Introduction of a New Category of Parent Migration - Model of Costs

Release Date
01 October 2002

The Department of Immigration, Multicultural and Indigenous Affairs (DIMIA) sought the advice of Australian Government Actuary (AGA) on the financial implications of a proposal to alter the arrangements for parent migration.

Under this proposal, the existing queue for parent migration would be split in two, with an additional 500 places being made available for those in the existing queue and a new category introduced with an allocation of 3,500 places. The new category would involve a higher second visa application charge which is intended to provide a greater contribution towards the health and welfare costs that will be incurred by these migrants.

The higher charge for the new category could be required as an up front payment made on entry (the base option) or split between two payments, the second of which could be made up to two years after entry (the split VAC option).

DIMIA was interested in how this proposal would affect cashflows over the forward estimates period and the net financial impact of the proposal, in present value terms, taking account of both the increased revenue from the higher visa application charge and the additional health and welfare costs associated with the increased intake.

In order to provide this information, AGA has constructed a model which projects the costs of the migrant intake by individual year of age over their lifetimes. The model is being provided with this report.