Subclass 189 New Zealand stream – COVID affected income threshold

Amending legislative instrument from 14 November 2021

In previous posts, we wrote about the special permanent visa pathway set up from 1 July 2017 that is only available to New Zealand citizens. The visa is for New Zealand citizens in Australia that can demonstrate that they have made an economic contribution to Australia. It is the subclass 189 visa New Zealand stream.

The pathway is under utilised. The uptake rate is said to be only about 10% of those anticipated to apply for the visa. It is regrettable that few people seem to know about it, nor apply even though they are eligible.

Becoming an Australian permanent resident advantages most New Zealand citizens that live in Australia. They can become able to access some government benefits that they cannot get otherwise as subclass 444 Special Category visa holders. Many are interested in becoming an Australian permanent resident because that can enable them to become eligible for Australian citizenship.

A legislative instrument that makes it even easier for some New Zealand citizens to qualify for this special visa commenced in the beginning of the 2021 – 2022 financial year. We’ll explain this below.

On 14 November 2021 a different legislative instrument (with retrospective application from 1 July 2021) was released. It provides an exemption from reaching the minimum income threshold for those that were negatively impacted by the pandemic last year.

The purpose of this post is to explain some of the advantages of this special visa stream and then to explain the new legislation and how it will advantage some New Zealand citizens living in Australia.

Subclass 189 New Zealand stream

The New Zealand stream of the subclass 189 Skilled – Independent (Class SN) visa is arguably the best pathway to an Australian permanent visa. There are many reasons for this claim. Let’s consider just some of those reasons.

Points Test for Skilled Migration visas

Schedule 6D in the Migration Regulations 1994 awards points for various personal attributes of a potential visa applicant for a skilled visa. Prospective applicants get points for the duration of their relevant work experience; fluency in credentialled community languages; study in designated regional areas in Australia; and for other factors. As examples, an applicant will score 30 points if they are 31 years old but only 15 points if they are 41. A Bachelor’s degree will earn them 15 points, but a diploma, only 10.

The Department of Home Affairs gives invitations to apply for a visa to only the highest point achievers of the particular skilled occupation. The system enables the government to select from the best candidates. Lower scoring candidates are only invited if the government cannot fill all the places required for that occupation with the highest achievers.

This system creates some unintended consequences. Americans, Canadians, British, and Irish native English speakers don’t need to take an English language test. They are deemed to meet ‘Competent English’, but they score no points. To maximise their Points-Test score, they need to pay around $340 to sit an English language test designed for non-native English language speakers. It is hard to imagine they would need the test for any other purpose. They only hope to add 10 or 20 additional points to their score – even though they might never be invited to apply for a visa.

Similarly, an applicant without a spouse or a de facto partner will earn 10 points. One that has a non-Australian partner but who does not have at least ‘Competent English’ earn none. Applicants that claim 10 points for having no partner cannot later include their partner in their visa application. There is a tremendous incentive for such a potential visa applicant to claim that they are single. They might never score enough points otherwise, and never be invited to apply. If they ‘win the lottery’ by being invited to apply for a visa, they will face a heartbreaking dilemma.

The potential applicant would need to (permanently) break up or forgo the opportunity to apply for a permanent visa.

No need to lodge an Expression of Interest

The Points-Tested stream of the 189 visa requires potential visa applicants to initiate the process by completing a detailed and technical Expression of Interest. Applicants make claims about their attributes on the Points-Test and register their hope to be invited to apply for a Skilled visa using an online system.

The Expression of Interest process requires the potential applicant to nominate a particular skilled occupation. That occupation needs to be on the relevant skilled occupation list. They need to apply for and obtain a positive Skills Assessment from the relevant Skills Assessing Authority for that particular occupation. That takes time and has considerable costs. Most Skills Assessments cost more than a thousand dollars. If the skilled occupation list changes, they cannot be invited to apply for a visa and their investment (and hopes) will be lost.

The New Zealand stream is attractive because:

• It does not involve an Expression of Interest.
• New Zealand citizen applicants for this visa do not need to take an English test that they do not otherwise need.
• They do not need to break up with someone they love. Their partner can join their application as a secondary or dependent applicant regardless of their English language proficiency.
• They do not need a particular occupation that just happens to be on the list at the time invitations to apply for a visa are made.
• They do not need to maximise their points.
• They do not even need to be invited! They can apply for the visa whenever they meet the eligibility criteria have the appropriate documentation to apply.

A New Zealand citizen could be eligible for either stream of the subclass 189 visa. The stream that they should choose is obvious!

Visa application charges payable to the Australian government

At time of writing, it would cost $825 for the first instalment of the visa application charge for the primary applicant in the New Zealand stream. After processing, immediately before the visa is ready to be finalised, a further $3,290 is paid. They wind up paying $4,115 for the visa application charges. Other costs like police clearances and medical assessments also apply – as they do for all other permanent visa applications.

Most applicants for a Partner visa would need to pay $7,850 and those additional costs. That’s almost double.

A Business visa applicant in the Significant Investor stream would pay $8,925 for their initial (provisional) visa, and an additional $2,935 when it is time to apply for their permanent visa. That’s nearly triple!

There are only a few permanent visa subclasses that are cheaper than the subclass 189 New Zealand stream. Most are the same cost, or more expensive.

Expected processing time requirements

At time of writing, 90% of the visa applications lodged in the New Zealand stream are determined in 18 months. That probably sounds like a long time, but 90% of the visa applications lodged in the same subclass Points-Tested stream take 31 months. New Zealand citizens applying under the New Zealand stream would get their visas processed more than a year earlier than those applying in the Points-Tested stream.

By comparison, Subclass 188 visas in the Investor stream take 35 months, as do applications for a subclass 300 Prospective Marriage visa. Subclass 187 Regional Sponsored Migration Scheme visas take 45 months. 90% of onshore provisional Partner visas are processed in 32 months with an additional 17 months expected for the permanent Partner visa stage.

Superior permanent visas

You might be wondering which permanent visa subclasses are ‘better’ than the New Zealand citizen stream.

90% of subclass 190 Skilled – Nominated visas are processed in only 10 months, and they have the same $4,115 visa application charge. That sounds pretty good, but those applicants first need to lodge their Expression of Interest; have a job on the relevant skilled occupation list; pay for the Skills Assessment; usually need to take and pay for an English language test; and also meet the particular requirements of the State or Territory government that nominates them.

A Child visa applicant would pay only $2710 for their visa, and 90% of their visas if lodged onshore are processed in 17 months. That’s really good! Not many applicants are eligible for the visa though. They need to have an Australian permanent resident parent, and not have been included in their parent’s permanent visa application.

Former holders of Norfolk Island entry permits can apply for a $315 ‘Confirmatory Resident’ visa. 90% are processed in only 59 days! Obviously, it is a niche visa available to only a handful of people.

Considering the alternatives, it is apparent that the subclass 189 visa in the New Zealand stream is not a bad choice at all.

New legislative instruments

Prior to the release of this new instrument – the Migration (Income Threshold and Exemptions for Subclass 189 Visa (New Zealand Stream)) Amendment Instrument (LIN 21/048) 2021 – there was something rather odd. In May 2020, a legislative instrument was released to provide the minimum income requirements for the 2020 – 2021 income year. Few were surprised that the minimum taxable income was set at $53,900 again. It was set at that amount in 2013 – 2014, and has not changed since. But surprisingly, the COVID-19 concessions available for the 2019 – 2020 income year were not made available for 2020 – 2021. That meant that potential applicants that failed to meet the income threshold in the 2020 – 2021 income year and that had been impacted by the pandemic were not protected. Those impacted in 2019 – 2021 were.

Another aspect was even more problematic. In late July 2020, the Australian government announced an intention to make it even easier to qualify for the New Zealand stream. Instead of requiring 4 Income Tax Notice of Assessments in the previous 5 years at or above the minimum income threshold, only 3 would become required. That legislative change was implemented from 1 July 2021. But the new legislation required one of those three years to be the previous income tax year. Some potential clients fail to qualify because of this change. They might have qualified had they lodged their applications before the end of June. Contrary to the intention to make it easier, some have become ineligible!

Someone that could not meet the threshold in the 2020 – 2021 income year because pandemic repercussions were especially disadvantaged by the 1 July 2021 development. They might not have been able to meet the income threshold only because of the side effects of the pandemic. The new instrument amends the previous legislation to remove this anomaly to create an income exemption for the 2020 – 2021 income year too.

How these amendments impact upon you

The COVID-19 pandemic income concession is only available for one of the required income years. An applicant can claim an exemption in either 2019 – 2020 income year or in 2020 – 2021, but not in both.

Applicants cannot merely claim that the pandemic has impacted upon their income. They need to provide specific types of evidence. Applicants can provide evidence from both income years (because they felt the effects across both financial years) but are only required to provide evidence for the year for which they are claiming the exemption. The impacts might have commenced in 2019 – 2020 but they could claim the concession for 2020 – 2021.

In addition to the pandemic concessions, there are other exemptions for those involved in a parenting plan; those that have been injured; and those that were on an approved period of parental leave or carer leave. Please ask us for details.

Why choose Potts Lawyers to advise you

New Zealand citizens in Australia that think they might be eligible for the subclass 189 visa should contact us. We can assess their eligibility. We can explain the concessions in more depth and identify the specific evidence that will be required to meet the requirements to be granted an income exemption. By professionally preparing and lodging the application, the risk of making an inadvertent and costly mistake can be mitigated.

Potts Lawyers offers a no-obligation initial consultation. We can discuss timeframes and costs with you before you decide to proceed.

Contact our Immigration Lawyers Craig DoRozario or Tom Foran at the Potts Lawyers Immigration Law team to arrange your complimentary consultation. We look forward to hearing from you.