The Minister for Social Services, Dan Tehan, recently made changes to the Assurance of Support (AoS) scheme which will have a significant impact on those seeking to help family members migrate to Australia. An AoS is an assurance from an Australian resident that they will take financial responsibility for a new migrant during a set period, and will repay any social security payments received by the migrant during the period. The changes to the scheme will mean that there are much higher income requirements for those offering assurances. A spokesperson for the Minister stated that ‘the change will ensure Australia’s social security system remains sustainable’. 

The Assurance of Support scheme

The purpose of the AoS scheme is to ‘protect social security outlays while allowing the migration of people who might otherwise not normally be permitted to come to Australia’.  The scheme requires certain migrants with a high likelihood of requiring income support to hold an assurance of financial support by an Australian resident. An assurer assumes financial responsibility for the new arrival (the assuree) for the duration of the AoS period, and responsibility for the repayment of any recoverable social security payments received by the assuree during the AoS period. AoS requirements are separate from any visa fees or other visa conditions.

Recoverable social security payments are primarily working-age payments such as Newstart Allowance, Youth Allowance, Parenting Payment and Special Benefit as well as relevant supplements. The Age Pension has a ten-year Australian residency requirement so many older migrants are ineligible for this payment during their first ten years in Australia.

There are two types of AoS—mandatory/security required and discretionary/security not required. Where a visa applied for carries a mandatory AoS provision, the applicant must arrange for an acceptable AoS to be provided, including the lodgement of a security for the required amount by way of a bank guarantee. If the visa applied for carries a discretionary AoS requirement, the Department of Home Affairs will determine whether or not an AoS is required but no security lodgement is required.

Visas with a mandatory AoS include subclass 103-Parent, subclass 143-Contributory Parent and subclass 864-Contributory Aged Parent.

Duration of the AoS period

The AoS period commences the day the person is granted the visa or the day they enter Australia, whichever is later. The duration will depend on the visa subclass:

• for contributory parent visas (subclass 143 and subclass 864), the AoS period is 10 years
• for a subclass 202 (Global Special Humanitarian) visa under the Community Support Programme, the AoS periodis 12 months
• for all other visas, the AoS period is 2 years.

New determination

Many of the requirements for the AoS scheme are set out in a legislative instrument rather than in the Social Security Act 1991. The determination which made changes to the scheme is the Social Security (Assurances of Support) Determination 2018. It commenced on 1 April 2018 and replaced the Social Security (Assurances of Support) (DEEWR) Determination 2008 and the Social Security (Assurances of Support) (FaHCSIA) Determination 2007.

The 2018 Determination can be disallowed by a motion of the House of Representatives or the Senate.

New income requirements

The 2018 Determination significantly changes the way the income requirements are calculated. A person who gives an AoS is required to demonstrate a sustained minimum income for the current financial year and the two previous financial years with the minimum income threshold depending on the number of assurers, their partners and children, and the number of adults and children under the AoS.

Important changes to the calculation of the minimum income threshold include:

• using the Newstart Allowance income test cut-off amount (where Newstart Allowance rates are reduced to zero under the income test) for a single person with dependent children, rather than the Newstart Allowance payment rate. The cut-off is almost twice the rate of Newstart Allowance
• including adult partners of the assurer and their dependent children as factors in the calculation
• when including children as a factor, using a percentage of the Newstart Allowance income test cut-off rather than Family Tax Benefit Part A (FTB-A) rates.

Table 1 compares the different income requirements for those in similar circumstances based on the new requirements and previous requirements (using 1 July 2017 values).

Table 1: Assurance of Support income requirements under new and pre-1 April 2018 determinations, rates as 1 July 2017

 Source: Parliamentary Library estimates. 

Other changes

Other changes to the AoS scheme made by the 2018 Determination include:

• a 12 month AoS required for Community Support Programme entrants
• potential assurers must be in Australia at the time of making the application
• a person who has an outstanding debt due to the Commonwealth is not eligible to provide an AoS and
• from 1 April 2019 an increase in the value of securities required for a mandatory AoS.

Impact of the changes

The changes see a marked increase in the level of income required for those offering assurances of support to new migrants. This will, in effect, prevent some low and middle income families from sponsoring parents and other dependent relatives to move to Australia.

The changes may reduce the number of applicants for affected visa categories. There is currently strong demand for the limited number of parent visa places resulting in potential wait times of more than six years for Contributory Parent visas and more than 36 years for Non-Contributory Parent visas (based on 2016–17 statistics). In 2016–17, there were 6,218 Contributory Parent places granted and 1,345 Non-Contributory Parent places granted. As at 30 June 2017, there were 38,508 clients in the Contributory Parent ‘pipeline’ awaiting a place, and 49,735 clients in the Non-Contributory Parent pipeline. Contributory Parent visa applicants pay higher fees in exchange for shorter processing periods.

Chair of the Federation of Ethnic Communities Councils of Australia, Mary Patetsos, told Guardian Australia: ‘The additional costs will have a heavy financial impact on Australian families … Family reunion enhances successful settlement, promotes social cohesion and drives economic prosperity.’