Akbar (Migration)

[2019] AATA 3401

Akbar (Migration) [2019] AATA 3401 (8 July 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Md Ali Akbar
Mrs Farhat Parveen
Mr Mohammad Faraz
Miss Aanika Parveen

CASE NUMBER:  1906248

HOME AFFAIRS REFERENCE(S):          BCC2018/3497451

MEMBER:Alison Mercer

DATE:8 July 2019

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal affirms the decision not to grant the applicants Skilled - Independent (Permanent) (Class SI) visas.

Statement made on 08 July 2019 at 10:47am

CATCHWORDS

MIGRATION – Skilled Independent (Permanent) (Class SI) visa – Subclass 189 (Skilled Independent) – minimum taxable income requirement – gross income exceeded threshold – salary packaging arrangement – did not fall within any of the exemption categories – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), s 65
Migration Regulations 1994 (Cth), Schedule 2, cl 189.233

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 4 March 2019 to refuse to grant the applicants Skilled - Independent (Permanent) (Class SI) (subclass 189) (Skilled – Independent) visas under s.65 of the Migration Act 1958 (the Act). This visa is designed for skilled applicants who have submitted an expression of interest and received an invitation to apply for the visa.

2. The applicants applied for the visas on 14 September 2018.

3. The criteria for the grant of a subclass 189 visa in the Points-tested stream are set out in Part 189 of Schedule 2 to the Migration Regulations 1994 (the Regulations). The primary criteria must be satisfied by at least one applicant. Other members of the family unit who are applicants for the visa need satisfy only the secondary criteria.

4. In the present case, the delegate refused to grant the visas because he found that the first named applicant (the applicant) did not satisfy cl.189.233(1)(a) or (b) and thus did not meet cl.189.233 as a whole.  The delegate noted that cl.189.233(1)(a) required that, for each of the 4 completed income years in the 5 year period before the date of the visa application, the applicant’s taxable income (within the meaning of the Income Tax Assessment Act 1997, or ITAA) was no less than the minimum amount specified by the Minister for the year under subclause (2). Alternatively, cl.189.233(1)(b) provided that an applicant was exempted from this requirement if he or she was a member of a class of exempt applicants specified by the Minister during the whole of that period, or a specified period within it. The relevant legislative instrument made by the Minister pursuant to cl.189.233(2) specified that the minimum taxable income amount for each of the relevant completed income years of 2014/15, 2015/16, 2016/17 and 2017/18 was $53,900 but the delegate found that the applicant’s taxable income for each of these years was below this amount (being $48,870 for 2014/15, $41,739 for 2015/16, $41,202 for 2016/17 and $41,874 for 2017/18, according to the tax assessment notices that he provided). The delegate further found that the applicant was not in a class of exempted persons. He therefore did not meet cl.189.233(1)(a) or (b) and could not be granted a subclass 189 visa.

5. The delegate also refused to grant subclass 189 visas to the second, third and fourth named applicants (the applicant’s wife and children) on the basis that they did not satisfy the secondary visa criteria requiring them to be members of the family unit of a person who held a subclass 189 visa, and there was no evidence to suggest that they meet the primary visa criteria in their own right.

6. The Tribunal received a review application from the applicants on 16 March 2019, which was accompanied by a copy of the delegate’s decision and a written statement by the applicant with supporting documents.

7. Specifically, the applicant provided copies of his tax assessment notices showing his taxable income as follows:

   ·2013/14 - $52,454

   ·2014/15 - $48,870

   ·2015/16 - $41,739;

   ·2016/17 - $41,202; and

   ·2017/18 - $41,874.

8. In his written statement, the applicant acknowledged that his taxable income for all of these income years was below $53,900, but noted that his actual income for each of these years was well above this threshold. He stated that it seemed less due to the fact that he worked for a non-profit organisation that was legally allowed to provide its workers with a salary packaging arrangement. The applicant noted that this arrangement was also allowed by the Australian Taxation Office (ATO), and enabled the applicant to have almost $16,000 each year before tax. This greatly reduced his taxable income even though (as his payslips demonstrated) he was clearly working the maximum number of full time hours in his job, as well as overtime when this was available. He stated that he really wanted to obtain permanent residency for himself and his family and had been working hard on a full time basis to achieve this since coming to Australia. He further noted that his employer (Southern Cross Care WA) encouraged him to participate in the salary packaging arrangement, and that it was approved by the ATO. He therefore could not understand how it could count against him for the purposes of the subclass 189 visa application. The applicant also provided the following documents to support his case:

   ·    salary packaging request for the applicant made to Southern Cross Care (WA) Inc, starting 18 December 2014;

   ·    information sheet on salary packaging; and

   ·    the applicant’s PAYG payment summaries for 2014/15, 2015/16, 2016/17 and 2017/18 showing gross payments and reportable fringe benefits amounts for those income years.

9. On 27 May 2019, the Tribunal wrote to the applicants to invite them to attend a hearing via video conference on 12 June 2019. They were invited to provide any additional written submissions and/or documents in support of their case prior to the hearing.

10. The applicants appeared before the Tribunal on 12 June 2019 to give evidence and present arguments.

11. The applicant confirmed that both he and his wife are employed as carers with Southern Cross Care WA Inc. He had been employed there for nearly 6 years.  Prior to that, and just after coming to Australia, the applicant said that he worked as a baker, for which he earned around $52,000, which was not the subject of any salary packaging. The applicant told the Tribunal that when he started at Southern Cross Care WA Inc, he was encouraged to salary package, which he was happy to do as the overtime in that job was not as favourable as when he was a baker, so it made sense to maximise his income another way. He was initially reluctant to enter into the salary packaging arrangement but his colleagues explained that it was easy to do.

12. The Tribunal discussed with the applicants its view that the wording of cl.189.233 specifically refers to ‘taxable income,’ as that term is defined in the ITAA, and which did not – in the Tribunal’s view - include amounts that had been salary packaged. The applicant said that had he been made aware of this, he would have elected not to take part in the salary packaging arrangement at work. He noted that there was no information to this effect on the ATO or Department websites. The only information on the Department’s website indicated that he needed to have income of at least $53,900 for each relevant income year, which he believed he did, when the salary packaged component was added back in.  The applicant said that he rang the Department to clarify this, and was told that it was unclear, but that he should apply anyway. After the visa application was refused, he went in to the Department office in Perth and queried it, but was told again that the issue was unclear, and that he should seek review of the decision with the Tribunal.

13. The applicant noted that he worked full time throughout the relevant period, worked overtime when available, and paid taxes.  It did not occur to him that this would not count towards cl.189.233, and he felt that it was unfair that it did not, or alternatively, that people utilising salary packaging arrangements were not specified as exempt persons for the purposes of cl.189.233.  The applicant concurred with the Tribunal’s view that his circumstances did not fall within any of the current exemption categories.  He queried whether this was intentional or not, as it seemed unfair and illogical to exclude persons in his situation from being able to meet cl.189.233 only because they elected to participate in a lawful salary packaging arrangement.

14. The applicant said that without Australian permanent residence, he and his family felt like outsiders in the Australian community, even though they worked, lived and studied here. He noted that they were not entitled to vote, and were subject to higher fees for secondary and tertiary education for their children. There was also more bureaucratic rigmarole for them as temporary residents than there would be as Australian permanent residents, in relation to a number of different services.

15. The applicant’s son told the Tribunal that the refusal of their visas had effectively put the family in limbo for a further 5 years, delaying their plan to become Australian citizens. He noted that his mother (the applicant’s wife) was employed in the same capacity by the same employer as the applicant, and thus also participated in a salary packaging arrangement, so she could not successfully apply either for another 5 years (assuming the subclass 189 criteria remained the same). The applicant’s son confirmed that he is in his second year of a medical degree and that his sister was in year 10 at secondary school. While the family had access to Medicare, they were subject to other restrictions on temporary residents, such as those set by the Foreign Investment Review Board (FIRB) in relation to property ownership, and he had no access to the Higher Education Contribution Scheme (HECS). He queried whether this was fair or intended, given his parents had both been employed full time for 5 years, each earning total incomes of more than $53,900 each year, even if not all of this was classified as ‘taxable income.’

16. The Tribunal undertook to review the matter carefully in relation to ‘taxable income.’

17. For the following reasons, the Tribunal has concluded that the decision under review should be affirmed.

    CONSIDERATION OF CLAIMS AND EVIDENCE

18. The issue in the present case is whether the applicant has the required taxable income set out in cl.189.233(1)(a), and if not, whether he is in the class of exempted persons for the purposes of cl.189(1)(b).

19. The relevant provisions for a subclass 189 visa in the New Zealand permanent resident stream are set out below:

    189.23  Criteria for New Zealand stream

    Note:    These criteria are only for applicants seeking to satisfy the primary criteria for a Subclass 189 visa in the New Zealand stream.

    189.231 

    (1)  The applicant had been usually resident in Australia for a continuous period of at least 5 years immediately before the date of the application.

    (2)  That continuous period of usual residence in Australia started on or before 19 February 2016.

    189.232 

    (1)  The applicant has provided copies of notices of assessment, and of any notices of amended assessments, given to the applicant by the Commissioner of Taxation, of the applicant’s income tax liability in relation to the 4 most recently completed income years before the date of the application (during the period of 5 years immediately before that date).

    (2)  The requirement in subclause (1) is satisfied in relation to a copy of a notice even if the copy does not include the applicant’s tax file number within the meaning of Part VA of the Income Tax Assessment Act 1936.

    189.233 

    (1)  For each of the 4 completed income years mentioned in subclause 189.232(1):

    (a)  the applicant’s taxable income (within the meaning of the Income Tax Assessment Act 1997) is no less than the minimum amount specified by the Minister for the year under subclause (2); or

    (b)  the applicant:

    (i)  satisfies the Minister that he or she was a member of a class of exempt applicants specified by the Minister under subclause (2) during the whole, or a specified period, of that year; and

    (ii)  provides evidence specified by the Minister under subclause (2) in relation to that class of applicants.

    (2)  The Minister may, by legislative instrument:

    (a)  for the purposes of paragraph (1)(a), specify a minimum amount of income for an income year; and

    (b)  for the purposes of paragraph (1)(b), specify a class of exempt applicants, and evidence in relation to that class.

20. For the purposes of cl.189.232(2), the current instrument made by the Minister (LIN 18/138, which came into force from 6 December 2018, and is applicable to all visa applications not yet finally determined as at that date) provides that $53,900 is the minimum amount of taxable income for the relevant income years 2013/14, 2014/15, 2015/16, 2016/17 and 2017/18 (item 6). Item 7 of LIN 18/138 sets out the following exemption categories for the purposes of cl.189.233(1)(b):

    ·   a primary applicant who holds a subclass 444 visa and was unable to meet the income requirement for any period during 5 years immediately before the date of the visa application because they were preventing from leaving Australia to return to New Zealand because the Family Court or Federal Circuit Court of Australia assigned primary care of a child to the applicant and placed restrictions on the applicant from removing the child from Australia;

    ·   a primary applicant who holds a subclass 444 visa and was unable to meet the income requirement for any period during 5 years immediately before the date of the visa application because they were receiving compensation for an injury which prevented them from earning at or above the income threshold, and would have their ongoing rehabilitation or compensation discontinued if the applicant returned to New Zealand;

    ·   a primary applicant who holds a subclass 444 visa and was unable to meet the income requirement for any period during 5 years immediately before the date of the visa application because they were on a period of approved parental leave or carer’s leave from their usual employment, and has resumed, or is expected to resume within a reasonable period, earning an income that is no less than the applicable minimum specified in item 6 (that is, $53,900 at present).

21. It was conceded by the applicant that he did not fall within any of the exemption categories above, and thus could not satisfy cl.189.233(1)(b).  The Tribunal is satisfied that this is the case.

22. In order to succeed, the applicant must therefore satisfy cl.189.233(1)(a). As noted above, it was not disputed that the completed income years (as that term is defined in the ITAA) in the 5 years immediately before the applicant made his visa application on 14 September 2018 were as follows, and that his taxable income (as specifically listed in his ATO tax assessment notices) was as follows:

    ·2013/14 - $52,454

    ·2014/15 - $48,870

    ·2015/16 - $41,739;

    ·2016/17 - $41,202; and

    ·2017/18 - $41,874.

23. The applicant argued that although the ATO listing for his taxable income was correct for each of these years, his actual income was higher than this, as he was participating in a salary packaging arrangement throughout the whole of the above period, as encouraged by his employer and as permitted by the ATO.  This had the effect of reducing his before-tax income, and thus his taxable income. The Tribunal is satisfied that the applicant’s evidence on this point is correct, as it is reflected in his credible written and oral evidence, and is supported by the fact that his PAYG summary statements for the above income years reflect that his gross payments were reduced by an amount appearing as a reportable fringe benefit.

24. While the Tribunal acknowledges that this is a legitimate arrangement to reduce a person’s taxable income, the Tribunal is bound by the words of the legislation in Part 189 of Schedule 2 to the Regulations. They specifically refer to an applicant’s ‘taxable income,’ as that is defined in the ITAA.

25. The Tribunal has reviewed the relevant provisions of the ITAA. Subsection 995-1(1) of the ITAA 1997 defines ‘taxable income’ as having the meaning given by s.4-15 of the ITAA 1997, which in turn states that ‘taxable income’ is assessable income less deductions. Section 6 of the ITAA 1997 excludes salary sacrificed amounts (also known as reportable fringe benefits) from ‘assessable income.’ The Tribunal is therefore satisfied that the applicant’s ‘taxable income’ for the purposes of the ITAA and cl.189.233(1)(a) is the amount listed as taxable income on his ATO taxation assessment notices, and that the salary sacrifice/reportable fringe benefit component of his wage cannot be added back in to form part of his ‘taxable income.’

26. The Tribunal notes that components such as salary sacrifice amounts/reportable fringe benefits can form part of an applicant’s ‘adjusted taxable income’ but it considers that the wording of cl.189.233(1)(a) is clear and is confined to ‘taxable income’ as defined in the ITAA. The Tribunal does not accept that this term could be expanded to include, or read as including, an applicant’s ‘adjusted taxable income.’ The plain wording is clear, in the Tribunal’s view, and it considers that if the drafters of the legislation had wished to do so, they could have either used ‘adjusted taxable income’ in cl.189.233(1)(a) or could have included an exemption category under cl.189.233(1)(b) for applicants who participated in legitimate salary packaging arrangements. It is unclear why such an exemption was not included, but the Tribunal is satisfied that such an exemption does not presently exist.

27. The Tribunal has also reviewed the Department’s Procedures Advice Manual (PAM3) (version as at 20 September 2018, shortly after the applicant made his visa application) on this issue. PAM3 provides the following guidance to Departmental decision-makers:

    7.18 The income requirement

    Clause 189.232 and clause 189.233 outline the income requirement for the primary NZ applicant.

    The primary applicant must provide copies of a notices of assessment (NOA), and of any notices of amended assessments, given to them by the Commissioner of Taxation in relation to the four most recently completed income years in the period of five years immediately before applying – see clause 189.232(1).

    This requirement will be met even if the copy does not include the applicant’s tax file number – see clause 189.232(2). Note: the Department does not have legislative authority to collect a person’s tax file number (TFN). Consequently, a process should be in place to ensure that the TFN has been removed or obscured from the applicant’s notice of assessment.

    Unless an ‘exemption’ in clause 189.233(1)(b) applies, for each of the four completed income years mentioned in clause 189.232(1), the applicant’s taxable income (as shown on the Notices of Assessment or re-assessment must be no less than the minimum amount specified by the Minister in a legislative instrument for the purpose of clause 189.233(2).  See clause 189.233(1)(a).

    The minimum amount specified by the Minister in a legislative instrument for the purpose of clause 189.233(2) (the income threshold) is based on the primary applicant’s individual taxable income only, not a combination of their partner, other family members or a business. Note: that business owners will need to provide their own notices of assessment from the Australian Taxation Office and cannot provide details of business turnover instead.

    The income threshold is based on the Temporary Skilled Migration Income Threshold (TSMIT) as an indicator that an occupation is skilled and ensures a visa holder has reasonable means of supporting themselves while in Australia.

    Income levels for previous years are set out in the following legislative instrument: IMMI 17/035: Specification of Income Threshold and Exemptions for Subclass 189 Skilled – Independent Visa (New Zealand Stream) NOT YET APPROVED.

    …

    7.20 Exemption framework for the income requirement

    Clauses 189.233(1)(b) and (2)(b).

    The Ministers for Immigration and Border Protection and Social Services agreed to the following framework for exemption to the income requirement. See IMMI 17/035: Specification of Income Threshold and Exemptions for Subclass 189 Skilled – Independent Visa (New Zealand Stream) NOT YET APPROVED

    Exemptions to the income test are deliberately narrow and will only apply to applicants who hold a Subclass 444 (Special Category) visa and fit into one of three categories. These categories are as follows:

    ·             applicants who are prevented by an Australian authority from leaving Australia to return to New Zealand because the Family Court of Australia has assigned primary care of a child to the applicant and places restrictions on the applicant from removing the child from Australia;

    ·             applicants who are receiving compensation for an injury which prevents them earning at or above the income threshold, and if they returned to New Zealand their ongoing rehabilitation and/or compensation would be discontinued;

    ·             applicants who are on an approved period of parental or carer’s leave; and immediately prior to the period of leave, had an annual income that was not less that the applicable minimum amount; and have resumed, or intend to resume, earning an income that no less that the applicable minimum amount.

    Note: Exemptions for applicants whose personal circumstances are not addressed by the exemption framework cannot be considered for an exemption for the income requirement.

1. The Tribunal has also reviewed the Explanatory Statement for the legislation that introduced the subclass 189 criteria (Migration Amendment Regulation 2012 (No.2)), but has been unable to locate any commentary in it which sheds light on this issue.

2. Given the above findings, the Tribunal must find that the applicant does not satisfy cl.189.233(1)(a) or (b) and thus does not meet cl.189.233.  It follows that the applicant does not satisfy the criteria for the grant of a subclass 189 visa. As this is the only relevant subclass in this case, the decision under review will be affirmed.

3. The Tribunal must also affirm the decision not to grant the second, third and fourth named applicants subclass 189 visas, as it finds that they do not meet the secondary visa criteria in cl.189.311 to be members of the family unit of a person who holds a subclass 189 visa, and there is no evidence that they meet the primary visa criteria in their own right.

4. The Tribunal acknowledges the dismay expressed by the applicants that they should be prevented from meeting the cl.189.233 criteria due to their participation in a sanctioned, legal salary packaging scheme, in which they were encouraged to participate by their not-for-profit employer and their colleagues.  The Tribunal notes that in the event of an unsuccessful review application, applicants may seek Ministerial intervention pursuant to s.351 of the Act. This section of the Act provides the Minister with a non-compellable discretion to intervene to grant a visa if he or she believes it is appropriate to do so even if a case has been unsuccessful at the Tribunal. Guidelines for the exercise of the Minister’s power pursuant to s.351 (and ss.391, 417,454 and 501J) provide that only cases with unique or exceptional circumstances should be brought to the Minister’s attention, examples of which are given as follows:

   ·strong compassionate circumstances that if not recognised would result in serious, ongoing and irreversible harm and continuing hardship to an Australian citizen or an Australian family unit, where at least one member of the family is an Australian citizen or Australian permanent resident

   ·compassionate circumstances regarding the age and/or health and/or psychological state of the person that if not recognised would result in serious, ongoing and irreversible harm and continuing hardship to the person

   ·exceptional economic, scientific, cultural or other benefit would result from the person being permitted to remain in Australia

   ·circumstances not anticipated by relevant legislation; or clearly unintended consequences of legislation; or the application of relevant legislation leads to unfair or unreasonable results in a particular case

   ·the Department has determined that the person cannot be returned to their country/countries of citizenship or usual residence due to circumstances outside the person’s control

   ·a person’s particular circumstances or personal characteristics provide a sound basis for believing that there is a significant threat to their personal security, human rights or human dignity if they return to their country of origin, but the mistreatment does not meet the criteria for the grant of any type of protection visa. For example, systematic harassment or denial of basic rights available to others in their country, or the person has experienced torture or trauma in their country of origin and is likely to experience further trauma if returned to that country

   ·the person is excluded from the grant of a protection visa or has had a protection visa cancelled or refused on character grounds and their circumstances have been assessed as engaging Australia’s non-refoulement obligations because there are substantial grounds for believing that, as a necessary and foreseeable consequence of the person being removed from Australia to a receiving country, there is a real risk that the person will suffer significant harm as provided in section 36(2A) of the Act.

5. The following are listed as circumstances which would make it inappropriate for the Minister to considering intervening:

   ·the request is made by a person who is not the subject of the request or their authorised representative

   ·the person is in the community and:

   a.is an unlawful non-citizen and remains an unlawful non-citizen throughout the course of their Ministerial intervention request; and/or

   b.does not cooperate in ensuring that a valid travel document is available (or has not satisfied the Department that they are stateless)

   ·the person has been found not to satisfy a fraud-related Public Interest Criterion for the grant of a visa

   ·the person’s visa has been cancelled because they breached their visa conditions

   ·the person has had a visa refused because they did not comply with the conditions of a previous visa

   ·the person has been refused a visa or has had a visa cancelled on character grounds

   ·ASIO has determined that the person is a direct or indirect risk to national security through issuing the person with an Adverse Security Assessment (ASA) which remains in effect

   ·the person could apply for a Partner visa onshore but is subject to an 8503 condition (which specifies that after entering Australia, the person cannot be granted another substantive visa other than a protection visa while they remain in Australia) and a request for a waiver of that condition has not been sought or decided

   ·the person may be able to apply for a Partner visa onshore, as prescribed under regulation 2.12(1) of the Migration Regulations 1994 (the Regulations)

   ·the person’s application for a Partner visa onshore, as prescribed under regulation 2.12(1) of the Regulations, has been refused and the person is now barred from applying for a Partner visa onshore

   ·the person has left Australia

   ·the person has an ongoing application for a substantive visa (either onshore or offshore) with the Department

   ·the person has an ongoing application for merits review of a visa decision with a relevant review Tribunal

   ·the person has had a remittal or a set aside decision from a relevant review Tribunal or a court

   ·the person’s review Tribunal decision was in relation to the refusal or cancellation of a Bridging visa E

   ·the person has an ongoing Ministerial intervention request under any of the powers covered by these guidelines

   ·a Notice of intention to remove has been issued to the person, and the Ministerial intervention request has not been initiated by the Department

   ·the person holds a Bridging visa E with visa condition 8512, which specifies that the person must leave Australia by a specified date

   ·the request raises claims only in relation to Australia’s non refoulement obligations. 

6. It appears to the Tribunal that the applicants’ case does not fall within the ‘inappropriate to consider’ guidelines. It remains open to the applicants to make a request to the Minister directly pursuant to s.351 of the Act to intervene in their case to grant them subclass 189 visas, if they believe that their case falls within the ‘appropriate to consider’ guidelines, and/or they believe that they have any other unique and/or compelling circumstances that would warrant the Minister’s intervention. 

   DECISION

7. The Tribunal affirms the decision not to grant the applicants Skilled - Independent (Permanent) (Class SI) visas.

   Alison Mercer
   Member