Practice Intelligence | Subclass 500
Why the Money Is There and the Visa Still Gets Refused: Source and Liquidity Failures in Student Visa Financial Evidence
The Department does not just count the funds. It scrutinises where they came from and whether the applicant can actually access them. Two avoidable refusal patterns are appearing with increasing frequency in 2025-26.
By Jan Bejcek, MARN 0965239 | Updated June 2026
Three refusals landed in my inbox within the same week. Different applicants, different nationalities, different providers. The same underlying problem across all three: the financial evidence failed not because the money was absent, but because the source or accessibility of the funds did not satisfy the Department’s genuineness test.
This is not a fringe issue. Source and liquidity failures are among the most consistent causes of financial refusal for Subclass 500 applicants, and they are almost entirely avoidable with correct preparation.
What the Department Is Actually Assessing
The Subclass 500 financial capacity requirement is set out in the Migration Regulations and updated periodically by the Department of Home Affairs. As at 2026, the minimum thresholds are:
| Requirement | Amount (AUD) |
|---|---|
| Living costs (12 months, primary applicant) | $29,710 |
| Spouse or partner (additional) | $10,394 |
| Each dependent child (additional) | $4,449 |
| First 12 months tuition (or full fees if course is shorter) | Varies by provider |
| Return travel costs | $1,000 to $3,000 |
There is also an alternative income pathway. An annual personal or parental income of AUD $87,856 in the 12 months prior to application (or $102,500 if the family accompanies the applicant) can substitute for the savings evidence in some cases. This pathway works best when the income is salaried, formally documented, and verifiable through tax records.
Meeting the numbers is necessary. It is not sufficient. The Department also applies a genuineness test to the source and accessibility of the funds.
Refusal Pattern One: Funds from a Non-Related Entity
The first pattern involves funds held in a company account, business entity, or trust rather than a personal account. This appears most frequently with applicants whose families operate businesses in their home country.
The problem is structural. Even if the applicant is a director or beneficiary, the Department treats funds held by an entity as belonging to the entity. Unless there is clear evidence that the funds can be freely drawn for personal use by the applicant, the evidence fails.
What is needed to make business or entity funds work:
- Company financial statements (audited if available) showing the entity’s net asset position
- Evidence of the applicant’s ownership stake or directorship
- A formal resolution, letter of confirmation, or accountant’s letter stating that the specified funds are available for the applicant’s personal use for the visa purpose
- A history of distributions or drawings from the entity to the applicant’s personal account
Without that chain of evidence, the business funds are invisible to the Department for the purpose of meeting financial capacity. The account balance does not matter.
Refusal Pattern Two: Locked Funds (Term Deposits)
The second pattern involves term deposits being included in the financial evidence package. A term deposit certificate shows the right number. The application still fails.
The reason is liquidity. A term deposit is locked for a fixed period. The funds are not available on demand. The Department’s financial capacity assessment is concerned with whether the applicant can actually access and use those funds during the proposed period of study. A deposit that cannot be broken without penalty or that does not mature until after the intended travel date does not satisfy that requirement.
This is a common mistake in markets where term deposits are a preferred savings vehicle. Families accumulate funds responsibly in a fixed-term instrument, and the agent or the applicant assumes the certificate is strong evidence. It is, but only for the amount and the existence of savings. It does not demonstrate liquidity.
The fix is straightforward: either break the term deposit into a savings or transaction account before lodgement (with a sufficient settling period), or supplement it with liquid funds that meet the threshold independently. Document the transfer clearly so the history is traceable.
What Strong Financial Evidence Looks Like
The Department looks for a consistent savings pattern over three to six months, held in the applicant’s or a parent’s personal account, in a liquid form, with a traceable and explainable history. Specifically:
- Account type: savings, transaction, or fixed deposit where early access is possible
- Account holder: applicant or immediate family member (parent/guardian), not a company, trust, or distant relative
- History: at least 3 months, ideally 6, with no unexplained large deposits immediately before the statement period ends
- Balance consistency: funds should be present across the statement period, not appearing only in the final week
- Supporting documents: payslips, employment letters, or tax returns that explain where the funds come from
Sudden large deposits are among the most reliable triggers for further scrutiny or refusal. If a client’s parent is providing support, the transfer needs to be documented with the parent’s own bank history showing the funds were already in their possession before the transfer occurred.
Acceptable Evidence: A Practical Reference
| Evidence Type | Acceptable | Notes |
|---|---|---|
| Personal savings (liquid) | Yes | Strongest form. Needs 3-6 months history. |
| Term deposit (accessible) | Partial | Acceptable if maturity date precedes travel or early access is documented. |
| Term deposit (locked) | No | Fails liquidity test. Do not rely on this alone. |
| Parent or guardian personal account | Yes | With supporting relationship evidence and sponsor declaration. |
| Company or business account | No | Fails source test unless supported by entity documents and access evidence. |
| Education loan (formal) | Yes | Loan sanction letter from a recognised financial institution. |
| Unexplained large deposit | No | Red flag regardless of amount. Explain all deposits above normal income level. |
What RMAs Should Be Doing Before Lodgement
These refusals are not the applicant’s fault. They are a preparation failure. The agent’s job is to assess the financial evidence before it goes to the Department, not after.
A pre-lodgement financial evidence review should cover four questions:
- Is the total sufficient? Calculate against the current thresholds including tuition and travel, not just the living cost figure.
- Is the source appropriate? Personal account in the applicant’s or a parent’s name. Entity funds need additional documentation to bridge the gap.
- Are the funds liquid? Can the applicant access this money on arrival? If any portion is in a term deposit, confirm the maturity date and early access conditions.
- Is the history clean? Three to six months of statements with no unexplained large inflows. If there are transfers from a business or a third party, document the chain.
If any of these four questions cannot be answered cleanly, the lodgement should wait until they can. A delay of four to eight weeks to correct the financial evidence is always preferable to a refusal and the re-application costs that follow.
Department Reference
The current financial capacity thresholds are published by the Department of Home Affairs. Use the Department’s Evidentiary Tool to confirm requirements for your applicant’s specific circumstances before lodgement.
Source: Department of Home Affairs Financial Capacity Notice (updated 2026). MARN 0965239. This post is general information only and does not constitute migration advice for a specific matter.