How must a migration agent disclose fees and disbursements?

Fees and disbursements in Australian migration practice are governed by Division 3 of the Migration Agents Code of Conduct. The Code does not leave the fee to a conversation, a quote email, or an invoice raised later: sections 46 to 48 place the fee, the likely disbursements, the payment terms and any interest inside the service agreement. The obligations below are set out in the order the Code applies them.

1. The agreement is the only basis for charging fees

“A responsible migration agent in relation to a service agreement must not charge fees, and must ensure that fees are not charged, for work or services performed under the agreement other than as provided for by the agreement in accordance with this section and section 48.”

Two conditions sit inside that sentence. The fee must be provided for by the agreement, and the agreement must itself comply with section 46 and section 48. A service agreement that says nothing about the fee, or that leaves out the payment terms section 48 requires, does not authorise the charge.

2. The fee must be stated as an hourly rate or a fixed total amount

“If fees are to be charged for work or services performed under the service agreement, the agreement must include: (a) details of the fees, specified as either: (i) an hourly rate; or (ii) a fixed total amount (a fixed fee); including any relevant amount of GST or other tax”

The provision names two forms and no others: an hourly rate, or a fixed total amount, which the Code calls a fixed fee. A price described as a range, a starting point, or an amount to be worked out later is neither of the two forms the agreement is required to specify. The disclosure also has to include any relevant amount of GST or other tax, so the tax treatment belongs in the agreement rather than appearing for the first time on an invoice. Paragraph (2)(a) is only half of the fee rule; paragraph (b) supplies the other half.

3. An hourly rate requires a reasonable time estimate

“if the agreement specifies fees as an hourly rate—a reasonable estimate of the time that will be spent performing the work or services”

An hourly rate on its own does not tell a client what the matter will cost, which is why the same subsection requires a reasonable estimate of time alongside it. Where an hourly rate and an estimate are specified, the agreement must also provide that clients “will not be charged for time spent performing work or services under the agreement in excess of that estimate” unless the conditions in section 46(4) are met. An hourly rate with no time estimate is not the disclosure section 46 describes.

4. The rate or fixed fee must be fair and reasonable

“An hourly rate or fixed fee specified as mentioned in paragraph (2)(a) must be fair and reasonable.”

This is a limit on the amount, not a rule about how the amount is written. An agreement can be complete, signed and itemised and the fee can still fail this requirement. The obligation attaches to the rate or fixed fee the agreement specifies, so it is the figure the client is actually charged that has to withstand it.

5. Likely disbursements must be itemised, with the amount and who pays

“The service agreement must include details of the likely disbursements that will be incurred in relation to work or services performed under the agreement and for which the client will be required to pay, including, for each disbursement: (a) either: (i) the amount of the disbursement; or (ii) a reasonable estimate of the amount of the disbursement; including any relevant amount of GST or other tax; and (b) whether the disbursement is to be paid: (i) directly by the client; or (ii) on the client’s behalf.”

The requirement covers the disbursements the agent can foresee when the agreement is signed: the likely disbursements that will be incurred and that the client will be required to pay. For each one, the agreement must give the amount or a reasonable estimate including any relevant amount of GST or other tax, and must state whether the client pays it directly or it is paid on the client's behalf. Two further limits sit in the same section: the agent “must not unreasonably incur disbursements in relation to work or services performed under the agreement”, and must not require a client to pay for a disbursement other than in accordance with subsections (3) and (6) and provisions included in the agreement in accordance with section 48.

6. Payment terms and any interest belong in the agreement

“A service agreement must include: (a) the terms and conditions for the payment of fees for, and disbursements in relation to, work or services performed under the agreement; and (b) the interest, if any, to be charged on unpaid fees and disbursements.”

Two limbs. The agreement must include the terms and conditions for the payment of fees and disbursements, which is where timing, method and sequence of payment are fixed. It must also include the interest, if any, to be charged on unpaid fees and disbursements. If the practice charges interest on overdue amounts, section 48 requires that term to be in the agreement, and an interest charge that the agreement does not contain is not part of the terms the client agreed to.

7. Increases after signing require written notice and written agreement

Where the agreement specifies an hourly rate and a time estimate, section 46(4) requires the agreement to provide that clients are not charged for time beyond the estimate unless exceptional circumstances arise after signing, those circumstances make it impracticable to perform the work at the hourly rate within the estimated time, each client is given, in writing, an updated reasonable estimate, and each client agrees in writing for the work to continue, or one client agrees where the agreement provides that not every client's agreement is required.

Section 46(5) applies the same test to the price itself: the agreement must provide that an hourly rate or a fixed fee “must not be varied unless: (a) exceptional circumstances arise after the agreement is signed; and (b) those circumstances make it impracticable to perform some or all of the work or services under the agreement at the hourly rate within the estimated time, or at the fixed fee, specified in the agreement.”

For disbursements, if the actual amount is greater than the amount or estimate stated in the agreement, section 47(4) prevents the client being required to pay the higher amount unless each client is given written notice of the actual amount and the reason it is greater, and “each client covered by the agreement agrees in writing to incurring the increased cost”, or at least one client agrees where the agreement provides that not every client's agreement is required and any other conditions in the agreement are satisfied. A disbursement that was not reasonably likely when the agreement was signed follows a different path under section 47(3)(b): each client must be given written details including its amount or a reasonable estimate, and the client agreement requirements in section 47(5) must be complied with before the client is charged.

What this requires in practice

• A service agreement that states the fee as an hourly rate or a fixed total amount, with any relevant amount of GST or other tax included in the disclosure.
• A written, reasonable time estimate wherever an hourly rate is used, and a record of the basis for it.
• A fee level that can be defended as fair and reasonable on the figures actually charged.
• A disbursement schedule listing each likely disbursement, its amount or a reasonable estimate including any relevant amount of GST or other tax, and whether the client pays it directly or it is paid on the client's behalf.
• Payment terms and any interest on unpaid fees and disbursements written into the agreement before any charge is raised.
• A process for post-signing increases: a written updated estimate, written notice of an increased disbursement and the reason for it, and written client agreement before the higher amount is charged.

Practice takeaway. The Code makes the service agreement the disclosure document. A fee is disclosed when the agreement states it as an hourly rate or a fixed total amount including any relevant amount of GST or other tax, an hourly rate carries a reasonable time estimate, and the amount is fair and reasonable. A disbursement is disclosed when the agreement names it, states its amount or a reasonable estimate and whether the client pays it directly or it is paid on the client's behalf. Payment terms and any interest belong in the same agreement, and section 46 does not permit a fee to be charged otherwise.