Yes, "family members" can request upgrades for other family members on a QF operated flight with a QF PNR. You need to specify a relationship to the other person travelling. I do not know how in reality this is checked or enforced. I have upgraded someone with a non matching surname on a domestic sector without an issue, but I'm thinking it's not something people would want to make a regular habit of it is not a relative/in-law (the list is fairly wide IIRC).
Also the status of the QFF member making the upgrade award gives the priority of the request, so it pays to have a WP Uncle
See:
http://www.qantas.com.au/fflyer/dyn/...domestic#jump4
and
http://www.qantas.com.au/fflyer/dyn/program/terms#jump1
Eligible Family Member' of a Member means any person the Member can demonstrate, to the reasonable satisfaction of Qantas, as being related to that Member in any of the ways described below:
Husband/Wife
Parent/Step-parent
Domestic Partner/De Facto
Child, including foster & step-child
Brother/Sister
Half Brother/Sister
Grandparent
Grandchild
Son/Daughter-in-law
Brother/Sister-in-law
Father/Mother-in-law
Uncle/Aunt
Nephew/Niece
First cousin