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Education Services for Overseas Students Bill 2000

Part 5 The ESOS Assurance Fund

Division 1 Basics of the Fund

45   Establishment of the Fund

                   The ESOS Assurance Fund is established by this section.

46   Purpose of the Fund

                   The purpose of the Fund is to protect the interests of overseas students and intending overseas students of registered providers by ensuring that the students are provided with suitable alternative courses, or have their course money refunded, if the provider cannot provide the courses that the students have paid for.

47   What money goes into the Fund

             (1)  The following amounts must be credited to the Fund:

                     (a)  all amounts of annual Fund contributions received from providers (see Subdivision A of Division 4);

                     (b)  all amounts of special levy received from registered providers (see Subdivision C of Division 4);

                     (c)  all amounts recovered from providers under section 78;

                     (d)  the proceeds from any investments made using Fund money under section 79;

                     (e)  any money the Fund Manager borrows for the Fund;

                      (f)  any other money appropriated by the Parliament for the purpose of the Fund;

                     (g)  any late payment penalty or review fees received by the Fund Manager;

                     (h)  any other amount given to the Fund.

CRF appropriation

             (2)  Whenever an amount of annual Fund contribution or special levy is received, then to the extent that section 81 of the Constitution applies to the receipt, the Consolidated Revenue Fund is appropriated by that amount for the purpose of the Fund.

48   What money comes out of the Fund

Amounts held on trust

             (1)  Amounts standing to the credit of the Fund must be held by the Fund Manager on trust for the benefit of overseas students and intending overseas students of registered providers, for the purpose of the Fund.

Expenditure of amounts

             (2)  Those amounts must only be expended for the following purposes:

                     (a)  in making payments as a result of calls being made on the Fund under Division 5;

                     (b)  in paying premiums for insurance of the Fund;

                     (c)  in making investments under section 79;

                     (d)  in repaying loans, and interest on loans, of the Fund;

                     (e)  in meeting expenses incurred in managing and administering the Fund, including the Fund Manager’s fees and expenses;

                      (f)  in refunding amounts of overpaid annual Fund contribution or special levy.



 

Division 2 The Fund Manager

49   Appointment of the Fund Manager

             (1)  The Secretary must, by writing, appoint a Fund Manager.

             (2)  The Fund Manager may be an individual or a company.

50   Functions and powers of the Fund Manager

             (1)  The functions of the Fund Manager are as follows:

                     (a)  to hold the money standing to the credit of the Fund on trust for the benefit of overseas students and intending overseas students of registered providers, for the purpose of the Fund;

                     (b)  to manage the Fund in a way that ensures it is able to meet all its liabilities from time to time;

                     (c)  to propose to the Panel the criteria for determining the amounts of annual Fund contributions for providers;

                     (d)  to determine the amounts of annual Fund contributions for providers, in accordance with those criteria;

                     (e)  to collect annual Fund contributions and special levies from providers;

                      (f)  to arrange alternative courses for students, and to make payments from the Fund, when required to do so under this Part;

                     (g)  any other functions that this Act confers on the Fund Manager.

             (2)  The Fund Manager has power to do all things necessary and convenient for or in connection with performing its functions.

51   Terms and conditions of the appointment of the Fund Manager

                   The terms and conditions of the Fund Manager’s appointment (including the duration of the appointment) are to be as agreed in writing by the Secretary and the Fund Manager.

52   Acting Fund Manager

             (1)  The Secretary may appoint a person to act as the Fund Manager:

                     (a)  if there is a vacancy in the office of the Fund Manager, whether or not an appointment has previously been made to the office; or

                     (b)  during any period, or during all periods, when the Fund Manager is absent from duty or from Australia or is, for any reason, unable to perform the duties of the office.

             (2)  Anything done by or in relation to a person purporting to act under this section is not invalid merely because:

                     (a)  the occasion for the appointment had not arisen; or

                     (b)  there was a defect or irregularity in connection with the appointment; or

                     (c)  the appointment had ceased to have effect; or

                     (d)  the occasion to act had not arisen or had ceased.

53   Indemnity

             (1)  The Fund Manager is not personally subject to any liability to any person (other than the Commonwealth) in respect of anything done, or omitted to be done, in good faith in the exercise or performance of powers or functions under this Act.

             (2)  However, this section does not affect the operation of the Privacy Act 1988 .



 

Division 3 The Contributions Review Panel

54   Establishment of the Panel

             (1)  The Contributions Review Panel is established.

Membership of the Panel

             (2)  The Panel consists of 10 people appointed by the Minister.

             (3)  One of the people appointed must be appointed as the Chair of the Panel.

             (4)  All of the members must have qualifications and experience that the Minister considers to be relevant to the performance of the Panel’s functions.

             (5)  At least 5 of the members must be people who, in the Minister’s opinion, represent the interests of providers who are liable to pay annual Fund contributions.

          (5A)  Also, at least 4 of those members mentioned in subsection (5) must be people who, in the Minister’s opinion, represent the interests of providers who are members of tuition assurance schemes.

Regulations about membership

             (6)  The regulations may prescribe different numbers of members for the purposes of subsections (2) and (5) but only:

                     (a)  after the initial appointment of the Panel is complete; and

                     (b)  after the Minister has consulted representatives of providers about the proposed regulations.

             (7)  Such regulations apply only in relation to appointments made after the regulations take effect. They do not affect:

                     (a)  the validity of the composition of the Panel as at the time when the regulations take effect; or

                     (b)  the tenure of a person who is a member of the Panel when the regulations take effect.

55   Functions and powers of the Panel

             (1)  The functions of the Panel are:

                     (a)  to determine the contributions criteria; and

                     (b)  to hear and determine appeals by providers against determinations of their contributions.

             (2)  The Panel has power to do all things necessary and convenient for or in connection with performing its functions.

             (3)  The performance of the functions or the exercise of the powers of the Panel is not affected merely because there is a vacancy or vacancies in the membership of the Panel.

56   Terms and conditions of Panel members

             (1)  Each member of the Panel is to be appointed on a part-time basis.

             (2)  The remuneration and allowances and the other terms and conditions of each member’s appointment (including the duration of appointment) are to be as agreed in writing by the Minister and the member.

57   Procedures of the Panel

             (1)  In any vote of the Panel, the Chair has a deliberative vote and, if the votes are equal, has a casting vote.

             (2)  Otherwise, the regulations may provide for the procedures of the Panel.

             (3)  Subject to those regulations and subsection (1), the Panel may determine its own procedures.

Procedures relating to Panel review of contributions

             (4)  The procedures determined under this section may allow for applications for review made under section 68 to be heard and determined by one or more members of the Panel instead of by the Panel as a whole.



 

Division 4 Annual Fund contributions and special levies

Subdivision A Annual Fund contributions

58   Fund Manager to set contributions

             (1)  For each calendar year, the Fund Manager must determine the amount of annual Fund contribution required from each provider who is required to pay a contribution.

Note:          The regulations may exempt some providers from the requirement to pay an annual Fund contribution: see section 24.

             (2)  In doing so, the Fund Manager must apply the contributions criteria determined under this Division.

59   How the contributions criteria are determined

Fund Manager to give draft contributions criteria

             (1)  The Fund Manager must give the Panel a set of draft contributions criteria.

             (2)  The Panel must either accept the draft without alteration or ask the Fund Manager to revise it.

Accepting the draft without alteration

             (3)  If the Panel accepts the draft without alteration, then the contributions criteria are as set out in the draft.

Revision of draft

             (4)  If the Panel asks the Fund Manager to revise the draft, the Fund Manager must do so and give the revised draft to the Panel. The Panel must deal with the revised draft in the same way as an original draft.

Panel may ultimately determine the contributions criteria

             (5)  If, after considering any revised draft or drafts, the Panel concludes that the Fund Manager will not be able to propose a draft that is acceptable to the Panel, the Panel may determine the contributions criteria itself.

60   Content of the contributions criteria

             (1)  The contributions criteria:

                     (a)  must be determined having regard solely to the purpose of the Fund; and

                     (b)  must enable the amount of contribution for each provider to reflect, at least to some extent, the risk of calls being made on the Fund in respect of that provider.

Tuition assurance schemes

             (2)  One of the contributions criteria must be whether the provider in question is a member of a tuition assurance scheme.

Security over assets

             (3)  The contributions criteria may allow for a reduction of a provider’s contribution if the provider agrees to the Fund Manager taking a charge or other security over an asset or assets of the provider.

61   Changing the contributions criteria

             (1)  The Panel may ask the Fund Manager to draft, and give to the Panel, changes to the contributions criteria. The Fund Manager must comply with the request.

             (2)  Alternatively, the Fund Manager may give the Panel draft changes on its own initiative.

             (3)  Either way, the contributions criteria must not be changed more than once each year.

             (4)  The procedure for dealing with the draft changes is the same as that for dealing with draft contributions criteria under section 59.

             (5)  The changed contributions criteria must still meet the requirements in section 60.

             (6)  In this section:

change includes add to, revoke or substitute.

62   Dissemination of contributions criteria

                   When contributions criteria, or changed contributions criteria, have been determined, the Fund Manager must make them publicly available.

63   Notice of amount of annual Fund contribution

             (1)  The Fund Manager must give a written notice to each provider who is liable to pay an annual Fund contribution stating:

                     (a)  the provider’s amount of contribution; and

                     (b)  if the provider is registered—the day by which the provider must pay the contribution.

Note 1:       There is no particular due day for unregistered providers, but they cannot get registered until they have paid their contribution: see paragraph 9(2)(b).

Note 2:       The provider may seek a review of the amount of annual Fund contribution from the Fund Manager and then the Panel: see sections 66 and 68.

             (2)  The day mentioned in paragraph (1)(b) must be at least 14 days after the notice is given to the registered provider.

64   Notifying the Secretary of initial contributions

                   The Fund manager must notify the Secretary when a provider who is not yet registered has paid its first annual Fund contribution.

Note:          The Secretary needs to know when this has happened so that the provider can be registered: see paragraph 9(2)(b).

65   Increasing annual Fund contributions

             (1)  This section applies if, at any time after having given a notice to a provider under section 63, the Fund Manager decides, on the basis of new information, that the provider’s required contribution for the year should be increased.

             (2)  The Fund Manager must give another written notice to the provider stating:

                     (a)  its new amount of annual Fund contribution; and

                     (b)  if the provider is registered—the day by which the provider must pay the outstanding amount of the contribution.

Note:          There is no particular due day for unregistered providers, but they cannot get registered until they have paid their contribution: see paragraph 9(2)(b).

             (3)  The day mentioned in paragraph (2)(b) must be at least 14 days after the notice is given to the registered provider.

Subdivision B Rights of review

66   Applying to the Fund Manager for a review of the contribution amount

             (1)  A provider may apply in writing to the Fund Manager for a review of the determination of its amount of annual Fund contribution.

Provider may only challenge application of criteria

             (2)  The provider may only challenge the application of the contributions criteria to the particular provider; not the contributions criteria themselves.

Time limit for application

             (3)  The application must be made within 14 days after the provider is given the notice under section 63 or 65, or such longer time as the Fund Manager allows.

Provider must pay contribution on time

             (4)  A registered provider must still pay its annual Fund contribution on time even if the provider has applied for a review under this section.

Note:          There is no particular due day for unregistered providers, but they cannot get registered until they have paid their contribution: see paragraph 9(2)(b).

67   Review by the Fund Manager

             (1)  On a review, the Fund Manager must either:

                     (a)  dismiss the application; or

                     (b)  substitute a different amount of annual Fund contribution for the provider.

             (2)  The Fund Manager must give the provider written notice setting out:

                     (a)  the Fund Manager’s decision, including a statement of reasons; and

                     (b)  the provider’s new amount of annual Fund contribution, if it has changed; and

                     (c)  if the provider is registered—the day by which the provider must pay any outstanding amount of the contribution.

Note:          There is no particular due day for unregistered providers, but they cannot get registered until they have paid their contribution: see paragraph 9(2)(b).

             (3)  The day mentioned in paragraph (2)(c) must be at least 14 days after the notice is given to the registered provider.

68   Applying for review by the Panel

             (1)  If the provider is dissatisfied with the outcome of the review by the Fund Manager, the provider may apply in writing to the Panel for a further review of the determination of its amount of annual Fund contribution.

Grounds for challenging application

             (2)  The provider may only challenge the application of the contributions criteria to the particular provider; not the contributions criteria themselves.

Time limit on application

             (3)  The application must be made within 14 days after the notice is given to the provider under section 67, or such longer time as the Panel allows.

Provider must pay contribution on time

             (4)  A registered provider must still pay its annual Fund contribution on time even if the provider has applied for a review under this section.

69   Review by the Panel

             (1)  On a review, the Panel must either:

                     (a)  dismiss the application; or

                     (b)  send the decision back to the Fund Manager with binding written directions as to how the contributions criteria should be applied in the particular circumstances.

Note:          The application may be determined by one or more members of the Panel, instead of by the Panel as a whole, if the Panel’s procedures allow this: see subsection 57(3).

             (2)  The Panel must give the provider written notice of its decision, including a statement of reasons.

             (3)  In a paragraph (1)(b) case, the Fund Manager must reconsider the original decision in light of the directions and then give the provider a written notice stating:

                     (a)  its amount of annual Fund contribution; and

                     (b)  if the provider is registered—the day by which the provider must pay any outstanding amount of the contribution.

Note:          There is no particular due day for unregistered providers, but they cannot get registered until they have paid their contribution: see paragraph 9(2)(b).

             (4)  The day mentioned in paragraph (3)(b) must be at least 14 days after the notice is given to the registered provider.

70   Fees for review

             (1)  The regulations may prescribe fees payable for an application for review by the Fund Manager or the Panel.

             (2)  The fee is payable to:

                     (a)  the Fund Manager, for a review by the Fund Manager; or

                     (b)  the Secretary, for a review by the Panel.

             (3)  The fees must not amount to taxation.

71   Refund of overpaid contributions

                   If a review under this Subdivision results in a lower amount of annual Fund contribution, then the Fund Manager must refund or remit the difference.

Subdivision C Special levies

72   Special levies

             (1)  If at any time the Fund Manager considers that the Fund does not have enough money to meet its current or future liabilities, the Fund Manager may require all registered providers who are liable to pay an annual Fund contribution for that year to pay a special levy to the Fund Manager.

             (2)  However, the Fund Manager must obtain the approval of the Panel before imposing the requirement.

             (3)  In deciding whether to give its approval, the Panel must consider the Fund’s ability to meet its current and future liabilities, and any other relevant matter.

73   Amount of the levy

                   The amount of each registered provider’s special levy must correspond, so far as practicable, to the provider’s proportion of the total of the annual Fund contributions required of registered providers for the year.

Example:    Assume that, as a registered provider, Anne was required to pay an annual Fund contribution of $1,000, which represented 1% of the total annual Fund contributions required from all registered providers for the year. If the Fund Manager decided that special levies totalling $50,000 were needed, Anne’s special levy would be $500 (1% of $50,000).

74   Fund Manager must give written notice

             (1)  The Fund Manager must give a written notice to each registered provider who is liable to pay an amount of special levy stating:

                     (a)  the amount of the special levy; and

                     (b)  the day by which the provider must pay the amount.

             (2)  The day mentioned in paragraph (1)(b) must be at least 14 days after the notice is given to the registered provider.

Subdivision D Reminder notices for late payers

75   Reminder notices

             (1)  The Fund Manager must give a reminder notice to a registered provider who has not paid an amount of annual Fund contribution or special levy by the end of the due day.

             (2)  The reminder notice must:

                     (a)  specify the amount that is still owing; and

                     (b)  state that the registered provider must pay the amount, along with the associated late payment penalty, by the end of the seventh day after the reminder notice is given to the provider; and

                     (c)  set out the effect of section 90.

Note:          Section 90 provides that the provider’s registration is automatically suspended if the provider does not comply with the reminder notice.

             (3)  The Fund Manager must tell the Secretary if the registered provider fails to comply with the reminder notice.



 

Division 5 Calls on the Fund

76   When a call is made on the Fund

             (1)  A call is made on the Fund if the Fund Manager determines that, for an overseas student or an intending overseas student in relation to a course for which there is or was a registered provider:

                     (a)  the provider is required to refund an amount to the student under Division 2 of Part 3; and

                     (b)  it appears that the provider will be unable to satisfy its obligations to the student under that Division; and

                     (c)  the student is not able to be placed promptly in a suitable alternative course under a tuition assurance scheme or by any other means.

             (2)  However, a call is not made on the Fund if the provider was exempt under the regulations from making an annual Fund contribution to the Fund for the year.

77   What the Fund Manager must do when a call is made

             (1)  If a call is made on the Fund, the Fund Manager must, as soon as practicable:

                     (a)  in consultation with the overseas student or intending overseas student, place him or her in a course in Australia that the Fund Manager regards as a suitable alternative course; or

                     (b)  failing that—pay the student, out of the Fund, an amount equal to the amount that the provider must still pay the student in order to satisfy the refund requirements under Division 2 of Part 3.

             (2)  In placing a student in an alternative course, the Fund Manager may spend more than the amount of that refund entitlement if the Fund Manager considers that to do so would best promote the purpose of the Fund.

78   Taking the student’s place as creditor

Cessation of student’s claim

             (1)  After the Fund Manager pays an amount under section 77 to or for a student, the student ceases to have any claim against the provider in respect of the student’s course money.

Provider must pay back Fund Manager

             (2)  Instead, the provider must pay the Fund Manager an amount equal to the amount that the Fund Manager paid under section 77.

             (3)  The Fund Manager may recover that amount from the provider as a debt due to the Commonwealth by action in a court of competent jurisdiction.

Fund Manager may enforce security

             (4)  If the provider had granted the Fund Manager a charge or other security over any of its assets, the Fund Manager may enforce the charge or security in satisfaction, or partial satisfaction, of the debt.



 

Division 6 Miscellaneous

79   Investments

                   The Fund Manager may invest money standing to the credit of the Fund that is not immediately required for the purpose of the Fund:

                     (a)  on deposit with an authorised deposit-taking institution (within the meaning of the Banking Act 1959 ); or

                     (b)  in securities of the Commonwealth or of a State; or

                     (c)  in securities guaranteed by the Commonwealth or a State; or

                     (d)  in any other manner that is consistent with sound commercial practice.

80   Financial accountability

Auditor to prepare written report

             (1)  As soon as practicable after the end of each calendar year, the Fund Manager must arrange for an independent auditor to prepare a written report on the financial state of the Fund.

             (2)  The auditor must be a person who:

                     (a)  is registered, or is taken to be registered, as a company auditor under Part 9.2 of the Corporations Law; or

                     (b)  is a member of the Institute of Chartered Accountants in Australia, the Australian Society of Certified Practising Accountants or any other body prescribed for the purposes of subparagraph 1280(2)(a)(i) of the Corporations Law; or

                     (c)  is approved by the Secretary as an auditor for the purposes of this section.

             (3)  The report must be given to the Minister and the Panel.

Minister may require other reports

             (4)  The Minister may at any time give the Fund Manager a written notice requiring the Fund Manager to arrange for other reports about the Fund.

             (5)  The Minister must publish a copy of the notice in the Gazette .

81   No income tax

                   To avoid doubt, the Fund Manager does not have to pay income tax on amounts of annual Fund contribution or special levy collected.

82   Future cessation of the Fund

             (1)  If the Parliament passes an Act providing for the cessation of the Fund, then any surplus money of the Fund at the time of the cessation must be repaid to providers who were liable to pay an annual Fund contribution for the year in which the cessation occurs.

             (2)  The regulations may provide for details of how those repayments are to be worked out, and for other matters relating to such repayments.