Visa Newsletters

1st November 2005

Sponsor's Undertakings on Medical & Hospital Expenses

It has been quiet for the past couple of months, until a sudden flurry of legislative changes for November! As Sponsor's Undertakings are important compliance issues, a special Alert has been devoted to this topic which concerns undertakings relating to medical and hospital expenses, with additional explanations extracted from DIMIA's Procedural Advice Manual. A separate Alert relating to other changes will follow shortly.

Changes relating to medical and hospital expenses

From 1 November 2005, all new business sponsors, professional development sponsors and special student sponsors having their applications made on or after 1 November 2005, will only be liable for all medical and hospital expenses incurred by the sponsored person for treatment administered 'in a public hospital' (other than expenses that are met by private health insurance). For applications made before 1 November 2005, the sponsors continue to be liable for all medical and hospital expenses incurred by the sponsored person (other than expenses that are met by private health insurance). The purpose of this amendment is to clarify and limit the scope of the existing medical and hospital expenses undertaking for new sponsors.

More on these Undertakings (Extract from DIMIA's Procedural Advice Manual)

The aim of this undertaking is to protect the Australian taxpayer from having to meet medical or hospital expenses for sponsored persons and their family members.
From 1 November 2005, the undertaking is aimed primarily at costs incurred at public hospitals. This may include costs associated with special medicines required to treat a specific illness or access to special treatment in public hospitals or clinics. The need for such treatment may have been identified previously e.g. during the health checks sponsored sponsors undergo as part of visa processing.

It is expected that the sponsor and the sponsored person will make arrangements to cover medical and hospital costs. This undertaking exists to ensure that, if these costs have not been met, the sponsor, not taxpayers, will be responsible for the outstanding costs.

This undertaking does not require evidence of health insurance cover, although all 457 visa holders are encouraged to maintain health cover. The sponsor's obligations would usually be met through arrangements with the sponsored person whereby the sponsor may arrange the necessary health cover for emergency health care and a clear commitment is given by the sponsored person to meet any cost associated with elective surgery, medical check ups, dental visits and medicines. In most of these cases, the service would not be provided unless payment is made at the time the service is given. The costs owed to doctors or dentists on a personal basis is a matter between health provider and the patient.

Australia has reciprocal health care agreements with certain countries for access to health care services. Sponsors and/or sponsored persons should check eligibility with Medicare, including what may or may not be covered.

Breaches of these undertakings

A breach of this undertaking would occur where medical or hospital expenses for a sponsored person have not been paid. However, for sponsors who obtained their sponsorship status on or after 1 November 2005, the hospital expenses are limited to those in a public hospital.

When do these undertakings cease?

The sponsor is liable for any medical or hospital expenses incurred while the sponsored person holds a 457 visa. The sponsor is not liable for any expenses incurred after the sponsored person either is granted a further visa or departs Australia on completion of employment. The obligation under this undertaking to pay the medical or hospital expenses continues, however, until any such expenses incurred are paid in full.