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:
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.
As many will know, an Assurance of Support (“AoS”) is a requirement of all permanent parent visas:
An income test has to be satisfied by the person acting as Assurer – or persons, as up to 3 people can combine their income to provide a joint and several Assurance of Support.
A Legislative Instrument has been brought into force that significantly increases the income to be verified by the Assurer, with immediate effect.
In other words, the increase in the income requirements affects all who have not lodged the application for the AoS with Centrelink before the 1st of April, 2018.
This change will therefore affect many applicants for parent visas where the AoS is required at the final stages of the application process.
For subclass 143 Contributory Parent visa applicants the AoS process takes place typically some 2½+ years after the visa application was lodged with the Department of Home Affairs (formerly the Department of Immigration).
Furthermore, the person who gives the AoS is now required to demonstrate a minimum income for the current financial year and (now) the two previous financial years.
What Evidence is Needed?
For the current financial year, the person must provide evidence about his/her assessable income for the part of the financial year up to the date on which the assurance is given, which can include the following:
For each of the two previous completed financial years the person must provide a Notice of Assessment issued by the Australian Taxation Office.
If the notice of assessment issued by the ATO does not disclose sufficient income to satisfy the minimum income requirement, then documents must be provided that show payments of the other income forming “assessable income” as noted below.
If the person acting as an Assurer has not lodged a tax return for the previous year, a letter from the employer is required that provides details of the person’s employment including the date of commencement of employment, the amount of taxable income, with a copy of the contract of employment.
A self-employed person is required to provide a letter from his/her accountant.
In such circumstances the person will have to provide the Notice of Assessment issued by the ATO for the previous financial year.
Assessable income of a person for a financial year includes any one or all of the following:
Where a person cannot provide evidence for either of the two previous financial years the income will be taken to be nil.
How Much Income?
The income requirement is equal to the Newstart Allowance (“NSA”) income cut-off amount – ie the NSA income cut-off amount for a single person with dependent children as at the 1st of July in each financial year – for each of the adults involved in the AoS, whether they are an assurer, assurer’s partner or assuree.
In other words the required income is the NSA income cut-off amount multiplied by:
If the assurer’s family or the assuree’s family includes children under 18 years of age, the assurer’s income threshold is increased by 10% of the NSA income cut-off amount for each child.
The income requirement will apply to each person giving an AoS, whether the assurance is given by one or more people.
The Managing Director of Go Matilda Visas is also a Chartered Accountant and a Registered Tax Agent in Australia, so is ideally placed to advise Assurers with more complex income circumstances who would like an opinion on whether they can satisfy the new AoS income requirement.
Examples
Here are some examples of the new income requirement, based on the current NSA income cut-off amount of $29,430.47.
An online income calculator is available at the Federal Government’s Centrelink web site.
Assurance of Support Bond
The amount of the AoS Bond remains unaltered at this time.
For subclass 143 and 864 Contributory Parent visa applicants these amounts are:
However, from the 1st of April, 2019 the Bond amounts will increase to A$15,000 and A$6,000 respectively.
Commentary
With processing times for parent visas extending out well beyond 3 years for Contributory Parent visa applications these changes clearly have a retrospective effect on those who have parent visa applications in the system, awaiting allocation and assessment.
The Legislative Instrument has been issued under the Social Security portfolio, so it is not clear whether the Department of Home Affairs has been fully consulted – although we think it improbable the two Departments in question have not discussed this matter.
In the past Legislative Instruments have been disallowed – long time readers of this blog will recall the non Contributory Parent visas were initially disallowed by way of a similar process, but were reintroduced following a motion in the Upper House.
Those with families who are affected may therefore wish to make representations to their local Senator and Member in the House of Representatives.
We will keep you informed of any updates on this key issue.
The processing time for a visa application that is lodged under the Parent (subclass 103) or the Aged Parent (subclass 804) category is likely to be significant – at the present time we think this will be 30+ years.
All applications under these visa subclasses are assessed in order of lodgement with the Department of Immigration.
About 2 to 3 years after the submission of a visa application (based on present timelines) under subclass 103 or 804 applicants can expect to be asked to attend a medical examination and to arrange a police clearance certificate from each jurisdiction in which the applicant has been present for more than 12 months in the previous 10 years.
Once these health and character requirements have been satisfied the application will be assigned a queue date, and will be placed in the queue for the relevant visa subclass.
The Department of Immigration’s online queue calculator enables Parent and Aged Parent visa applicants with a queue date to determine how many people are ahead of them in the queue.
Applicants can then estimate the approximate time it will take to be considered for the granting of the visa, based on the number of visa grants available for the visa subclass in any one Migration Programme year.
Of course, changes to the number of visa grants in a Program year will affect the length of time an applicant will wait before they will be considered for visa grant.
As those who are applying for subclass 864 Contributory Parent visa applications will be acutely aware, there has been no allocation of applications under this subclass for over 9 months – the last lodgment date allocated for assessment has been stubbornly stuck on the 8th of September 2016 since the end of April 2017.
At that time a reasonable expectation for the processing time of a subclass 864 visa applications was 12 months at most.
Here we are in February 2018, and what can subclass 864 visa applicants reasonably expect?
We have been advised in the last few days to expect “modest progress” with the cohort of subclass 864 applications in the first part of 2018.
Also, that the processing timeline for subclass 864 visa applications is now apparently to be brought closer to that of subclass 143 visa applications – which as many will know has now blown out to over 3 years.
This is patently a change in the prioritisation of Contributory Parent visa applications, which has not – so far as we know – been made known generally.
Indeed, we think it improbable that the result of this decision will be to markedly reduce the timeline for subclass 143 visa applications.
In our opinion keeping applicants in the dark by not advising a change in processing priorities is treating applicants and their advisors with contempt. A lack of transparency antagonises parent visa applicants and their families who are anxiously waiting for some certainty about their loved ones.
The Parent Visa Centre has an auto generated email available to all who send a blank email to parents@homeaffairs.gov.au. Is it unreasonable to ask to be better informed as to processing expectations through this communication channel?
Come on PVC, you can do better than this!
