The Temporary Work (Skilled) Visa program (457 visa) commenced in 1996 with the objective of addressing genuine skill shortages in the Australian labour market. Employers (known as business sponsors) could recruit overseas workers for skilled positions for which they could find no suitable local candidates.
The 457 visa allowed migrants to work in Australia for four years and for many, provided a pathway for permanent residency. Visa holders could also apply to bring family members to Australia on a 457 secondary visa.
In April 2017, the Government announced that the 457 visa will be abolished and replaced with a completely new skilled migration scheme. Changes will be implemented in stages with a new Temporary Skill Shortage (TSS) visa anticipated to be fully operational, and the 457 visa obsolete, by March 2018.
The reforms are expected to improve the integrity of Australia’s skilled migration program which has previously been subject to exploitation, and to increase the supply of Australian skilled labour by encouraging employers to invest in local training and development.
Visa applicants will face more stringent processes for securing a visa and businesses will have fewer alternatives and higher requirements for sourcing skilled labour from overseas. Several occupations have been removed from the eligible categories list and higher thresholds must be met for the grant of a visa.
This article explains the implications of the reforms to employers and visa holders.
The new TSS visa – what it means for visa applicants and employers
The TSS visa will comprise a short-term and medium-term stream.
The short-term stream will permit employers to fill temporary skills gaps identified from a list of occupations on the Short-Term Skilled Occupations List (STSOL) for two years.
The medium-term stream targets long-term skills gaps and is designed to fill more narrowly-defined and highly-skilled occupation categories appearing on the Long-Term Strategic Skills List (MLTSSL). This visa will last for four years.
Less occupations available for visa grants
The STSOL and MLTSSL replace the previous listings of eligible occupations for skilled migration, reducing the number of categories from 651 to 435. Of these, 268 will be available for the short-term (two year) visa and 167 for the long-term (four year) visa.
Amongst the most commonly-used occupations to be removed are human resource advisors, production managers in the manufacturing industry, sales representatives (industrial products), IT professionals (web developers) and training and development professionals. Other occupations and industries affected include accommodation and food services, biochemistry, performance and arts, legal workers and migration agents.
Shorter visa stays and less opportunity for permanent residency
The grant of a 457 visa enabled the holder to remain in Australia for up to four years and, if eligible, to apply for permanent residency after two years. The reforms have had a significant impact upon this.
The maximum duration for the short-term TSS visa will be two years with a once-only onshore renewal capacity. The visa will not provide an opportunity for permanent residency.
The maximum duration for the medium-term TSS visa will be four years with an onshore renewal capacity. The medium-term TSS visa will provide a pathway for permanent residency however visa holders will need to wait for three years before applying (as opposed to the two-year wait under the 457 visa).
Essentially, there will be fewer occupations and opportunities enabling work-related migration to, and permanent residency in, Australia.
More stringent processes for visa applicants
Short-term and medium-term visa applicants will need to demonstrate at least two years’ relevant work experience in their chosen occupation category. This was not previously necessary under the 457 program.
The minimum age limit for a temporary work visa under the previous system was 50 years – this has been reduced to 45 years.
Official criminal clearances will be mandatory for both categories as opposed to the self-declaration system used previously.
Higher standards of English proficiency will apply – applicants for a short-term visa will need a minimum EILTS (or equivalent) score of 5 with a minimum of 4.5 in each test component and applicants for a medium-term visa will require a minimum of IELTS 5 (or equivalent test) in each component. The exemption for certain applicants to meet the English language requirement (currently those whose salary is over $96,400) will be removed.
Visa holders will need to provide Tax File Numbers to the Department of Immigration and Border Protection for cross-checking with the Australian Taxation Office to ensure conformity with salary requirements.
More stringent processes for businesses
Businesses must pay visa holders a market salary rate and meet the Temporary Skilled Migration Income Threshold (TSMIT) to ensure that overseas workers are not exploited and Australian workers cut out of a position.
Non-discriminatory workforce testing will also apply, designed to ensure businesses are not actively discriminating against Australian workers. Labour market testing will continue to apply in most cases.
Business sponsors will be required to contribute to a Skilling Australians Fund at the time of nominating a visa applicant. The fee will be $1,200 per year or part year for small business (with a turnover of less than $10 million) and $1,800 per year or part year for all other businesses.
The application fees for TSS visas will be higher than the 457 visa which was last set at $1,060. The fee for the short-term visa will be $1,150 and for the medium-term visa $2,400.
Business sponsors who fail to meet their obligations under the skilled migration visa scheme will be made public.
What about current 457 visa holders and applicants?
The reforms will not affect current 457 visa holders with existing conditions remaining intact.
Applicants for 457 visas who lodged an application on or before 18 April 2017, for an occupation that has been removed from the previous eligible categories, and the sponsoring business for the applicant, may be eligible for a refund of fees.
The reforms narrow the range of occupations available for overseas workers to apply for a visa and restrict businesses to fewer opportunities to recruit from overseas. The deletion of several occupations is considered more suited to Australia’s skills shortage and the overall changes necessary to protect Australian workers, discourage exploitation and encourage more investment in training and development.
The visa process is notoriously complex and the reforms have significant impact upon visa applicants and employers.
If you think you will be affected by the new reforms, or you know somebody who wants more information or needs help or advice, please contact us on 02 9955 6692 or email firstname.lastname@example.org