitations that affect how and where they can act.

This article explores those limitations, particularly under the Powers of Attorney Act 2003 (NSW) and in dealings with government agencies and service providers.

Legal Limitations under the Powers of Attorney Act 2003 (NSW)

1. A prescribed Power of Attorney does not authorise the attorney to act as a trustee in the principal’s place (Section 10). This means if the principal is a trustee of a family trust or superannuation fund, the attorney cannot make decisions in that trustee role unless separately appointed under the trust deed or by a court.

2. Under section 11(1), a PoA does not authorise the attorney to make gifts of the principal’s property unless expressly permitted in the instrument. This includes birthday gifts, donations, or any gift of money or property that benefits others. In a nutshell, attorneys must not diminish the principal’s estate unless clearly allowed.

Section 11(2) allows certain small gifts if the PoA specifically authorised by the wordings of the document. These gifts are limited to reasonable birthday or seasonal gifts to family or close friends and even charitable donations the principal was known to support. In doing so, attorneys must always consider the principal’s financial position and past gifting habits.

3. Section 12(1) makes it clear that attorneys cannot use their role to benefit themselves, unless the document expressly says so. In other words, attorneys are prohibited from transferring assets to themselves, paying themselves fees or gifts beyond reimbursement, entering into financial arrangements that serve their own interest. This also prohibits an attorney from meeting their own living expenses.

Section 12(2) allows for limited benefit where clearly stated in the PoA document. This section can allow an attorney to benefit from the principal’s assets and is often drafted in the document to allow a person appointed by their spouse to meet his or her own living expenses.

4. Section 13(1) states that attorneys cannot provide financial benefits to others, including the attorney’s family or friends, unless the PoA permits it.

Section 13(2) again allows limited benefit to others if the instrument authorises to do so. This section can allow an attorney to use principal’s assets for the living expenses of the principal’s spouse.

Limitations When Dealing with Government and Service Providers

Even when legally appointed, an attorney may face practical limitations when dealing with government departments and private companies.

1. Service NSW and State Government Agencies

While Service NSW accepts PoAs in most of the situations, it often requires:

• Original or certified copies of the PoA.
• Proof of identity for both the principal and the attorney.
• Registration of the PoA with NSW Land Registry Services, for sale, mortgage, or lease of a real estate.
• Specific authority for the transaction involved.

Some state agencies may prefer or require separate agency-specific authorities rather than relying solely on a general PoA. Please note, an interstate enduring power of attorney is recognized in NSW, but those made overseas may not be unless they meet the requirements of the prescribed form.

2. Federal Agencies (Centrelink, NDIS, MyGov, ATO)

Many Commonwealth agencies do accept a state Power of Attorney as sufficient, but may require an authority on its own. For example:

• Centrelink and MyGov requires the attorney to be registered as a Nominee through its own forms.
• NDIS uses participant nominee arrangements, separate from a PoA.
• ATO access is tightly restricted for privacy reasons and usually requires appointment of Authorised contacts through agency-specific process.

3. Banks and Financial Institutions

Banks may accept a Power of Attorney to manage accounts, but each bank has:

• Its own registration process.
• A requirement to verify the document and attorney’s ID.
• Conditions on what the attorney can do (e.g., limits on internet banking).

Some banks will only allow limited transactions until they are fully satisfied with the documentation although registration of the PoA with Land Registry Services will often satisfy the bank’s concerns over the legitimacy of the document.

4. Phone, Utility, and Internet Companies

Power of Attorney is often not accepted as authority for managing someone’s account unless:

• The PoA is registered with the company
• The principal notifies the company in writing (or gives verbal consent)
• The attorney goes through the company’s verification process

Each company may impose different procedural hurdles, especially around privacy and billing systems

Therefore, to summarise:

• A Power of Attorney does not allow gifts or conflicted transactions unless explicitly authorised.
• It does not apply to personal or health decisions — that role belongs to an Enduring Guardian.
• Many government and private agencies require additional authorisations, forms, or processes before recognising an attorney’s authority.
• Always check with the relevant agency before assuming a PoA will be accepted.
• Attorneys should act cautiously and transparently, keeping records and acting only within their legal and practical authority.

While a Power of Attorney is an essential legal tool, understanding its legal limits and practical challenges is critical for anyone acting as an attorney. Misuse or misunderstanding can lead to delays, rejections, or even legal liability.

If you are unsure about your authority or need help using a PoA, it is best to seek legal advice. Contact us for a free thirty-minute consultation with a lawyer.

Any information on this website is general in nature and should not be taken as personal legal advice. We recommend that you speak to a lawyer about your personal circumstances.

Photo by Matthias Zomer