Federal Register of Legislation - Australian Government

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Determinations/Other as made
In accordance with section 60 of the Education Services for Overseas Students Act 2000, the Contributions Review Panel has determined the 2006 contributions criteria.
Administered by: Industry, Innovation, Climate Change, Science, Research and Tertiary Education
General Comments: This Contributions Criteria was determined by the Contributions Review Panel on 8 November 2005 and applies from 1 January 2006 to 31 December 2006.
Registered 23 Dec 2005
Tabling HistoryDate
Tabled HR07-Feb-2006
Tabled Senate07-Feb-2006
Date of repeal 09 Aug 2013
Repealed by Industry, Innovation, Climate Change, Science, Research and Tertiary Education (Spent and Redundant Instruments) Repeal Regulation 2013

ESOS ASSURANCE FUND

 

2006 CONTRIBUTIONS CRITERIA

 

In accordance with Section 60 of the Education Services for Overseas Students Act 2000, the Contributions Review Panel has determined the 2006 contributions criteria.

 

The criteria relate to the period 1 January 2006 to 31 December 2006 and apply to all non-exempt providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) at any time during 2006. The criteria includes:

 

·         Base Premium - $465

 

·         Additional Premium0.75% of annual overseas student fee income*

 

* The definition of overseas student fee income is per the definition of course money under Section 7 of the Education Services for Overseas Students Act 2000.

 

Each provider’s contribution will be assessed based on their estimated overseas student fee income for the period 1 January 2006 to 31 December 2006. For those providers who were liable to the ESOS Assurance Fund (the Fund) in the previous year, their 2006 contribution will also include an adjustment for any variances between their estimated and actual overseas student fee income for the period 1 January 2005 to 31 December 2005.

 

Discounts apply to the Additional Premium for providers who have a Primary Assurance Mechanism (PAM) as follows:

 

Primary Assurance Mechanism

Discount

Tuition Assurance Scheme member

90%

Indemnity Agreement

90%

Bank Guarantee

90%

 

Consolidating the Base and Additional Premiums, the following criteria apply:

 

Primary Assurance Mechanism

Base Premium

Additional Premium

Tuition Assurance Scheme member

$465 plus

0.075% overseas student fee income

Approved Indemnity Agreement

$465 plus

0.075% overseas student fee income

Approved Bank Guarantee

$465 plus

0.075% overseas student fee income

Ministerial Exemption

$465 plus

0.75% overseas student fee income

 

Providers can request (and will be assessed on a case-by-case basis) that the Fund Manager take a security over suitable assets. This will result in a reduction in the provider’s annual Fund contribution.

 

Required timeframe for submitting the information requested by the Fund Manager

 

If a provider does not submit the requested information in the timeframe specified by the Fund Manager, the provider will be issued with a contribution that includes:

  • a $465 Base Premium
  • an Additional Premium calculated as the greater of either:
    • the provider’s 2005 estimated overseas student fee income increased by a 20% uplift factor,

multiplied by the applicable Additional Premium rate, or

    • the provider’s 2005 estimated overseas student fee income multiplied by the applicable Additional

Premium rate plus a $200 surcharge.

  • a $300 non-refundable Administration Fee for non-submission of information.

 

The Fund Manager will make a second request that providers submit their 2005 actual and 2006 estimated overseas student fee income. Following submission of the requested information providers will be issued with an adjusted Additional Premium.

 

Failure to respond to the Fund Manager’s second request for information will result in sanctions being imposed by the Department of Education, Science & Training, which may include suspension of registration.

 

Providers who fail to submit their information in two or more consecutive years will incur an Additional Premium rate 10 times greater than the standard rates indicated above (ie between 0.75% and 7.5% depending on PAM coverage). This increased rate will not be adjusted when the providers submit their revised information. The requirement to submit the requested information remains.


Providers with overseas student fee income greater than $1 million that are not covered by a Primary Assurance Mechanism (PAM) or a Ministerial Exemption (ME)

 

Should the situation occur where a provider with overseas student income greater than $1 million is, for a period of time, for whatever reason, without a PAM or ME, the provider must inform the Fund Manager as soon as practicable, and the provider’s contribution may be adjusted, based on the undiscounted Additional Premium rate, for the period during which the provider is without coverage. 

 

Providers with a Ministerial Exemption that covers greater than $1 million in overseas student fee income

 

Providers that have a Ministerial Exemption that covers more than $1 million in overseas student fee income will incur an additional base fee of $1,650 in each year that their overseas fee income covered by Ministerial Exemption is greater than $1 million.

 

All providers that have a Ministerial Exemption that covers more than $1 million in overseas student fee income, will be required to pay an initial contribution consisting of:

·         a base premium of $465, plus

·         an additional base fee of $1,650, plus

·         an additional premium based on 0.75% of their total overseas student fee income covered by Ministerial Exemption.

 

In addition providers will be requested to obtain coverage under one of the options listed below for all or part of their overseas student fee income covered by Ministerial Exemption to reduce their exposure to the Fund and their contribution fees:

·         insurance coverage

·         bank guarantee

·         their courses to be covered by one or more TASs

·         suitable assets over which the Fund can obtain security

·         enter into a legally-binding agreement with an alternative provider approved by the Fund Manager, where the agreement provides that should the first provider cease to be able to provide a course of study, the alternative provider will offer to enrol students of the first provider in a course leading to the same or a comparable qualification, with full credit for the units of study completed, and at no additional cost to the student for the part of the course for which course money has been paid to the original provider

·         any combination of the above.

 

Where the above coverage is obtained for:

1.       the provider’s entire overseas student fee income covered by Ministerial Exemption, then the Additional Premium portion of the provider’s contribution will be adjusted based on 0.075% of their overseas income with PAM coverage,

2.       the portion of the provider’s overseas student fee income covered by Ministerial Exemption above $1 million, then the Additional Premium portion of the provider’s contribution will be adjusted based on:

·   0.75% of overseas income with Ministerial Exemption (up to a maximum of $1 million), plus

·   0.075% of overseas income with PAM coverage.

 

If the provider is unable to obtain coverage for any portion of their overseas student fee income, placing exposure on the Fund above $1 million covered by Ministerial Exemption, using any of the options above, then the Fund Manager will attempt to instigate one of the following:

  1. Obtain reinsurance to cover the Fund’s exposure for the provider’s overseas student fee income greater than $1 million. In this case the provider’s contribution will be adjusted in accordance with point 2 above. In addition, the cost of the reinsurance policy, including costs incurred by the Fund Manager in obtaining it, will be at the expense of the provider.
  2. Discuss with the provider the establishment of a trust account, at the provider’s own cost. All overseas student fee income will need to be deposited into the trust account, which is required to be managed by an external party. All payments from the trust account will be managed in accordance with a trust deed agreed between the provider and the Fund Manager. The trust arrangements will aim to ensure that the risk to the Fund is mitigated to an extent equivalent to a PAM. In this case the Additional Premium portion of the provider’s contribution will be adjusted based on a rate between 0.075% and 0.75% (the final percentage to be determined by the Fund Manager) of their overseas student fee income covered by the trust account arrangement.
  3. Discuss with the provider other ways to mitigate the risk to the Fund which could include coverage of courses, with no PAM coverage.  The Fund would then invoice the provider an amount determined at the Fund Manager’s discretion which may include an Additional Premium greater or less than 0.75% of overseas student income depending on the circumstance.