9.4.3.30 Assurer eligibility requirements – corporations & state agencies

Requirements for corporations

If a corporation wishes to provide an AoS, it must be incorporated in Australia (within the meaning of the Corporations Act 2001) and intend to remain incorporated in Australia while any AoS given by the corporation remains in force.

When assessing the AoS, the Secretary (or their delegate) must be satisfied that the corporation has not been set up for the sole purpose of providing an AoS. In most circumstances, a corporation should provide reliable and verifiable evidence (e.g. tax returns, correspondence from a registered accountant, statement from ASIC) of consistent trading activity for at least 2 financial or calendar years prior to the date of AoS application. If the corporation is set up immediately prior to the AoS application and/or the corporation has not been consistently trading or is not trading, the AoS will not usually be accepted.

An AoS that is given by a corporation must be signed on behalf of the corporation by a person who is duly authorised in writing to sign the AoS such as a Director of a Company or a committee member of an association.

A corporation must not give an AoS jointly with another body, State agency or individual.

Partnerships and trusts cannot be an assurer. This is because only individuals and specified bodies (unincorporated associations, corporations and state/territory agencies) can give an AoS. Partnerships and trusts do not fall into any of these categories. However, trustees and beneficiaries of a trust can apply to be an assurer, so long as they meet the appropriate eligibility criteria. Similarly, members of a partnership may separately apply to be individual assurers (solely or jointly). If a partnership consists of 2 organisations, only one organisation can apply to be an assurer.

Note: Sole traders fall under the category of individual assurer, and are required to meet the individual income requirements to qualify for an AoS (9.4.3.10).

Financial capacity

Corporations must meet the financial capacity test for the Secretary to accept an AoS. To meet the financial capacity test, the corporation must meet one of the following:

• The corporation's profit from carrying on a business or businesses for the last 2 financial years before the current financial year was equal to the annual maximum basic JSP amount per adult assuree, or
• The corporation has at least $5,000 in readily available funds per adult assuree.

The annual maximum basic JSP amount is the fortnightly basic rate of JSP for a single person with dependent children (not including any supplements), as at 1 July of the current financial year, multiplied by 26.0714286. The current financial year is the year in which the AoS application was made. See Part 5 for payment rates.

For the purposes of the financial capacity test, readily available funds means the following:

• money in an account, or on deposit, with an authorised deposit taking institution within the meaning of the Banking Act 1959
• bank bills accepted, or endorsed, by such an institution
• marketable securities (within the meaning of section 9 of the Corporations Act).

If a company is an existing assurer and applies to provide a further AoS, they will need to show sufficient profit or readily available funds to cover both the existing assuree/s and new assuree/s as part of the new AoS application.

A corporation can also meet the financial capacity test if the Secretary (or their delegate) is otherwise satisfied that the corporation has the capacity to support the assurees receiving assurance under the AoS. The Secretary (or their delegate) may use their discretion on a case-by-case basis and this is not binding on subsequent decisions. Generally, a corporation should attempt to meet the above financial capacity tests.

Evidence of profit or readily available funds

Evidence of readily available funds can include any one or a combination of the following:

• tax return
• bank statement
• letter from a registered accountant, bank or similar entity
• proof of marketable securities.

Limit on assurees for a corporation

Corporations can only be an assurer for a maximum of 2 adult assurees at any one time (there is no limit on the number of child assurees). A corporation may not give an AoS for an adult if:

• the corporation has previously given an assurance 2 adults (whether in a single assurance or separate assurances), and
• each assurance either remains in force or the assessment of the application for the assurance is still pending, acceptance or rejection.

Note: Different limits apply to corporations providing an assurance for a Community Support Program entrant – see 9.4.3.50.

Securities provided by a corporation

For visas that carry a mandatory AoS requirement, corporations are required to provide a security in the form of a bank guarantee. For visas that have a discretionary AoS, there is no requirement for any security. The value of the security will depend on the length of the assurance period. The security will be deposited in the name of the corporation.

Debts incurred by a corporation

If an assuree assured by a corporation is paid a recoverable social security payment during the AoS period, the resulting debt will be raised against the corporation as a whole.

Example – corporation

State & territory government departments & local councils

There are reduced eligibility requirements for state agencies (including state/territory agencies, departments and local councils) wishing to provide an AoS.

An AoS that is given by a state agency must be signed on behalf of the state agency by a person who is duly authorised in writing to sign the AoS. Documentary evidence confirming that authorisation should be provided. The type of evidence may vary depending on the delegation arrangements in place within individual state/territory agencies, departments and local councils. This could include a formal instrument of delegation or letter from the Chief Executive Officer or head of the state agency.

A state agency must not give an AoS jointly with another body or individual.

The same limitations apply on the number of assurees a state agency can assure as for corporations (see above).

State agencies are not subject to income or financial capability tests and are also exempt from providing any security normally required for a mandatory AoS.