Cost Recovery
Implementation
Statement
Australian Citizenship Charges
2015-16
Table of Contents
1.
INTRODUCTION
1.1. Purpose of the Cost Recovery Implementation Statement
1.2. Description of the activity
3
3
3
2.
POLICY AND STATUTORY AUTHORITY TO COST RECOVER
2.1. Government policy approval to cost recover the activity
2.2. Statutory authority to charge
4
4
4
3.
COST RECOVERY MODEL
3.1. Outputs and business processes of the activity
3.2. Costs of the activity
3.3. Design of cost recovery charges
5
5
5
6
4.
RISK ASSESSMENT
8
5.
STAKEHOLDER ENGAGEMENT
9
6.
FINANCIAL ESTIMATES
10
7.
PERFORMANCE
7.1. Financial Performance
7.2. Non-Financial Performance
11
11
11
8.
KEY FORWARD DATES AND EVENTS
12
9.
CRIS APPROVAL AND CHANGE REGISTER
12
Cost Recovery Implementation Statement | 2
1. INTRODUCTION
1.1. Purpose of the Cost Recovery Implementation Statement
This Cost Recovery Implementation Statement (CRIS) provides information on how the
Department of Immigration and Border Protection (DIBP) implements cost recovery for activities
associated with Australian citizenship. It also reports financial and non-financial performance
information for fees associated with Australian citizenship, and contains financial forecasts for the
2015-16 budget year and three forward years.
1.2. Description of the activity
DIBP is responsible for managing migration, humanitarian and citizenship policy programmes on
behalf of the Australian Government. Specifically, outcome two of DIBP Portfolio Budget
Statements 2015-16 specifies that DIBP is to support a prosperous and inclusive Australia through
the management of the visa and citizenship programmes.
There are three functional areas within DIBP that are responsible for Australian citizenship
activities: law and policy, management of the delivery of the citizenship programme in Australia
and internationally including the provision of citizenship services to clients, and the service delivery
network. The service delivery network consists of DIBP employees based in regional offices who
process citizenship applications.
The cost recovered outputs delivered to recipients of citizenship activities onshore and offshore
include:







The provision of helpdesk support and call centres to clients lodging their citizenship
application;
The production and distribution of citizenship evidence to clients who have already been
granted citizenship;
Making assessments and decisions on new citizenship applications;
Managing and maintaining citizenship test resources and test question bank;
Processing new citizenship applications to acquire, renounce or resume Australian
citizenship;
Managing complaints through call centres and referring them to the Ombudsman if
required; and
Printing and distributing citizenship certificates to new citizens.
In addition to those listed above, there are a number of other activities associated with Australian
citizenship such as the development of citizenship policy and the promotion of Australian
citizenship. However, these are not currently cost recovered and are funded through other sources.
As well as applicants, other stakeholders of the citizenship programme include local government
councils who are responsible for facilitating citizenship, and other parties who assist applicants
such as migration agents, lawyers and family members.
The Australian Government Cost Recovery Guidelines, July 2014 (AGCRGs) stipulate that where
appropriate, non-government recipients of specific government activities should be charged some
or all of the efficient costs of those activities. Activities associated with Australian citizenship are
appropriate for cost recovery charging as the recipients of these activities are an identifiable group.
The cost of these activities will be recovered from the applicants for citizenship activities as
outlined in section 3.3.
Cost Recovery Implementation Statement | 3
2. POLICY AND STATUTORY AUTHORITY TO COST
RECOVER
2.1. Government policy approval to cost recover the activity
DIBP imposes fees on applicants for all services related to Australian citizenship in line with the
requirements of the AGCRGs.
In March 2007 the Government agreed, via the exchange of letters between the then Minister for
Immigration and Citizenship and the then Treasurer, to the partial recovery (80%) of the ongoing
costs associated with processing citizenship applications for those applicants required to sit a
citizenship test. Less than full cost recovery was agreed to avoid discouraging persons from
applying for Australian citizenship in line with the Australian Government’s policy of encouraging
eligible persons to become Australian citizens. The correspondence also confirmed the previous
decision of Government for the partial recovery (50%) of costs associated with citizenship
resumption applications.
Since this time, fees relating to Australian citizenship applications have been adjusted once (2009)
to recognise the increased costs associated with the delivery of citizenship activities, while
maintaining alignment with the decision made in March 2007 to only partially recover some of
these costs.
In September 2014 the Government announced the Joint Review of Border Fees, Charges and
Taxes (Fees Review). The Fees Review was commissioned to identify and recommend to
Government how charging arrangements could be improved to better support future border
operations and outcomes for industry.
Following the outcome of the Fees Review, in the 2015-16 Budget, the Australian Government
decided to move to full cost recovery for citizenship activities from 1 January 20161 on the basis
that this was consistent with the AGCRGs and is underpinned by the principle that cost recovery
promotes equity where the recipients of a government service, rather than the general public, bear
its costs. To implement this decision, DIBP has undertaken a review of its cost base and cost
allocation methodology for citizenship activities to ensure consistency with other cost recovery
activities undertaken by DIBP.
2.2. Statutory authority to charge
Section 46 of the Australian Citizenship Act 20072 requires that an application made for citizenship
must be accompanied by the fee prescribed by the regulations. Part 4, Schedule 3 of the
Australian Citizenship Regulations 20073 stipulates the specific fee to accompany each type of
application. All Australian citizenship fees are governed under this act and the associated
regulations. Charging for citizenship activities was previously legislated under the Australian
Citizenship Act 19484.
1
http://www.budget.gov.au/2015-16/content/bp2/html/bp2_revenue-06.htm
https://www.comlaw.gov.au/Details/C2015C00221
3
https://www.comlaw.gov.au/Details/F2015C00662
4
https://www.comlaw.gov.au/Details/C2006C00317
2
Cost Recovery Implementation Statement | 4
3. COST RECOVERY MODEL
3.1. Outputs and business processes of the activity
There are a number of citizenship activities for which DIBP charges cost recovery fees, these are
detailed in section 3.3 and include:

Application for Australian citizenship (including test if required);

Request for evidence of Australian citizenship;

Resumption of Australian citizenship;

Application for Australian citizenship by descent; and

Renunciation of Australian citizenship.
Citizenship activities typically involve the following processes:

Lodgement of an application (either manually or electronically);

Review of the application for completeness and accuracy of information;

Assessment of the application, including verification of the applicants identity and eligibility;

Decision by the delegate on the outcome of the application; and

Notification of the decision to the applicant.
For citizenship applications each applicant may also be required to have a citizenship interview or
sit the citizenship test. The citizenship test encourages applicants to find out more about Australia
and understand the responsibilities and privileges of Australian citizenship. For applicants finding it
difficult passing the standard or assisted test, the citizenship test can be taken in the form of a
course-based assessment.
Once an application for citizenship has been approved, the applicant will be invited to attend a
citizenship ceremony (conducted by local government or DIBP) where the applicant will make the
Australian Citizenship Pledge.
3.2. Costs of the activity
Costs of the activity include both direct and indirect components. The costs per application are
driven by the estimated cost of delivering citizenship activities, divided by the expected volume of
applications.
Forecasting volumes of citizenship applications is problematic as the decision to apply for
citizenship is a subjective and individualistic issue. A person’s choice to apply for citizenship can
be driven by a variety of social, economic, political and emotional factors. Legislative or policy
changes can also affect eligibility requirements and therefore the number of applicants. Given
these difficulties estimated volumes of citizenship applications for 2015-16 have been aligned with
actual activity levels in 2014-15. Significant differences between assumed and actual volumes
could lead to DIBP either under or over recovering the costs associated with these activities. DIBP
will manage these risks (Refer to section 4 for DIBPs risk management strategies) to ensure that
costs recovered are in line with the costs of delivering these activities over a reasonable period.
Direct costs include both employee salaries (including on-costs, such as superannuation, leave
costs, and training) and supplier costs and represent the estimated costs of business areas within
DIBP that have been identified as directly contributing to the delivery of citizenship activities.
Cost Recovery Implementation Statement | 5
Where practicable, individual supplier costs have been allocated directly to specific citizenship
activities with the balance of direct costs being allocated to individual activities based on
management estimates of the work effort required.
Indirect costs represent costs that cannot be directly attributed to a specific activity and include
corporate functions, infrastructure operational costs and property operating expenses. They are
allocated to citizenship activities on an FTE basis in line with the management estimates of the
work effort required for each citizenship activity.
Following the integration of the Department of Immigration and Border Protection and the
Australian Customs and Border Protection Service (as from 1 July 2015) there are likely to be
changes in the expense base for citizenship activities, particularly in corporate and support
functions. However, the quantum of these changes, their impact on DIBPs structure, and how that
would flow through to individual charges is uncertain at this point in time. As such, they have not
been included in the current costing. A further review of charges may be required once the impact
of these changes in known.
3.3. Design of cost recovery charges
DIBP recovered $34.8 million in revenue in 2014-15 through citizenship fees, which was
significantly less than the cost incurred to administer the entire citizenship programme. The
difference between revenue and cost is due to both the partial cost recovery of some citizenship
activities, and previous charges not recovering all of the costs associated with the administration of
the citizenship programme. Additional costs outside the remit of cost recovery include those
incurred in the development of citizenship policy and the promotion of Australian citizenship.
Citizenship activities are charged on a ‘fee for service’ basis, as the activity and its costs can be
linked to the individual making the application. Individual charges represent the cost to deliver each
application type divided by the expected number of applications. Some concessions and
exemptions continue to apply (as per Schedule 3, Australian Citizenship Regulations 2007) to
ensure that vulnerable citizens are not disadvantaged through the imposition of a fee.
Fees related to citizenship activities for the full year are detailed in two separate tables below to
align with the change in fees as from 1 January 2016. Table 1a shows the charge and estimated
activity levels for the first half of the year (i.e. for the period 1 July 2015 to 31 December 2015),
while Table 1b shows the new charges and estimated activity levels for the second half of the year
(i.e. for the period 1 January 2016 to 30 June 2016). Further information on fees related to
citizenship activities is available on DIBP’s website5.
5
http://www.citizenship.gov.au/applying/fees_forms_appeals/
Cost Recovery Implementation Statement | 6
Table 1a: Citizenship Fees from 1 July 2015 to 31 December 2015
Type of Application
Fee
Estimated
Volume*
Estimated
Revenue
Australian citizenship by conferral - required to sit
test:
General eligibility
Fee Concession
Child under 16 years applying on the same
form as the parent / Fee Exemption
$260
$ 40
56,681
1,634
$14,737,060
$
65,360
$ Nil
25,441
$
Nil
$130
$ 20
4,618
1,339
$
$
600,340
26,780
$ Nil
304
$
Nil
$120
8,870
Australian citizenship by descent - second and
subsequent siblings
$ 95
585
$
55,575
Evidence of Australian citizenship
$ 60
9,251
$
555,060
Resuming Australian citizenship
Resuming Australian Citizenship – Child under 16
years on same form
$ 70
72
$
5,040
$ Nil
2
$
Nil
Renunciation of Australian citizenship
$285
83
$
23,655
Australian citizenship by conferral – not required to
sit test:
Other situations
Fee Concession
Child/children under 16 years applying on
the same form as parent/Fee Exemption
Australian citizenship by descent (including
st
application by 1 sibling when 2 or more siblings
apply)
$ 1,064,400
Table 1b: Citizenship Fees from 1 January 2016 to 30 June 2016
Type of Application
Fee
Estimated
Volume*
Estimated
Revenue
Australian citizenship by conferral - required to sit
test:
General eligibility
Fee Concession
Child under 16 years applying on the same
form as the parent / Fee Exemption
$285
$ 40
56,681
1,634
$16,154,085
$
65,360
$ Nil
25,441
$
Nil
$180
$ 20
4,618
1,339
$
$
831,240
26,780
$ Nil
304
$
Nil
$230
8,870
Australian citizenship by conferral – not required
to sit test:
Other situations
Fee Concession
Child/children under 16 years applying on
the same form as parent/Fee Exemption
Australian citizenship by descent (including
st
application by 1 sibling when 2 or more siblings
apply)
$ 2,040,100
Cost Recovery Implementation Statement | 7
Estimated
Volume*
Estimated
Revenue
Type of Application
Fee
Australian citizenship by descent - second and
subsequent siblings
$ 95
585
Evidence of Australian citizenship
$190
9,251
Resuming Australian citizenship
Resuming Australian Citizenship – Child under 16
years on same form
$210
72
$
15,120
$ Nil
2
$
Nil
Renunciation of Australian citizenship
$205
83
$
17,015
$
55,575
$ 1,757,690
*Estimated volumes for each six month period assume that expected activity levels in 2015-16
will occur evenly throughout the year.
4. RISK ASSESSMENT
The factors that influence cost recovery are complexity, materiality and sensitivity and are
discussed in more detail below. The risks associated with these factors for cargo and trade related
cost recovered activities have been assessed as high.
Complexity
The complexity of a cost recovered activity relates to the structures, processes and implementation
of the specific activity. The risks identified that relate to the complexity of citizenship activities are
as follows:

Citizenship tests are conducted by the Department of Human Services (DHS) – with the
involvement of another Government department, supplier costs could change over time and
without appropriate review, could be under or overstated leading to under or over recovery
of costs. By undertaking an annual review of DHS costs in administering citizenship tests,
this risk can be managed.

The cost base of citizenship activities may not be configured accurately – if costs are not
appropriately allocated, fees may or may not recover the costs associated with
administering and delivering the citizenship program. By undertaking an annual review,
using a standard cost allocation methodology and model and establishing a repeatable
process for reviewing costs, this risk can be managed.
Materiality
As the amount of revenue recovered through citizenship cost recovery activities is significant,
careful controls must be in place for accounting and collection of revenue and the tracking and
budgeting of costs. DIBP has thus put in place a dedicated team to manage cost recovery.
Additionally, the volumes of citizenship applications are challenging to forecast and can vary
substantially from year to year. This can have an impact on budgets and cost forecasts. DIBP will
undertake an annual review of expenses and revenue and treat material differences appropriately
to manage this risk.
Cost Recovery Implementation Statement | 8
Sensitivity
The sensitivity of cost recovered activities relates to the level of interest in the activity from
government stakeholders, non-government stakeholders, the media and Parliament. Given the
breadth of people impacted by citizenship activities, there is a risk that consultation on charging
does not reach all stakeholders as there are limited organised bodies to represent relevant
interested parties. Given the sensitivities, a special consultation approach was used, as detailed in
section 5, to ensure that a broad range of stakeholders had an opportunity to provide comment.
5. STAKEHOLDER ENGAGEMENT
In August 2015 DIBP conducted an online consultation process specifically for citizenship fees
which involved the establishment of an online submission form requesting responses to three
statements/questions and was supported by a social media campaign. These
statements/questions were as follows:
1. Please explain any current issues or experiences you have had with existing citizenship
fees, for example: Did the fee charged for the application of Australian citizenship affect
your decision in the take up of citizenship? i.e. Did the charge limit or support your
decision?
2. Please suggest any improvements to the existing citizenship fee structure, including
consideration of the appropriateness of concession rates and exemptions, for example: Did
the benefits of attaining Australian citizenship outweigh the application fees charged?
3. Please provide any further considerations for Government in establishing a revised
citizenship fee structure in 2016.
The consultation period closed on 31 August 2015 with 41 submissions received. Of these, 24
were deemed ‘not applicable’ as the comments made were related to visa prices or individual
cases, rather than providing responses to the prompting statements. Other responses were as
follows:


29% of responses supported increased fees, noting the link to cost recovery.
18% of responses suggested adjustments to the current fee structure, including the
introduction of means testing for fees and capping concession discounts.
 47% of responses suggested either reducing or removing citizenship fees. Further analysis
determined that these suggestions were made given the high fees paid to attain permanent
residency or respondents’ individual financial circumstances. One comment also explained
that the benefits of attaining Australian citizenship outweighed the application fees charged
only when further study options were explored.
 One response stated that the fee structure would not affect an application as the benefits of
attaining Australian citizenship would outweigh the application fees charged.
Responses assisted in the finalisation of the final fee structure for citizenship activities, noting that
all charges are set on a cost recovery basis. Future engagement will be managed through the cost
recovery website (www.border.gov.au/costrecovery).
Cost Recovery Implementation Statement | 9
6. FINANCIAL ESTIMATES
Table 2 details the current financial projections for the citizenship programme across four years
from the 2015-16 Immigration and Border Protection Portfolio Budget Statements. The expenses
detailed below include the costs of delivering all activities within the citizenship programme
including the development of citizenship policy and the promotion of Australian citizenship.
Historically, reported expenses have covered all multicultural and citizenship services, and are not
broken down separately. As a result, the revenue and expenses of the current revised citizenship
programme cannot be compared to historically published financial information.
Table 2: Financial Projections for Citizenship Programme
2015-16 ($m) 2016-17 ($m) 2017-18 ($m) 2018-19 ($m)
Expenses*
67.4
65.3
65.1
66.4
Revenue**
38.1
41.9
41.9
41.9
Balance
(29.3)
(23.4)
(23.2)
(24.5)
Cumulative Balance
(29.3)
(52.7)
(75.9)
(100.4)
Explain material
variance
The cumulative balance remains negative due to the
continuation of fee concessions and exemptions and the
inclusion of costs associated with specific activities within the
citizenship programme that are not able to be recovered (as
per the AGCRGs).
Explain balance
management
strategy
The Government’s decision in the 2015-16 Budget to move
to full cost recovery will help to reduce the difference in the
cost of delivering the citizenship programme and the amount
recovered. However, a deficit is expected to occur while fee
concessions and exemptions continue to apply and specific
costs are unable to be recovered (as per the AGCRGs).
*Total expenditure comprises all costs associated with the delivery of the citizenship programme
including costs which are excluded from cost recovery such as policy development and the promotion of
Australian Citizenship.
**Total revenue reflects the cost recovery of the efficient costs of providing citizenship activities and
takes into account existing fee concessions and exemptions.
Cost Recovery Implementation Statement | 10
7. PERFORMANCE
7.1. Financial Performance
Citizenship fee revenue, as reported in the DIBP annual report is included in Table 2 for the last
three years. Historically, reported expenses include costs for all multicultural and citizenship
services, and are not broken down separately. As a result, the revenue and expenses of the
citizenship programme cannot be compared to historically published information.
Table 3: Citizenship Fees Revenue
2012-13 ($m) 2013-14 ($m) 2014-15 ($m)
Revenue
32.3
34.0
34.8
7.2. Non-Financial Performance
The non-financial performance of Australian citizenship is reported in the DIBP Annual Report. In
2014-15 the performance measures for citizenship and the results were as follows:

The percentage of refusal decisions for Australian citizenship overturned through an appeal
process is less than 1% - achieved.
 Percentage of client conferral applications decided within service delivery standards is 80%
- in 2014-15, 82.9 per cent of applications were decided within the service standard.
 Increased awareness of, and interest in, Australian citizenship – measured through visits to
the Citizenship Wizard reached 300,000 - in 2014-15, there were 294,336 visits to the
department’s online Citizenship Wizard (compared to 361,169 in 2013-14). Although the
number of visits to the Citizenship Wizard decreased in 2014-15, the overall number of
applications for citizenship by conferral increased.
These measures are reviewed annually and seek to demonstrate the timeliness and efficiency of
citizenship applications, the correctness of citizenship application decisions, and that DIBP is
appropriately promoting the value of citizenship with the public. Performance measures are
designed to complement the objectives of the citizenship program which are to deliver the program
within parameters set by Government and to promote the value of Australian citizenship.
In addition to performance measures, DIBP annually reports on a number of statistics which
include:





People approved for conferral of Australian citizenship;
People issued with Certificates of Evidence of Australian citizenship;
People registered as Australian citizens by descent;
People resuming Australian citizenship; and
People registered as losing Australian citizenship.
Each reported statistic can be linked to the different citizenship activities for which there is a fee.
Statistics are collated by the business area responsible for the process.
Cost Recovery Implementation Statement | 11
8. KEY FORWARD DATES AND EVENTS
The next key event in relation to this cost recovered activity will be the introduction of the revised
charges on the 1st of January 2016.
The Immigration and Border Protection portfolio is scheduled to undertake a Portfolio Charging
Review of its charging activities in 2018-19 and report the outcomes of this review back to
Government in the 2019-20 Budget.
9. CRIS APPROVAL AND CHANGE REGISTER
The CRIS requires that an approval and change register is maintained. It allows tracking of
changes to the CRIS as a result of changes to the cost recovered activity. Table 4 maintains
previous versions of the CRIS.
Table 4: CRIS Approval and Change Register
Date of CRIS
change
CRIS change
Approver
Basis for change
07/08/2015
Certification of the
CRIS
Portfolio CFO
CRIS updated to meet
the requirements of the
AGCRGs
12/08/2015
Agreement to CRIS
Minister for
Immigration and
Border Protection
CRIS updated to meet
the requirements of the
AGCRGs
21/12/2015
Certification of the
CRIS
Portfolio CFO
Update CRIS to reflect
new fee structure from
1 January 2016
24/12/2015
Agreement to the
CRIS
Minister for
Immigration and
Border Protection
Update CRIS to reflect
new fee structure from
1 January 2016
27/01/2016
Agreement to the
CRIS
Minister for Finance
Update CRIS to reflect
new fee structure from
1 January 2016
Cost Recovery Implementation Statement | 12