new family (parent) category – effective 24 february 2020

Immigration New Zealand (INZ) has now finally announced the full policy details surrounding the new Family (Parent) Category.

Like the previous iteration of the policy where an Expression of Interest (EOI) process is required and the application needs to be sponsored by an adult child who has held a resident visa in New Zealand for at least three years.  However, there are new significant financial measures that sponsors are required to meet in order to sponsor parents under the policy as well as long-term financial sponsorship obligations.

As in any full policy release the devil is always in the detail.  There are always some hidden complexities that are only uncovered when the full detail is released and this policy is no different.  Prospective applicants and their sponsoring children will need to be aware of a few of these before looking to file an application.

Initial timing considerations

All applicants under the Category are required to submit an EOI.  Following review an Invitation to Apply (ITA) will be required to submit a formal application.  Places are limited: the total number of resident visas issued under the Parent Category is capped at 1,000 people for each year ending 30 June.

The issue here in relation to this particular process is that only ‘periodic’ draws are scheduled to take place.  Unlike the Skilled Migrant Category or Investor 2 Category draws that are scheduled to take place every two weeks, there is no set draw under this Category.  What this means is that even if an applicant is able to meet the criteria and submit an EOI, there is no certainty as to when the application will be drawn and they will receive an ITA.

It is anticipated that due to the limited number of applications to be processed) INZ will adopt a ‘wait and see’ approach before the first Draw.  They will first look to determine how many of the existing EOIs in the Pool will ‘upgrade’ to the new policy.  INZ has circulated emails on that already to those EOI “place” holders under the old system.  These people have the option either to “update” their EOIs to demonstrate they meet the new requirements or to withdraw them and obtain a refund.  Once they have an understanding of the number of updated EOI’s they will then consider a future Draw to take the remaining number needed to meet the 1,000 quota (and subsequent draws if they need more).

While the policy takes effect from 24 February 2020, INZ has advised that applicants will start to be selected and invited to apply from “May 2020”, suggesting that they are only looking to invite and start to process and approve these visa applications in the next processing year starting from 1 July 2020.

The policy also requires that EOI applications tendered are considered for ITA by the date they are received.  This means first priority will be given to the existing EOIs in the Pool who decide to ‘update’ before the May draw, then EOIs received in order from 24 February 2020 will be considered.

If you wish to be considered under this particular policy and secure an invitation, if you have an existing EOI and now meet the policy criteria you should upgrade that EOI before the draw that will take place in May 2020.  Parents who do not have an EOI in process will need to prepare their EOIs and have those ready for submission to the Pool on 24 February 2020 (or as soon as possible thereafter).

It is hard to estimate how many of the 1,000 places will be allocated fairly quickly, but suffice to say first in first served and if a significant number are held there (over 1,000) then the chances are if you are not invited in that first May invitation period your invitation will only be forthcoming post 1 July 2021.

Numbers

The main areas of focus in this particular Category are the income thresholds.  The sponsoring child (or couple) is/are required to demonstrate that they have met the relevant median income requirement for two of the last three years.  This is where things get a little complicated.

Below are the minimum income threshold tables.  The first for one sponsor, the second for a sponsoring couple (combined income).

Number of parents
Effective date Medium income 1 2 3 4
24/02/2020 onwards $53,040 $106,080 $159,120 $212,160 $265,200
26/11/2018 to 23/02/2020 $52,000 $104,000 $156,000 $208,000 $260,000
Before 26/11/2018 $50,523 $101,046 $151,569 $202,092 $252,615

 

Number of parents
Effective date Medium income 1 2 3 4
24/02/2020 onwards $53,040 $159,120 $212,160 $265,200 $318,240
26/11/2018 to 23/02/2020 $52,000 $156,000 $208,000 $260,000 $312,000
Before 26/11/2018 $50,523 $151,569 $202,092 $252,615 $303,138

The minimum income threshold figure has been set for each year in question. If you wish to sponsor a parent you will need to meet the minimum income threshold in two of the last three periods specified in those tables.  Note it is only two of the last three years, so in theory, a sponsoring child could meet the minimum income requirement for the period 26/11/2018 to 23/02/2020 and also before 26/11/2018; but still be able to sponsor their parent(s) even if in the current year they are not going to meet that minimum income threshold.

One further complication which could create issues is the timing of what three-year minimum income period applies.  Especially if applications take a very long time to reach ITA stage. The period over which a sponsor’s income will be assessed is the three years ending the last day of the month prior to the date the applicant(s) received an ITA (i.e. well after submission of the EOI).

For example, if the (ITA) is issued on 25 April 2020 the last day of the month ending before the ITA letter is 31 March 2020, therefore, the three-year period in relation to determining the minimum income thresholds as per the tables above will be determined as follows:

Year 1:  1 April 2019 – 31 March 2020
Year 2:  1 April 2018 – 31 March 2019
Year 3:  1 April 2017 – 31 March 2018

The income threshold required for each year is calculated based on the median income that is in effect on the last day of each year of the three-year period.

While this at first flush is confusing, it can be understood.  However, this is going to create all sorts of problems with individuals who are fairly close to the thresholds because once an EOI is submitted there is no certainty as to when an ITA will be received.  It is the actual invitation date that sets the three-year qualifying criteria.  It is an important consideration for applicants moving forward.  Unless the individual has relative certainty of income moving forward when applying there is a risk that eligibility is lost due to timing of the ITA.

In addition, the policy is also like the previous policy where a parent can be sponsored by their adult child or their adult child and their partner (couple).

As an example, if a daughter-in-law wished to use her own individual income to sponsor her father-in-law rather than her partner because her partner has no taxable income, she cannot.  Her partner would need to sponsor and they would need to meet the combined income level to qualify.  She can only use individual income for her own parent(s).  In this example if she had earnt $110,000 per annum for the last three years she could sponsor one of her own parents, but could not sponsor one of her partner’s parents because the couple can’t meet the combined higher income threshold of $159,120 per annum.

Retrospective surprise

Another part of the new policy that will potentially catch out unwary applicants is parents that are already onshore holding residency under the pervious policy that are still within the child sponsorship undertaking term.  Parents who were granted residency under the old policy pre-21 November 2016 were issued resident visas subject to these restrictions for a period of five years from approval, applications post 24 November 2016 were approved subject to a sponsorship term of 10 years from approval.

If, for example, one set of parents are already onshore under the old policy, and they are still within the term of their sponsorship requirement as above, if a couple are looking to bring in the other parents those new parents under this category will be catagorised as parents “3” and “4”.  If those higher income figures cannot be reached those parents would only be able to be sponsored at a later stage once the five or 10-year financial sponsorship requirement has lapsed on the first parent(s)’ application.

In essence, even though this new policy is far more restrictive than the previous one, it actually also has a retrospective element to it meaning that the income thresholds are applied in a negative sense as those sponsoring children have already used up the lower income thresholds under this new policy with parents brought in outside the new regime.

Policy choice?

If you are a lucky parent who could potentially qualify under the Parent Retirement Category and this Category, it may well be that you choose to pursue both pathways as there still is relative uncertainty in relation to timing in terms of this new policy.

However, you may wish to think of the bigger picture.  If there are other parents (or parents-in-law) involved you may wish to consider Parent Retirement Category as a favour to those parents, because those visas do not “count” towards the parent number count under this policy (as they are self sponsored rather than child sponsored).  Therefore, rather than those subsequent parents being considered parents “3” and “4”, they would be considered “1” and “2” making it much easier to qualify.

Our Team has also identified possible mixed policy options where the temporary entry visa policy can be utilised to allow the other non-resident parent to spend large amounts of time onshore with their spouse who can qualify, if the sponsoring child or couple can’t quite get to the income level required to sponsor both but may well be able to in the future.

There are a huge number of possible policy variables that are at work with this policy so seek professional advice around your options if you appear to be just short or one can qualify and the other cannot.  Especially so if you have more than one or two parents looking to qualify.

Conclusion

Like any policy the finer detail is far more complex than most people have realised.  There are some unusual policy aspects that need to be balanced and considered carefully, especially where individuals or couples are looking to sponsor parents when they already have parents onshore, the timing of applications in relation to minimum income thresholds which would tend to float and only fix upon an ITA being received and what parents can come in and what ones can’t.

It’s a strange policy because the criteria is understandable, but there are a number of floating variables dependent on timing and family circumstances that still add a fair amount of uncertainty around qualification and visa issue.

If children are looking to sponsor their parents it would be wise to obtain a full strategic view of all sides of the equation before submitting an EOI.

Contact

For further information or assistance with emigration, please contact Lane Neave Lawyers on +64 3 379 3720 or email liveinnewzealand@laneneave.co.nz

contact

Mark Williams
Partner, Lane Neave

t +64 3 353 1063
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e mark.williams@laneneave.co.nz

 

Rachael MasonRachael Mason
Partner, Lane Neave

t +64 3 372 6323
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e rachael.mason@laneneave.co.nz

 

Daniel Kruger
Partner, Lane Neave

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