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Bills Digest No. 200  1999-2000
Migration Legislation Amendment (Parents and Other Measures) Bill 2000

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Passage History

Date Introduced: 7 June 2000

House: House of Representatives

Portfolio: Immigration and Multicultural Affairs

Commencement: Royal Assent. However, the measures contained in the Bill have differing application dates which are dealt with in the Main Provisions section of this Digest.

Purpose

To

• Amend the Health Insurance Act 1973 to specify the categories of visa for which applicants are eligible for Medicare
• Amend the Migration Act 1958 to accommodate an extension of the visa application charge regime in the Migration (Visa Application) Charge Amendment Bill 2000, and
• Amend the Migration Regulations 1994 to create two new visa classes for supported aged parents and to increase obligations relating to these visas in terms of assurance of support bonds and health insurance indemnification.

Background

User Pays Family Migration

Since federation, there have been arrangements for bonds and guarantees to compensate for potential financial burdens on public or charitable institutions in respect of new arrivals. Between 1927 and 1955 maintenance guarantees varied between 3, 5 and 10 years. Between 1955 and 1988 the guarantee regime was expanded to extend the duration of the guarantees to 10 years, to incorporate wider classes of migrants and to specify the particular costs, pensions and benefits that were to be recovered from guarantors. In 1982 maintenance guarantees were renamed 'assurances of support' (AOSs) in the administrative regime, but the name change was not formalised in legislation until 1987.⁽¹⁾

The regime covered family migrants (other than spouses and fiances) and accommodation, surgical and dental costs (except social security benefits other than special benefits). But from May 1988 the AOS regime was examined to investigate potential abuse and possible remedies.⁽²⁾ It was announced that a parliamentary committee would consider the potential for recovering unemployment benefits and incorporating a 'bonding system' to recover social and medical costs of the Commonwealth Government.⁽³⁾ In 1991, the AOS regime was revised to give effect to the proposal. The Migration Regulations were amended to:

• reduce the existing AOS period from 5 to 2 years
• restrict government liability to social security payments
• apply stricter means test on assurers
• improve debt recovery liaison between finance and social security departments, and
• introduce a refundable bond to cover eligible social security payments.⁽⁴⁾

The bond was $3500 for principal applicants and $1500 for each adult dependant. It would be offset against special benefits and unemployment benefits paid to the applicant within 2 years from the date when the s/he entered Australia or obtained the relevant visa (all other benefits and services were excluded). It was compulsory where an AOS was required.

In addition to the amended AOS regime, a 'migrant health services charge' (MHSC) was introduced. The Health Insurance Act 1973 was amended to impose a non-refundable charge to offset part of the cost associated with medical, hospital and pharmaceutical benefits.⁽⁵⁾ The charge was $822⁽⁶⁾ for each applicant and was compulsory where an AOS was required. It was also valid for 2 years and was paid in addition to the normal Medicare Levy.⁽⁷⁾ In 1997 the MHSC was absorbed into the inclusive 'visa application charge' (VAC) (see below).

Assurances of Support (AOSs)

AOSs are currently dealt with in Division 2.7 of the Migration Regulations 1994. An AOS has been described as a 'legal commitment by a person to repay to the Commonwealth of Australia any recoverable social security payments'.⁽⁸⁾ Once paid, recoverable social security payments become a debt owed by the assurer to the Commonwealth. AOSs are an essential criterion for permanent entry and stay and a discretionary criterion for most other visa classes and are generally required by 'any applicant assessed by DIMA as being at risk of becoming a charge on the Australian social welfare budget'.⁽⁹⁾

Migrant Health Services Charge (MHSC)/Visa Application Charge (VAC)

The MHSC is currently dealt with in terms of the visa application charge (VAC). The VAC was created by the Migration (Visa Application) Charge Act 1997 (VAC Act) through an amendment to the Migration Act 1958.⁽¹⁰⁾ It was introduced to 'simplify the processing of payments for visa applications by implementing a single visa application charge [to replace] the English Education Charge and the Health Services Charge'.⁽¹¹⁾ The VAC Act set a ceiling of $12,500 which was to be indexed according to CPI.⁽¹²⁾ The MSHC effectively became the 'second instalment' of the VAC, payable before grant of the visa.

Capping

The Minister has the power to 'cap' or limit the number of visas which can be granted in a particular subclass in a given year.⁽¹³⁾ He or she also has the power to consider and dispose of applications in any order he or she considers appropriate.⁽¹⁴⁾ Once a cap is reached, applicants 'wait in a queue for the visa to be granted ... in a following year, subject to places becoming available'.⁽¹⁵⁾ As at 31 January 1999 the queue for parent visas was around 19,660.⁽¹⁶⁾ This reflects the lower priority given to parents and aged dependant relatives in terms of departmental policy⁽¹⁷⁾ and the cap set for parent visas (see figure below).

Migration Regulations

There is some history behind the regime for assurances, bonds and guarantees. Since the AOS scheme was introduced, a number of amending regulations have been made to expand upon the regime, by increasing the classes of visas for which AOSs are mandatory or by enlarging the number of social security payments which may be offset against the AOS. However, they have been disallowed on a number of occasions, leaving a patchwork of regimes depending on the nature of the regulations in place at any given time.

Overview

The Second Reading Speech identifies one set of (disallowed) regulations as the catalyst and template for the revised AOS regime proposed in the Bill: the Migration Amendment Regulations 1998 (No. 8) (SR 1998 No. 285). These regulations introduced income testing for assurers (where AOSs were an essential criterion), increased the AOS bond payable in respect of principal applicants from $3,500 to $4,000 for applications made on or after 1 November 1998,⁽²⁰⁾ and effectively increased the MHSC for adult applicants to $5,000.⁽²¹⁾

They also created new visa classes and subclasses as per the following table:

Substance

The new income testing requirements obliged the assurer to:

• provide 'sufficient direct or indirect financial assistance to ensure that the applicant will not rely on any form of support mentioned in sub-regulation 2.38 (1) [of the Migration Regulations]',⁽²²⁾
• have a taxable income for the two years preceding the application which 'is at least equal to the amount that would be the person's income free area under point 1069-H28 of the Social Security Act 1991'.⁽²³⁾

The new visa classes contained the following key criteria:

These subclasses effectively incorporated applications made under existing subclasses. Thus, the Parent (Residence) (Class BP) visa required that applications have been made under Family (Residence) (Class AO) or General (Residence) (Class AS).⁽²⁶⁾ Subclass 114 (Aged Dependant Relative) effectively incorporated existing applications made under Subclass 103 (Parent), Parent (Migrant) (Class AX).⁽²⁷⁾

Rationale

The revisions were based on a desire to minimise costs to the Budget. According to the Government, research had shown that older, less skilled migrants 'tend to be a net cost to the Budget' and that these costs, 'unlike most other categories of migrants' tended to rise over time.⁽²⁸⁾ Moreover, 'with the projected aging of Australia's population over the next 20 years' these costs were likely to 'take on a more critical dimension'.⁽²⁹⁾

At the same time, there was recognition that parents and other aged migrants 'make a major contribution to society' in terms of the support they provide to relatives.⁽³⁰⁾ The question was the appropriate balance between the benefits and the costs and the issue was the appropriate sharing of these costs between sponsors, applicants and taxpayers.

Clearly, the most significant features of the disallowed regime were the income testing requirements, the new visa classes and the increase in the visa application charge. The AOS bond increase was only intended to 'bring [the bond] to approximately that level which it would have been had it been indexed from the time in was introduced in 1991'.⁽³¹⁾

These regulations were gazetted in September 1998 and were intended to commence on 1 November 1998. However, they were disallowed by the Senate on 31 March 1999.⁽³²⁾

In November 1999, at the first opportunity,⁽³³⁾ new regulations were made to accommodate applicants under the disallowed regime. The Migration Amendment Regulations 1999 (No 14)⁽³⁴⁾ enabled applicants who had a valid application outstanding for an Aged Parent visa (made between 1 November 1998 and 30 March 1999) 'to be considered under new, similar visa classes'⁽³⁵⁾ (if they applied between 1 November 1999 and 28 April 2000).

The new visa classes contained the following key criteria:

They were gazetted on 27 October 1999 and commenced on 1 November 1999.

The new regulations pick up most applications made under the disallowed regulations. Both subclasses largely replicated the criteria in the previous Aged Parent subclasses. In both subclasses, applicants obtained credit for their first VAC instalment. However, neither dealt with applications made under Subclass 114 (Aged Dependant Relative). This subclass was dealt with in the Migration Amendment Regulations 1999 (No. 13) which re-introduced Subclass 114 (Aged Dependant Relative), Other Family (Migrant) (Class BO) without any arrangements for applications between 1 November 1998 and 30 March 1999.

Health Insurance Act

Similarly, there is some history behind the treatment of health insurance. As indicated, originally, there was provision for recovery of limited health costs in the maintenance guarantee regime and the early AOS regime. However, when the MHSC was introduced, existing arrangements for recovery of limited health costs were abolished because they were considered 'outdated and not operating effectively'.⁽³⁷⁾ At the same time, depending on their circumstances and how long they had been in Australia, many visa applicants were able to access public health services under the Health Insurance Act 1973.

In 1988, as part of a wider agenda, the Commonwealth Government proposed to tighten eligibility to Medicare entitlements to 'exclude a range of people such as visa overstayers, illegal immigrants and the like'.⁽³⁸⁾ The corollary was that the Government would 'concentrate on extending its network of reciprocal health care agreements'.⁽³⁹⁾ This was considered to be consistent with the restrictions applied to eligibility for social security benefits and veterans' entitlements (waiting periods, etc) that were made in 1987.⁽⁴⁰⁾

The increasing restrictions on migrant eligibility for Medicare are reflected in amendments to the definition of 'Australian resident' in the Health Insurance Act 1973. Originally, the definition was fairly inclusive, incorporating any person who had been in Australia for more than six months.⁽⁴¹⁾ It was subsequently changed to incorporate any person who was 'ordinarily resident' or domiciled in Australia.⁽⁴²⁾ In 1988 the definition was confined to a person who has a temporary visa, has applied for a permanent visa and who was, in the Secretary's opinion, 'more likely than not' going to be granted territorial asylum or given refugee status or able to establish strong compassionate or humanitarian grounds for a permanent visa.⁽⁴³⁾ (Discretion existed where the person had an authority to work or had a close relative who held a permanent visa.)

A further restriction was proposed in 1992 by the Joint Standing Committee on Migration Regulations. The Committee had heard in evidence and submissions that there had been abuses of the public health system by visa applicants.⁽⁴⁴⁾ It recommended that the definition of 'Australian resident' be amended to prevent persons with temporary entry permits from gaining access to Medicare, subject to exceptions in specified cases such as temporary visas for spouses and asylum seekers.⁽⁴⁵⁾ In principle, the Government accepted the recommendation, but chose to implement it through delegated legislation by making separate orders under section 6 of the Act.⁽⁴⁶⁾

Main Provisions

Schedule 1 - Medicare Eligibility

Schedule 1, item 2 confines the definition of 'Australian resident' as it extends to migrants. Item 2 extends the definition to expressly include a person who holds a temporary protection visa. However, it excludes from the definition any person who has an application for a protection visa or parent visa (see below) that is not 'finally determined'. References to territorial asylum, refugee status and strong compassionate or humanitarian grounds are removed as is the discretion based on the 'more likely than not' test. In other words, these considerations are irrelevant and only the remaining conditions (authority to work and relative holding a permanent visa) apply.

Items 5, 6 and 7 insert definitions of 'parent visa', 'protection visa' and 'temporary protection visa'. The definitions are self-explanatory, except that 'parent visa' effectively incorporates a range of other visas where a nomination or application has been made by an adult child of the person (see below).

Schedule 1 commences on a date to be fixed by proclamation or six months after the Bill receives Royal Assent.

Schedule 2 - Visa Application Charge

Schedule 2 omits from the Migration Act 1958 a reference to a particular section of the Migration (Visa Application) Charge Act 1997 dealing with the visa application charge limit. In this way, the Migration Act 1958 is better able to accommodate an extension of the VAC regime in the Migration (Visa Application) Charge Amendment Bill 2000.

Schedule 2 commences, or will be taken to have commenced, immediately after the commencement of the Migration (Visa Application) Charge Amendment Act 2000.

Schedule 3 - Migration Regulations

Schedule 3 amends the Migration Regulations 1994.

Items 1 and 2 provide that the Minister may specify a benefits arrangement or class of benefits arrangements under the National Health Act 1953 as 'satisfactory private health insurance cover' (SPHC) for the purposes of the Migration Regulations 1994.

Items 5 to 9 establish criteria relating to two new visa (sub) classes:

The other criteria largely replicate the criteria applying to previous visa classes. These subclasses effectively incorporate applications made under existing subclasses by crediting applicants with their first VAC instalment. Thus, Supported Aged Parent (Migrant) (Class CA) incorporates Parent (Migrant) (Class AX) and Supported Aged Parent (Residence) (Class DA) incorporates Parent (Residence) (Class BP), Family (Residence) (Class AO) and General (Residence) (Class AS).

Items 3 and 4 amend the AOS regime applying to these new classes to increase the period from 2 to 10 years and to increase the bond payable in respect of principal applicants from $4000 to $10,000.⁽⁴⁷⁾ (The previous bond regime is partially reinstated.⁽⁴⁸⁾)

Schedule 3 commences on a date to be fixed by proclamation but not before the commencement of the Migration (Visa Application) Charge Amendment Act 2000. If that Act does not commence within 6 months of Royal Assent being given to the present Bill, Schedule 3 is repealed. Otherwise Schedule 3 commences 7 months after Royal Assent.

Concluding Comments

There have been a number of concerns posed in relation to the measures in this Bill. One relevant concern, raised in respect of the Migration Amendment Regulations 1998 (No. 8), was that applicants under the new classes would be given higher priority than those under the old classes and that those who could afford the increased VAC and AOS bond would 'basically get into the fast lane while the rest have to wait in the longer queue'.⁽⁴⁹⁾ In effect, the regime was seen by some as discriminating against disadvantaged applicants.⁽⁵⁰⁾

Whatever the merits of the proposed measures, it is at least possible that concern could be directed to the process adopted by the Bill. As indicated, Schedule 3 directly amends the Migration Regulations 1994. While the process of using principal legislation to amend subordinate legislation is unusual⁽⁵¹⁾ it would seem to be valid.⁽⁵²⁾ But the approach is not standard practice and may cause unintended difficulties. Thus, the Amending forms manual, prepared by the Office of Parliamentary Counsel, contains this exhortation:⁽⁵³⁾

One of the 'compelling reasons' given by the manual refers to situations where regulations need to apply retrospectively in a way that adversely affects a person's rights or imposes new liabilities. Such regulations would ordinarily be ultra vires if made by a Minister.⁽⁵⁴⁾ There is nothing to suggest that such a situation exists in this case.

No justification has been given in the Second Reading Speech or Explanatory Memorandum. Arguably, given the history of the proposed changes, the unusual approach could be justified on the basis of a desire to avoid possible uncertainty and delay surrounding disallowance of regulations following passage of the other main provisions. Alternatively, it could be motivated by a desire to place the issue of user pays family reunion squarely in the parliamentary arena.

The second key issue raised above is the need to ensure that the regulations amended by the Bill remain regulations for the purposes of future amendment and repeal. The issue is the possibility that regulations inserted by legislation could themselves be characterised as legislation with the effect that they could not be amended except by further legislation. It is worth noting that subclauses 3(2) and (3) of the Bill provide that the amended regulations remain regulations and may still be amended by the Governor General.

Endnotes

1. Statute Law (Miscellaneous Provisions) Act 1987, Schedule 1.
2. A significant number of people defaulted on their assurance with the result that an estimated 7% of migrants subject to AOSs received special benefits costing around $9m. Around $7.2m in unemployment benefits was paid per annum to migrants who were subject to AOSs.
3. Senator The Hon Robert Ray, 'Committee to Advise on Australia's Immigration Policies', Senate, Debates, 8 December 1988, p. 3757
4. Migration Regulations (Amendment) SR 1991 No. 60.
5. Migration (Health Services) Charge Act 1991.
6. The charge was indexed to the CPI.
7. Often, in the migration context, the MHSC is called the 'Medicare Levy'.
8. Department of Immigration and Multicultural Affairs website at http://www.immi.gov.au/allforms/skl-aos.htm [19/6/00].
9. Department of Immigration and Multicultural Affairs website at http://www.immi.gov.au/allforms/skl-aos.htm [19/6/00].
10. Migration Act 1958, Section 45A.
11. Migration Legislation Amendment Bill (No. 3) 1996, Migration (Visa Application) Charge Bill 1996 and Immigration (Education) Charge Amendment Bill 1996, Second Reading Speech, Senator The Hon Ian Campbell, Senate, Debates, 5 February 1997, p 90.
12. Section 5(1).
13. Migration Act 1958, s 85.
14. Migration Act 1958, ss 51 and 91.
15. Department of Immigration and Multicultural Affairs, 'Managing the Migration Program', DIMA Fact Sheet 21 at
    http://www.immi.gov.au/facts/21manage.htm [26/6/00].
16. Jon Marsh, 'Immigrants' parents "will die waiting", government warned', Sydney Morning Herald, 11 March 1999, p 3.
17. 'Higher priority is given to immediate family categories such as dependant children, spouses, fiance(e)s and interdependant partners of sponsors in Australia. Lower priority is accorded to all other Family Stream applicants such as parents, aged dependant relatives and last remaining relatives': DIMA Fact Sheet 21, op cit.
18. Source: Department of Immigration, quoted in Marsh, op cit.
19. In the Appendix, not every provision in the Regulations nominated in the left hand column was disallowed in each successful disallowance motion.
20. Sub-regulation 6. The bond payable for dependant applicants was increased from $1,500 to $2,000.
21. Sub-regulations 7.2, 7.3 and 7.6, increasing the 'second instalment' of VAC.
22. Sub-regulation 4 (emphasis added). The forms of support in regulation 2.38 were: job search allowance, newstart allowance, special benefit, widow allowance, partner allowance, and parenting allowance payable under the Social Security Act 1991 and youth training allowance payable under the Student and Youth Assistance Act 1973.
23. Sub-regulation 5.
24. Basically this requires the sponsor to undertake to provide financial support and accommodation for the first two years of the applicant's stay in Australia: Migration Regulations 1994, regulation 1.20.
25. Basically this requires either that at least half of the parent's children live in Australia or that more children live in Australia than any other single country: Migration Regulations 1994, r 1.05.
26. In order to qualify for a Parent (Residence) (Class BP) visa an applicant had to have a valid application for a Subclass 410 (Retirement) visa or a Family (Residence) (Class AO) or General (Residence) (Class AS) visa outstanding before 1 November 1998. In addition, the applicant would obtain credit for his or her first VAC instalment under the other visa.
27. An applicant for an Other Family (Migrant) (Class BO) visa who had a valid application for a Parent (Migrant) (Class AX) visa outstanding before 1 November 1998 would also obtain credit for his or her first VAC instalment under the other visa.
28. Explanatory Statement, Migration Amendment Regulations 1998 (No 8), SR 1998 No. 8, p. 3.
29. ibid.
30. ibid.
31. ibid, p. 6.
32. Speeches on the disallowance motion are at the following URLs:

• Senator Bartlett:
• Senator Schacht:
• Senator Harradine:
• Senator Patterson:
• Senator Margetts:
• Senator Bartlett:

33. Once disallowed, no regulation 'being the same in substance as the regulation so disallowed' can be made within 6 months of the disallowance: Acts Interpretation Act 1901, s 49.
34. SR 1999 No. 260.
35. Explanatory Statement, Migration Amendment Regulations 1999 (No 14), SR 1999 No. 260, p. 1.
36. Applicants did not need to make a new application: it was sufficient that they accepted an invitation by the Minister to apply for the new subclasses.
37. Migration (Health Services) Charge Bill 1991, Second Reading Speech, The Hon Gerry Hand, House of Representatives, Debates, 7 November 1991, p. 2642, at [10/6/00].
38. Community Services and Health Legislation Amendment Bill (No. 2) 1988, Second Reading Speech, The Hon P Staples, House of Representatives, Debates, 10 November 1988, p 2844.
39. Community Services and Health Legislation Amendment Bill (No. 2) 1988, Second Reading Speech, The Hon P Staples, House of Representatives, Debates, 10 November 1988, p. 2844.
40. Social Security and Veterans' Entitlements Amendment Act 1987.
41. Health Insurance Act 1973 (Reprinted as at 31 March 1981), s 3(1).
42. Health Insurance Act 1973 (Reprinted as at 1 January 1988), s 3(1).
43. Community Services and Health Legislation Amendment Act (No. 2) 1988, s 7.
44. Joint Standing Committee on Migration Regulations, Conditional Migrant Entry: The Health Rules, December 1992. In submissions and evidence it was suggested that as some non-citizens were accessing Medicare and generating unrecoverable debts, for example by using a relative's or friend's card, 'the potential exists for significant abuse of Australia's health system by illegal entrants and temporary residents ineligible for Medicare benefits' at p. 95.
45. ibid, Recommendation 20, p. 97.
46. Senator The Hon. Chris Schacht, Senate, Debates, 29 November 1995,
    p. 4217 at [20/6/00]. Section 6 allows the Minister to declare certain persons or class of persons to be eligible or ineligible for Medicare in spite of the remaining provisions in the Act.
47. The bond payable for dependant applicants is increased from $2000 to $3500.
48. That is, where the assurance does not relate to one of the new visa classes, the bond payable is $4000 for principal applicants and $1500 for each adult dependant: sub-regulation 4(4)(b) and 4(5)(b).
49. Senator Andrew Bartlett, Senate, Debates, 31 March 1999, p. 3667 at [26/06/00]. This point was reiterated by Senator Chris Schacht, Senate, Debates, 31 March 1999, p. 3669 at [26/06/00].
50. Senator Chris Schacht, Senate, Debates, 31 March 1999, p. 3669 at [26/06/00], Senator Brian Harradine, Senate, Debates, 31 March 1999, p. 3669 at [26/6/00].
51. The author was able to find only a handful of occasions where primary legislation was used to amend subordinate legislation:

• sale of Commonwealth owned corporations (CSL Sale Act 1993 No. 88 of 1993, ANL Sale Act 1995 No. 136 of 1995, Snowy Mountains Engineering Corporation Limited Sale Act 1993 No. 54 of 1993, Qantas Sale Act 1992 No. 196 of 1992, Aerospace Technologies of Australia Limited Sale Act 1994 No. 144 of 1994)
• omnibus amendments (Tax Law Improvement (Substantiation) Act 1995, Health Insurance Commission (Reform and Separation of Functions) Act 1997, Freedom of Information Laws Amendment Act 1986 No. 111 of 1986, Sales Tax Laws Amendment Act (No. 2) 1985 No. 144 of 1985, Sales Tax Laws Amendment Act 1986 No. 99 of 1986, Sales Tax Laws Amendment Act (No. 3) 1990 No. 131 of 1990, Taxation Laws Amendment Act (No. 2) 1986 No. 49 of 1986, Taxation Laws Amendment Act (No. 4) 1986 No. 154 of 1986, and Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 1999).
• amendment of ordinances in the Territories (Arts, Environment And Territories Legislation Amendment Act 1992 No. 130 of 1992)

52. As a principle of parliamentary sovereignty, whatever legislative powers the parliament may delegate it must surely be able to exercise in its own right.
53. Office of Parliamentary Counsel, Amending forms manual, February 1999, para 38 at http://www.opc.gov.au/about/documents.htm [26/6/00].
54. Acts Interpretation Act 1901, subsection 48(2).

Appendix: Relevant Regulations and Disallowances since 1994

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