An approved Assurance of Support is a requirement to be met prior to the granting of all permanent residency visas under Australia’s parent migration program. But what is an Assurance of Support? How much does it cost? And who can provide it?

An Assurance of Support – or AoS – is a legal commitment by a person (called the Assurer, who need not be the Sponsor, and does not need to be a member of the visa applicant’s family) to provide financial support to a person who is applying to migrate to Australia (the Assuree).

It is also a commitment to repay to the Australian Government certain welfare payments administered by Centrelink if amounts are paid by Centrelink to the Assuree during their AoS period.

An AoS lasts for:

• 10 years for Contributory Parent visa holders
• 2 years for Non Contributory Parent visa holders

The AoS period begins on:

• the date of visa grant, if the applicant is in Australia, or
• the date the visa holder arrives in Australia, if the applicant was outside Australia when the visa was granted.

For parent visas a financial bond is required as part of the process. This is a term deposit lodged with the Commonwealth Bank of Australia in order that a bank guarantee can be issued in favour of the Commonwealth of Australia.

The amount to be placed on deposit depends on whether the AoS is provided for a Contributory or Non Contributory Parent visa, and whether the Assurer is an individual or by a corporation:

For Contributory Parent visa applications (subclasses 143 and 864):

* Assurer is an Individual: A$10,000 for the main visa applicant, plus A$4,000 for all secondary visa applicants
* Assurer is a Corporation: A$10,000 per visa applicant

For Non Contributory Parent visa applications (subclasses 103 and 804):

* Assurer is an Individual: A$5,000 for the main visa applicant, plus A$2,000 for all secondary visa applicants
* Assurer is a Corporation: A$10,000 per visa applicant

Where the Assurer is an individual s/he must also pass an income test, which is confirmed by Centrelink at interview prior to the lodgment of the AoS bond.

The threshold level of income is a function of the following:

* The number of assurers, and
* The number of children of the assurer/s, and
* The number of adults to be supported under the AoS.

The Assurance of Support income test for individuals is discussed in detail with worked examples here.

At the current time:

* The New Start Allowance (NSA) for a single person with dependent children is A$14,869.40
* Family Tax Benefit (FTB) Part A plus the Part A supplement per child aged under 18 is A$2,251.51

E&OE – please check these amounts directly with Centrelink

Incorporated bodies are not required to meet an income requirement. However, when considering the AoS the person assessing must be satisfied that the incorporated body has not been set up for the sole purpose of providing an AoS.

For example, in most circumstances an incorporated body will be required to provide reliable and verifiable evidence (e.g. tax returns, correspondence from a registered tax accountant, a statement from ASIC) of consistent trading activity for at least two financial or calendar years prior to the date of AoS application to ensure the incorporated body has the capacity to support the Assuree.

If an incorporated body is set up immediately prior to the AoS application and/or the incorporated body has not been trading or is not trading, the AoS will not usually be accepted.

Note also that an Assurance of Support is not required when applying for the grant of a temporary Contributory Parent visa under subclasses 173 or 884; for such visas the AoS process is then required when applying for the permanent residency visa under subclass 143 or 864 respectively.

Applications for certain visas made while the visa applicant is in Australia give rise to the issuing of a Bridging Visa.

More specifically, those applying for a subclass 804 visa, a subclass 864 visa, or a subclass 884 visa – which can only be applied for when the visa applicant is in Australia – can reasonably expect to be granted a Bridging Visa A (“BVA”) when the visa application is receipted by the Parents Visa Centre.

A BVA permits the holder to remain in Australia lawfully for the duration of the processing of the visa application until it is finally determined, including any merits review should the application be unsuccessful at first instance.

It should also be noted that a BVA allows the holder to remain lawfully in Australia, but it does not allow the holder to re-enter Australia if s/he departs.

If the parent visa applicant who is the holder of a BVA wishes to leave Australia and return s/he should lodge an application for the granting of a Bridging Visa B with the Parent Visa Centre prior to departing Australia.

Applicants for a BVB must have substantial reasons for wanting to leave and return to Australia while the substantive visa application is being processed.

We have heard of BVBs being granted to individuals permitting a stay of a few years outside Australia. A validity period of such length may be particularly helpful for an individual applying for a subclass 804 visa where the processing time is likely to be 10+ years.

Those who are granted a BVA should also note that:

• The visa used to enter Australia prior to the application for the visa onshore – most commonly a visitor visa – should remain valid so long as the conditions of the visitor visa are satisfied. Most commonly this includes a permitted period of stay in Australia of up to 3 months. Once the permitted period of stay on the visitor visa is exceeded the BVA comes into effect, to allow the holder to remain lawfully in Australia.
• A BVA granted to an applicant for one of the parent visas noted above (subclasses 804, 864, and 884) does not have any conditions attaching to it. This means that once the BVA is in effect the holder is able to work in Australia.
• While BVBs are being granted quickly, the Department of Immigration recommends that those seeking a BVB apply no more than three months and not less than two weeks before the date on which the person wants to travel.
• It should also be noted that a Bridging Visa A or B can only be granted while an individual is physically in Australia.

The mechanics of applying for an onshore visa application are frequently more involved than a visa application that is lodged outside Australia, and in our experience the support of an experienced migration professional is valuable, and in some cases essential.

The Australian Government has released a report into Australia’s migrant intake, prepared by the Productivity Commission after an enquiry.

The report is challenging reading for any parents with Australian resident children, and who are considering a move to Australia.

Without wanting to be alarmist, we think there is a heightened risk of a significant increase in the cost of a Contributory Parent visa application in the not too distant future affecting new visa applicants, and the removal of the non-Contributory Parent visas to new visa applicants.

We say this in the light of comments in the Productivity Commission report, extracts of which follow.

(Page 27): The contributory visa charge of just under $50 000 meets only a fraction of the fiscal costs for the annual intake of roughly 7200 contributory parents. And an additional 1500 parents make a minimal contribution. Overall, the cumulated lifetime fiscal costs (in net present value terms) of a parent visa holder in 2015-16 is estimated to be between $335 000 and $410 000 per adult, which ultimately must be met by the Australian community. On this basis, the net liability to the Australian community of providing assistance to these 8700 parents over their lifetime ranges between $2.6 and $3.2 billion in present value terms.

RECOMMENDATION 13.9
The Australian Government should request the Australian Government Actuary to update its actuarial analysis of the long-term fiscal consequences of immigrants arriving under the parent visa stream, eventually incorporating all expenditures and revenues, including at the state and territory government level.

There is also a detailed narrative at pages 469 to 484 of the report , which includes the following observations from the Commission:

… there are strong grounds to reduce the existing very high subsidy rate for contributory visas by lifting the fee levels — say by roughly double in the first instance. As is currently the case, fees could be spread over several periods. This measure would gather more revenue, but also be likely to reduce demand — lowering the fiscal costs of this particular social policy. There are also grounds to reduce planning levels for contributory visas since this would also directly lower the net costs of the program, freeing up taxpayer funding for higher priority uses.

… reducing caps for contributory visas and a significant reduction in non-contributory visas might create a gap in visa types that might not be filled by the existing visitor visas. One option would be to create a longer-term visa class that allows a parent to stay for longer periods than standard in the visitor visa (subclass 600), and to periodically renew this visa. A new provisional visa would permit parents to stay for a longer period of (say) five years that could, after a given period of absence from Australia, be renewed multiple times. A condition would be that the parent or sponsor would have to guarantee that they could meet any income or health costs during their stays. In effect, a parent could stay permanently with periodic interruptions, so long as she or he were financially independent.

Regular readers of this blog will be aware that the Department of Immigration has already published details of a new temporary parent visa, which is due to come into effect on the 1st of July, 2017.

At a time when the Federal Government is seeking to repair its budget deficit a significant increase in the cost of Contributory Parent visas for new applicants, and a renewed effort to close the subclass 103 and 804 non Contributory Parent visa subclasses for new applicants should be no surprise in the light of the findings discussed above.

Concerned parents (or their children) who would like to lodge a parent visa application (whether Contributory or non Contributory) now to lock in the present scale of Visa Application Charges, or who would like to discuss visa strategy should feel able to complete the enquiry form on this page.

Go Matilda Visas will be pleased to discuss your situation with you, and how we might help progress and manage a visa application.

The Australian Government has announced the introduction of a new visa for the parents of Australian citizens and permanent residents.

The new visa is to be introduced from the 1st of July, 2017.

The Assistant Minister for Immigration and Border Protection has announced a period of consultation to “assist the Government with the final design of the new temporary visa and the legislative changes required to implement it.”

In this regard a Discussion Paper has been published by the Department of Immigration.

Public submissions are to be delivered by midnight on the 31st of October, 2016.

Key components of the intended new temporary parent visa are:

• The visa is to be a temporary residency visa, with most probably a validity period of 5 years.
• The sponsor will need to have been living in (and contributing to) Australia for a number of years. According to the Australian Government: “This will ensure sponsors have had sufficient time to become engaged with the Australian community and to contribute to Australia financially. A longer period of contribution in Australia would provide a higher priority in eligibility.”
• The sponsor will be required to show s/he can support the parents. This will include an assessment of income and assets.
• The sponsorship assessment will be a separate process, and will need to be completed before a visa application can be submitted. Sponsors will need to undergo a criminal history check, and to agree to a range of enforceable obligations.

• The balance of family test will not apply to this new visa.

• The new parent visa will have a requirement to maintain adequate health insurance requirement with an Australian insurance provider.
• A bond arrangement based on the current Assurance of Support scheme for the permanent parent visas is anticipated. The Australian Government advises that options for such a scheme “would need to consider the size of any potential debt that could be incurred, noting the Productivity Commission’s estimate of cumulative lifetime costs of each parent visa holder.”
• Bond options under consideration are:
  1. A contingent loan, similar to Australia’s Higher Education Loan Program. This could be applied where unpaid debts have accrued which would then be repaid through the income tax system
  2. An investment paid into a State or Territory Government Treasury Bond, likely to be similar to the present Designated Investments used with subclass 405 Investor Retirement visas and Investor visas generally under the business skills visa program. The investment would be returned when the visa ceases, less any amounts owing to the State or Territory health system.
  3. A legally binding agreement, enforceable by any person who is owed the debt.
• The new visa will require a Visa Application Charge to be paid, the level of which “will need to be set in consideration of the potential budget impact of temporary parent visa holders who will not be in the workforce.”

The Discussion Paper also advises that: “In order to apply for the new visa, it will not be necessary for the parent to have also applied for a permanent parent visa. Parents can however, continue to lodge a permanent visa application if they wish.”

This is helpful for parents of Australian citizens or permanent residents who are considering applying for a parent visa, as it indicates the Australian Government’s intention for permanent parent visa pathways to continue to be available.

It remains to be seen though whether these permanent parent visas will be in their present form; we presently think this is improbable, otherwise the temporary parent visa will be an unattractive alternative.

We are therefore recommending to all intending parent visa applicants that they progress an application at the earliest opportunity while a known pathway exists, as changes to parent visas are on the way and it is improbable that the requirements to be met in future will be easier than exist presently.

If you would like to discuss your parent visa strategy please complete the enquiry form on this page. Go Matilda Visas will be pleased to have an initial no obligation discussion with you.

This is a note to those who are intending to apply for subclass 804 Aged Parent and subclass 103 Parent visas: we think it is prudent to lodge your visa application sooner rather than later.

The Productivity Commission has reported to the Australian Government, and has suggested that the criteria for granting non contributory parent visas should be narrowed to cases where there are “strong compassionate grounds”.

The Productivity Commission report also said that elderly parents cost Australia anywhere between A$335,000 to A$410,000 each.

The Productivity Commission is an independent Commonwealth agency which is the Australian Government’s principal review and advisory body on microeconomic policy and regulation.

Those of us who advise parents on visa strategy will recall the abolition of the subclass 103 and 804 visas to new applicants by the Federal Government in mid-2014, only for a successful Disallowance Motion in the Upper House (the Senate) to lead to the re-introduction of these visa subclasses to new applicants in September 2014.

At a time when budget savings are a key issue for the Federal Government there is clearly a real risk of a renewed effort to close off the non Contributory Parent visa pathways.

We invite concerned intending parent visa applicants to contact Go Matilda Visas to discuss strategy: we can prepare and submit parent visa applications quickly and with the minimum of fuss.