Changes to 457 visa on 18 April 2017

On 18 April 2017, Australian government announced that the Temporary Work (Skilled) visa (subclass 457 visa) will be abolished and replaced with the completely new Temporary Skill Shortage (TSS) visa which will support businesses in addressing genuine skill shortages. The TSS visa programme was announced to be comprised of a Short-Term stream of up to two years and a Medium-Term stream of up to four years and will support businesses in addressing genuine skill shortages in their workforce and will contain a number of safeguards which prioritise Australian workers.

Important: Everyone should be aware that some of the changes referred to below are in effect as of 19 April 2017. This means that you will be unable to avoid the changes to the list of eligible skilled occupations and/or visa validity periods by quickly lodging new subclass 457 nomination or visa applications.

We were recommend by DIBP that we should focus on considering whether:

• withdrawing and seeking a refund may be appropriate for some of  on hand applications impacted by the changes; and

• caveats may impact any subclass 457 applications that was planned to lodge later.

 

Key reforms include:

• Introducing the temporary skill shortage visa with new requirements, including but not limited to:
  • new, more targeted occupation lists which better align with skill needs in the Australian labour market
  • a requirement for visa applicants to have at least two years’ work experience in their skilled occupation
  • a minimum market salary rate which ensures that overseas workers cannot be engaged to undercut Australian workers
  • mandatory labour market testing, unless an international obligation applies,
  • capacity for only one onshore visa renewal under the Short-Term stream
  • capacity for visa renewal onshore and a permanent residence pathway after three years under the Medium-Term stream
  • the permanent residence eligibility period will be extended from two to three years
  • a non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workers
  • strengthened requirement for employers to contribute to training Australian workers
  • the Department of Immigration and Border Protection will collect Tax File Numbers and data will be matched with the Australian Tax Office’s records, and
  • mandatory penal clearance certificates to be provided.
• Tightening eligibility requirements for employer sponsored permanent skilled visas, including but not limited to:
  • tightened English language requirements
  • a requirement for visa applicants to have at least three years’ work experience
  • applicants must be under the maximum age requirement of 45 at the time of application
  • strengthened requirement for employers to contribute to training Australian workers, and
  • employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold¹.
• Concessions for regional Australia will continue to be available:
  • Employers in regional Australia will continue to have access to occupations under the temporary and permanent visas, to reflect their skills needs.
  • Existing permanent visa concessions for regional Australia, such as waiving the nomination fee and providing age exemptions for certain occupations, will be retained. Consideration will be given to expanding the occupations in regional Australia that are exempt from the age requirement.

The implementation of these reforms will begin immediately and will be completed in March 2018.

 

However the most important changes made on the time of the announcement was a change in the occupation lists used for skilled migration visas, including the subclass 457 visa, from 19 April 2017. This changes has profound effect on 457 visa program as many of the occupations has already removed from the new occupation lists and/or tightening conditions added. The occupation lists that underpin the 457 visa will be significantly condensed from 651 to 435 occupations, with 216 occupations removed and access to 59 other occupations restricted.

The other changes are as follow:

From 19 April 2017, for the existing 457 visa:

• Of the 435 occupations, access to 24 occupations has been restricted to regional Australia (e.g. occupations relating to farming and agriculture).
• The Consolidated Sponsored Occupation List (CSOL) will also be renamed as the new Short-term Skilled Occupations List (STSOL) and will be updated every six months based on advice from the Department of Employment.
• The other occupations list used for skilled migration, the Skilled Occupations List (SOL) will be renamed the new Medium and Long-term Strategic Skills List (MLTSSL). This list will contain occupations that have been assessed as being of high value to the Australian economy and aligning to the Government’s longer term training and workforce strategies.
• A separate fact sheet about the occupation lists’ changes will be issued.
• The maximum duration of 457 visas issued from this date for occupations that are on the STSOL will be two years. Occupations on the MLTSSL will continue to be issued for a maximum duration of four years.

From 1 July 2017, for the existing 457 visa:

• Occupation lists: The STSOL will be further reviewed based on advice from the Department of Employment. The MLTSSL will be revised based on outcomes from the Department of Education and Training’s 2017-18 SOL review.
• English language requirements: English language salary exemption threshold, which exempts applicants whose salary is over $96,400 from the English language requirement, will be removed.
• Training benchmarks: Policy settings about the training benchmark requirement will be made clearer in legislative instruments.
• Character: Provision of penal clearance certificates will become mandatory.

Before 31 December 2017, for the existing 457 visa:

• The Department of Immigration and Border Protection (the Department) will commence the collection of Tax File Numbers for 457 visa holders (and other employer sponsored migrants), and data will be matched with the Australian Tax Office’s records to ensure that visa holders are not paid less than their nominated salary.
• The Department will commence the publication of details relating to sponsors sanctioned for failing to meet their obligations under the Migration Regulation 1994 and related legislation.

From March 2018, the 457 visa will be abolished and replaced with the TSS visa.

The TSS visa will be comprised of a Short-Term stream of up to two years, and a Medium-Term stream of up to four years. The Short-Term stream is designed for Australian businesses to fill skill gaps with foreign workers on a temporary basis, where a suitably skilled Australian worker cannot be sourced. The Medium-Term stream will allow employers to source foreign workers to address shortages in a narrower range of high skill and critical need occupations, where a suitably skilled Australian worker cannot be sourced.

The Short-Term stream will include the following criteria:

• Renewal: Capacity for visa renewal onshore once only.
• Occupations:
  • For non-regional Australia, the STSOL will apply.
  • For regional Australia, the STSOL will apply, with additional occupations available to support regional employers.
•  English language requirements: A requirement of an International English Language Testing System (IELTS) (or equivalent test) score of 5, with a minimum of 4.5 in each test component.
• Genuine entry: A genuine temporary entrant requirement.

The Medium-Term stream will include the following criteria:

• Renewal: Capacity for visa renewal onshore and a permanent residence pathway after three years.
• Occupation lists:
  • For non-regional Australia – the MLTSSL will apply.
  • For regional Australia – the MLTSSL will apply, with additional occupations available to support regional employers.
•  English language requirements: a requirement of a minimum of IELTS 5 (or equivalent test) in each test component.

Eligibility criteria for both streams will include:

• Work experience: at least two years’ relevant work experience.
• Labour market testing (LMT): LMT will be mandatory, unless an international obligation applies.
• Minimum market salary rate: Employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold requirements.
• Character: Mandatory penal clearance certificates to be provided.
• Workforce: A non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workers.
• Training requirement: a strengthened training requirement for employers to contribute towards training Australian workers

Source: www.border.gov.au/Trav/Work/457-abolition-replacement