As many will know, an Assurance of Support (“AoS”) is a requirement of all permanent parent visas:
- Subclass 143, Contributory Parent
- Subclass 864, Contributory Aged Parent
- Subclass 103, Parent
- Subclass 804, Aged Parent
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:
- A document showing the Assurer’s gross income and period of service or employment, such as a payslip, group certificate, letter from the person’s employer, or contract for service or employment, and/or
- A financial statement or other business record showing the person’s gross and net business income for a specified period.
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:
- Taxable income,
- Target foreign income,
- Tax free benefit or pension,
- Adjusted fringe benefits total,
- Tax-free salary received during overseas deployment as a member of the Australian Defence Force or Australian Federal Police
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:
- The number of assurers (up to a maximum of 3 assurers), plus
- The number of partners of the assurers, plus
- The number of adults who are being supported under the AoS (up to a maximum of 2 assurees).
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.
Here are some examples of the new income requirement, based on the current NSA income cut-off amount of $29,430.47.
- One person (who has a partner) giving an AoS for two adults: the income requirement will be $117,721.88, being the applicable NSA income cut-off amount multiplied by the total number of adult assurer, assurer’s partner and adult assurees – ie x 4
- Two people (who each have a partner) give an AoS for 2 adults: the income requirement will be $176,582.82, being the applicable NSA income cut-off amount multiplied by the total number of adult assurers, assurers’ partners and adult assurees – ie x 6
- One person gives an AoS jointly with his partner for 2 adults: the income requirement will be $117,721.88, being the applicable NSA income cut-off amount multiplied by the total number of adult assurers and adult assurees – ie x 4
- One person with 2 children applies to give an AoS for a migrating family of 2 parents and 2 children, the minimum required income amount of the assurer is the total of:
- $88,291.41, being the applicable NSA income cut-off amount multiplied by the total number of adult assurer and adult assurees – ie x 3, plus
- $11,772.20, being 10% of the NSA income cut-off amount multiplied by the total number of the assurer’s children and the assurees’ children – ie x 4
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:
- Primary applicant – A$10,000
- Secondary applicant – A$4,000
However, from the 1st of April, 2019 the Bond amounts will increase to A$15,000 and A$6,000 respectively.
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.