Well the clerk was wrong - whether he didn't look it up or was ignoring or didn't know the rules I can't tell. Australia definitely does not permit cash to be imported through the mail. Whether it's a customs rule or an Australian Mail rule I've no idea.
Having said that I've done it for years and the cash has always arrived. Your nephews would have had to be extremely unlucky not to get it.
There's probably a greater risk with a parcel/packet which customs might open rather than a letter/card which they wouldn't bother with.