9.4.3.10 Assurer eligibility requirements - individuals

Summary

This section sets out the requirements an individual must meet in order to provide an AoS, including:

• residence requirements
• age requirements
• income requirements.

These requirements are set out in the Social Security (Assurances of Support) Determination 2018.

Note: The requirements a corporation or unincorporated body must meet to provide an AoS are outlined in 9.4.3.30 and 9.4.30.40. The requirements for individuals and organisations providing an AoS for a Community Support Program (CSP) entrant are outlined in 9.4.3.50.

Residence requirements

A prospective assurer must be an Australian resident as defined in SSAct section 7.

For joint AoS applications, all applicants must be Australian residents as defined in the SSAct.

Age requirements

A prospective assurer must be over the age of 18 years at the time of application.

For joint AoS applications, all applicants must be over the age of 18 years at the time of application.

Income requirements

The prospective assurer/s must meet the income requirements to give an AoS. The income requirements that apply will depend on:

• the number of assurers
• the number of dependent children of the assurer/s, and
• the number of adult assurees to be supported under the AoS.

The income requirements outlined below are only applicable to individuals giving an AoS and do not apply to bodies giving an AoS (see 9.4.3.30 and 9.4.3.40 for the requirements that apply to corporations, unincorporated bodies and state/territory agencies).

Note: Sole traders are considered individual assurers and are subject to the requirements for individuals, including the below income requirements.

To meet the income requirements, the prospective assurer/s must have income above the minimum threshold for their circumstances. If there is only one assurer, only the income of that person is assessed. For a joint AoS involving 2 or 3 assurers, the combined income of all the assurers is used in the assessment.

The minimum income threshold is equal to the sum of:

• the annual maximum basic JSP amount for each of the adults involved in the AoS, whether they are an assurer or assuree, and
• the annual base rate of FTB Part A plus the rate of FTB Part A supplement (as at 1 July of the current financial year) for any children under 18 years an assurer has.

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.

The prospective assurer/s must demonstrate a sustained minimum income for the current financial year (this is the year in which the AoS application was made) and either the previous financial year or the financial year before that (see section below).

'Assessable income' of a person for a financial year includes any one or a combination 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.

Note: A tax-free pension or benefit for the purposes of the AoS income requirements is as described in FAAct Schedule 3 clause 7. A non-taxable PhD living allowance is not covered by this clause and therefore cannot be assessed as income for a prospective assurer.

Evidence of income

The prospective assurer/s must provide evidence about their assessable income for each of the relevant financial years (see section below). Where a person cannot provide evidence of their assessable income for a particular financial year, their income will be taken to be nil for that year.

For the current financial year, the assurer/s must provide evidence about their assessable income for the part of the financial year up to the date on which the assurance is given, which may include the following:

• a document showing their gross income and period of service or employment, such as a payslip, group certificate, letter from their employer, or contract for service or employment, and/or
• a financial statement or other business record showing their gross and net business income for a specified period.

If applicable, documents showing payments of the kind mentioned above in the definition of assessable income should also be provided.

For either of the previous financial years, the assurer/s must provide the following evidence:

• a notice of assessment issued by the ATO in relation to the assurer/s and the year
• if the notice of assessment issued by the ATO does not disclose sufficient income to satisfy the minimum income requirement, then documents showing payments of the other income forming 'assessable income' mentioned above that have been paid to the assurer/s in that financial year.

If an assurer has not lodged a tax return for the previous year, a letter from their employer giving details about their employment, such as date of commencement of employment, amount of taxable income and contract of employment, is required. A self-employed person is required to provide a letter from their accountant. The person will have to provide a notice of assessment issued by the ATO for the financial year before the previous financial year.

Financial years

Evidence of income is required for the current financial year (the year in which the AoS application was made) and either the previous financial year (known as the first financial year) or the financial year before that (known as the second financial year).

Whether the first financial year or the second financial year is used will depend on the prospective assurer’s circumstances.

Generally, the first financial year must be used. However, there are 2 exceptions.

If the prospective assurer does not have the required evidence of income for the first financial year, the second financial year will be used.

If the prospective assurer has the required evidence of income for the first financial year but is able to demonstrate that their assessable income in that first financial year was reduced due to a temporary change in the circumstances, the second financial year can be used.

Note: The decision maker must be satisfied that the reduction in income was temporary. Evidence of a temporary change in circumstances could include but is not limited to, documentation from an employer specifying long-term parental leave, or a letter from a doctor or specialist describing the nature of an illness as temporary.

Limit on assurees for an individual

Individuals can only be an assurer (alone or jointly) for a maximum of 2 adult assurees at any one time (there is no limit on the number of child assurees). An individual may not give an AoS for an adult if:

• they have previously given an assurance for 2 adults (whether in a single assurance or 2 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 individuals providing an assurance for a CSP entrant – see 9.4.3.50.