SBS News is reporting that the changes to the Assurance of Support requirements that were introduced immediately after Easter and that retrospectively affect parent visa applications are to be withdrawn.

SBS apparently has obtained a letter which Social Security Minister Dan Tehan sent to Greens Senator Nick McKim on Wednesday, which confirms the Government will undo the Regulation, rather than face a narrow defeat on the floor of the Senate.

The Government will revert to the old rules and will “reassess” any who applied for an Assurance of Support after the April change was introduced.

Mr Tehan apparently plans to rewrite the legislative instrument before the 23rd of May.

This is great news for those parents – and their families – who would have otherwise been looking at their visa application being refused.

The Disallowance Motion discussed in our earlier post which seeks to strike out the retrospective changes to the Assurance of Support income requirement has been introduced to the Senate.

The Motion is scheduled to be discussed after 2pm today, Wednesday the 9th of May, as per Senate Business discussed here (see page 2; you will need a pdf viewer).

For those who want to follow proceedings live you can watch the Senate at this web link.

We will report the result of the Motion when we have it to hand.

Update: The changes to the AoS requirements are to be withdrawn, with the old rules to be reintroduced: see the blog post here.

The Australian Federal Budget has been handed down today.

Hidden away on page 14 of the revenue measures (pdf reader required) is the following narrative:

The Government will introduce a pathway to permanent residency for holders of Retirement (subclass 410) and Investor Retirement (subclass 405) visas.

As part of the establishment of the pathway, the Government will close the subclass 405 visa to new applicants. The subclass 410 visa is already closed to new applicants.

This measure continues Minister Dutton’s pattern of displacing visa applicants who are already awaiting the progression of an application: he has already undertaken a similar measure when introducing a skilled visa pathway for New Zealand citizens, displacing intending subclass 189 Skilled Independent visa applicants.

While this will be good news for the 405 and 410 visa holders in Australia who have been lobbying for permanent residency for many years the consequence for existing parent visa applicants is likely to be increased delays in the granting of their visas.

Indeed, we think it is surprising that parents of children in Australia – where the balance of family test is satisfied – will apparently be lower in the visa processing pecking order than those who will often have no other family in Australia.

In *** breaking news *** the Australian Greens have announced that they are introducing a Disallowance Motion in the Senate in respect of the Instrument that was introduced by the Government immediately after Easter, and which retrospectively affects parent visa applications lodged already.

See this SBS News web page for more details.

We will post more information here as soon as we know more.

Following the proverbial bolt from the blue a few days ago in which the income requirements for individuals acting as Assurers was increased significantly it is perhaps worth remembering that a limited company can also act as an Assurer.

Although a limited company acting as the Assurer has been encountered relatively rarely – at least until now – the regulations under which the Assurance of Support provisions are administered allow limited companies to act as Assurers, and to provide Assurances of Support.

Key points of note are:

• The limited company must be incorporated in Australia.   This will be confirmed by delivery of an Australian Securities and Investments Commission (ASIC) issued Certificate of Registration, confirming the Australian Business Number (ABN) of the company, and providing the bank account details of the company.
• Importantly, a company Assurer is not required to meet the income requirements that pertain to individuals.
• A limited company wanting to act as Assurer must have been operating for at least 2 years.   If the company is set up immediately prior to the AoS application and/or the company has not been operating or is not operating, the AoS will not usually be accepted.
• When assessing the AoS, Centrelink must be satisfied that the company has not been set up for the sole purpose of providing an AoS.  In this regard published guidance advises that: “… a body corporate should provide reliable and verifiable evidence (e.g. tax returns, correspondence from a registered accountant, statement from ASIC) of consistent trading activity for at least two financial or calendar years prior to the date of AoS application that can be used to verify that the body corporate has the capacity to support the assuree.”
• A joint AoS is not possible with a limited company.
• A company cannot give an AoS if it will result in more than 2 adults being assured.  There are no restrictions on the number of children for whom a company can give an AoS.
• The amounts of the AoS Bonds are higher for a company Assurer than for an individual.  Currently the sum to be deposited by a limited company is A$20k for each parent seeking the grant of a Contributory Parent visa; this increases to A$30k from the 1st of April 2019.

Comments on Strategy

For those adversely affected by the increase in the AoS income requirements the use of a limited company Assurer is likely to be worth exploring.

Limited companies are used commonly in Australia – by those who have personal service businesses as well as by those who employ staff and who pay wages.

It may therefore be that a family seeking to bring parents to Australia can enquire of friends and family already in Australia, with a view to utilising an already operating limited company to act as Assurer.

For those who are in a position to plan sufficiently in advance there may be merit in structuring affairs so that a limited company is incorporated and forms part of a holistic financial plan, being mindful that establishing a limited company for the sole purpose of delivering an AoS in due course risks the AoS being refused.

Remember that if the Assuree – ie the parent – is paid a Recoverable Social Security Payment during the AoS period, the resulting debt will be raised against the company.

This means that signing up to an AoS gives rise to a contingent liability on the part of the limited company.

This might be mitigated through the use of a personal guarantee by family and/or the parent/s, to be called upon in the event that a Recoverable Social Security Payment arises during the AoS period.

Recoverable Social Security Payments are discussed in more detail here.

In view of the need for a limited company to be operating for at least 2 years if it is to be accepted as an Assurer it is clear that planning is a key element of a successful visa outcome.

The author of this article is the Managing Director of Go Matilda Visas.  He is a Chartered Accountant as well as a Registered Migration Agent, and is therefore very well placed to explore alternative strategies for the delivery of an AoS through a limited company if an individual who was intending to be the Assurer is unable to meet the new income requirements.