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Australian Government Department of Families, Housing, Community Services and Indigenous Affairs

International Involvement

Social Security Payments - Residence Criteria


Background - a residence-based system

The Australian income support system differs from those of most other developed countries, in that it is funded from general revenue, rather than from direct contributions by individuals and employers. Instead of reflecting the level and duration of contributions into a social insurance fund, Australian income support is based on residence and need.

In general, a person must be an "Australian resident", as defined in the Social Security Act 1991, in order to qualify for Australian social security payments. An Australian resident is a person who resides in Australia and has permission to remain permanently—either because they are: an Australian citizen; the holder of a permanent visa; or a protected Special Category visa holder (as described below).In deciding whether a person is residing in Australia, factors such as the person's domestic, financial and family ties to Australia are taken into account, as well as the frequency and duration of any absences from Australia and the reasons for such absences.

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Residence and New Zealand citizens

Before 26 February 2001, holders of Special Category visas (ie New Zealand citizens entering Australia under the Trans Tasman Travel Arrangements) could meet the definition of an Australian resident if they were residing in Australia and likely to remain permanently.

New Zealand citizens may enter Australia as holders of Special Category visas, or as holders of permanent visas under the Migration Program (ie as if migrating from any other country). A Special Category visa is granted to a New Zealand citizen who does not hold a visa on arrival in Australia, and who presents their New Zealand passport. From 26 February 2001, holders of Special Category visas are no longer able to satisfy the definition of an Australian resident for income support purposes, unless they belong to a "protected" group. However, holders of Special Category visas who are residing in Australia can receive family assistance and concession cards for low-income earners.

The protected groups include Special Category visa holders who:

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Exceptions to the residence rules for income support

The principle that only Australian residents should qualify for social security payments is fundamental to the Australian income support system. Exceptions to this principle are limited to Special Benefit (the "payment of last resort") and family payments (comprising Family Tax Benefit, Maternity Allowance, Maternity Immunisation Allowance, Child Care Benefit and Double Orphan Pension).

Under social security law, the Minister for Families, Community Services and Indigenous Affairs has powers to make determinations to allow the holders of particular temporary visas to meet the residence requirements for Special Benefit. These powers exist to cater for situations where Australia has a legal or moral obligation to provide social security assistance to a particular class of people, even though those people do not have permission to remain permanently in Australia. Currently, such determinations are in force for nine types of temporary visa: subclasses 309 and 820 (spouse, provisional); subclasses 310 and 826 (interdependency, provisional); subclass 785 (temporary protection); subclass 786 (humanitarian concerns); subclass 447 (Secondary Movement Offshore Entry); subclass 451 (Secondary Movement Relocation); subclass 695 (Return Pending); subclass 787 (Witness Protection (Trafficking) (Temporary); Subclass 070 (Bridging Removal Pending) and Criminal Justice Stay visas relating to the offence of people trafficking, sexual servitude or deceptive recruiting.

Since 1 July 2000, the residence requirements for Family Tax Benefit and other family assistance payments are also satisfied by a person who is not an Australian resident, if the person satisfies the residence requirements for Special Benefit. The family assistance provisions link directly to the Minister's determination on Special Benefit (referred to above), so that the Minister no longer needs to make separate determinations for these payments.

The Minister has no power to make exceptions to the residence rules on an individual or case-by-case basis. Exceptions can only be made for an entire class (or subclass) of visa by ministerial determination.

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Periods of qualifying residence

In addition to the requirement to be an Australian resident at the time of claiming, some social security payments (generally, the "pension" type payments which are intended as long-term support) require that a person has been an Australian resident for a certain period of time. For example, to qualify for Age Pension generally a person must have ten years residence in Australia. This residence requirement is called a "qualifying residence requirement" for social security purposes. These ten years can be made up of periods of residence at any time in a person's life, as long as at least one period is more than five continuous years. Other payments with prior residence requirements include Disability Support Pension (ten years), Parenting Payment (two years) and Widow Allowance (two years).

The purpose of the long residence requirements for Age and Disability Support Pensions is to ensure that these payments for the long-term contingencies of life are only granted to people who have a genuine, long-term connection with Australia. This is necessary to protect Australian Government funds, which come from general revenue.

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Exemption from periods of residence

Asylum seekers who are assessed as genuine refugees and who are granted permanent visas on this basis are exempt from the qualifying residence requirements for income support payments. The Social Security Act definition of a refugee includes all people who were granted permanent residence under the Humanitarian Program – that is, those granted Refugee, Special Humanitarian or Special Assistance Category visas. To protect their access to benefits, such people continue to be defined as refugees for social security purposes, even if they cease to hold a Humanitarian Program visa (eg, if they become Australian citizens).

This "qualifying residence exemption" recognises that refugees have not had the same freedom of choice as other migrants, when making the decision to come to Australia. Refugees are not, however, exempt from the basic requirement to be an Australian resident at the time of claiming a payment.

A person does not need to meet the prior residence requirements for Disability Support Pension if their disability occurred while they were an Australian resident. Similarly, a woman who is widowed while she and her partner were both Australian residents does not need to wait two years for access to Widow Allowance. An Australian resident who becomes a sole parent in Australia has immediate access to Parenting Payment Single (previously known as Sole Parent Pension) subject to meeting income and assets tests.

A person is exempt from the qualifying residence requirements for the Age Pension if the person:
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Newly arrived resident's waiting period

Some payments (generally, the "allowance" type payments which are intended as shorter-term income support) do not have prior residence requirements, but instead have a "newly arrived resident's waiting period". Technically, this means that a person may meet all the qualification criteria for the payment, but it may not be "payable" to them because of the waiting period. In practice, from the claimant's point of view, the effect of the prior two year residence requirements and of the newly arrived resident's waiting period requirement is effectively the same.

A newly arrived resident's waiting period applies to people who have not been Australian residents and in Australia for a period of, or periods totalling, 104 weeks (ie two years). Periods spent in Australia, as an Australian resident, at any time in a person's life can be counted towards the waiting period.

Payments with a newly arrived resident's waiting period include Newstart Allowance, Mature Age Allowance, Partner Allowance, Youth Allowance and Austudy Payment, Sickness Allowance, Carer Payment and Special Benefit. The waiting period also applies to the Health Care Card, the Commonwealth Seniors Health Care Card and Mobility Allowance.

There is no waiting period for family payments. These payments are available to all Australian residents (and holders of special category visas and prescribed temporary visas, as described above), if they have children in their care and meet the relevant income tests.

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Exemptions from the newly arrived resident's waiting period

Exemptions according to migration category

As with the periods of qualifying residence for pensions (and for certain other payments), refugees are exempt from the newly arrived resident's waiting period. Their immediate family members (partners and dependent children) are also exempt, as long as they were the refugee's family members at the time the refugee first came to Australia. This policy recognises the fact that the sponsored family members of refugees have often been in refugee-like situations themselves, and will face the same sorts of settlement barriers.

The former holders of spouse and interdependency provisional visas (subclasses 309, 310, 820 and 826) are also exempt from the newly arrived resident's waiting period (and from the two year residence requirement for Parenting Payment and Widow Allowance), once they hold a permanent visa. This policy recognises the fact that, in general, these people have already spent two years living in Australia before being granted permanent residence.

"Innocent illegals"—that is, the holders and former holders of visa subclasses 832 and 833—are also exempt from the newly arrived resident's waiting period for all payments (and from the two year qualifying residence requirement for Parenting Payment and Widow Allowance). These "innocent illegals" are young people who have lived in Australia for their formative years, and are granted permanent residence when they reach the age of 18. It would not be appropriate to treat them as newly arrived residents upon grant of their permanent visa.

People whose migration to Australia is approved on the basis that they will act as a carer for a disabled relative are exempt from the newly arrived resident's waiting period for Carer Payment (but not for any other payment). These are the holders (or former holders) of family visa subclasses 104 and 806, who are defined by the Migration Regulations as either "special need relatives" or "carers". Holders of subclass 116 and 836 visas, which are specifically for carers, are also exempt from the Carer Payment waiting period.

Australian citizens and their immediate family members (ie partners and dependent children) are exempt from the newly arrived resident's waiting period for all payments, as are family members of permanent residents who have been residing in Australia for at least two years.

Exemptions from Special Benefit waiting period

Most Australian social security payments have defined eligibility criteria, payment rates and means tests. The exception to this rule is the payment called Special Benefit. This "safety net payment of last resort" is paid at the discretion of the Secretary of the Department of Families, Community Services and Indigenous Affairs. The legislation stipulates that the Secretary may pay Special Benefit to a person who is unable to earn a sufficient livelihood, is in severe financial hardship and is not eligible for any other income support payment. The rate of Special Benefit is discretionary, but it cannot be more than the rate of Newstart Allowance and Youth Allowance that would otherwise apply to the recipient. Hardship tests (set down in departmental guidelines) are used to decide whether a person is unable to earn a sufficient livelihood.

Although Special Benefit has a newly arrived resident's waiting period, the legislation states that the waiting period does not apply if a person has suffered a substantial change in circumstances beyond their control. There are policy guidelines on the types of situations that would constitute such a change. These include situations such as, for sponsored migrants, the death or permanent disability of a sponsor, or domestic violence perpetrated by a sponsor. For Independent migrants, domestic violence perpetrated by a migrant partner (on whom the claimant was financially dependent), loss of savings brought to Australia through unexpected medical expenses, or loss of a pre-arranged job which was the reason for the person's migration could constitute a substantial change in circumstances. The policy guidelines give examples such as these, but do not seek to predict every type of situation in which it would be appropriate to waive the waiting period. Such a decision is discretionary. However, the guidelines stipulate that failure to find or keep employment cannot, of itself, be regarded as a substantial change in circumstances.

The holders of Temporary Protection Visas (subclass 785), Temporary (Humanitarian Concerns) Visas (subclass 786) and subclasses 447 and 451, Witness Protection (Trafficking) (Temporary) Visas (subclass 787), Bridging Removal Pending (subclass 070) and Return Pending Visas (subclass 695) are exempt from the newly arrived resident's waiting period for Special Benefit. This exemption is provided for by a Ministerial determination, as holders of temporary visas (including those granted under the Humanitarian Program) cannot meet the Social Security Act definition of a refugee. This exemption is consistent with the humanitarian reasons for allowing these groups to remain in Australia and receive Special Benefit.

In addition, Criminal Justice Stay Visas granted to those assisting in the administration of criminal justice in relation to people trafficking, sexual servitude or deceptive recruiting are also entitled to Special Benefit and are exempt from the newly arrived resident's waiting period.

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Summary

Australia's income support system is based on residence and need, and is paid by the Australian Government out of general revenue. Payments are usually only available to Australian residents—most migrants do not have access to income support payments for their first two years after arrival. Payments for the long-term contingencies of life, such as old age and disability, are further restricted to those people with a long-term connection with Australia (unless, in the case of Disability Support Pension, the disability occurs while the person is an Australian resident). There are exemptions from the qualifying residence requirements and from the newly arrived resident's waiting period for certain people. For people who are in hardship but cannot get any other form of income support, Special Benefit provides a safety net. A newly arrived resident's waiting period applies to Special Benefit, but this can be waived if the claimant has suffered a substantial change in circumstances beyond his or her control.

Revised: August 2006
International Branch
Australian Government Department of Families, Community Services and Indigenous Affairs
Ph: (02) 6244 5956