On 19 April 2017 the Australian Government announced the abolition of the 457 visa programme which will take place in March 2018. A new Temporary Skills Shortage (TSS) visa programme will replace the existing 457 visa programme.
Since the announcement was made, we at Work Visa Lawyers have received many questions from:
- 457 visa applicants about any new requirements
- 457 visa holders asking about visa validity and changing employers
- 457 visa holders intending to apply for a permanent visa through the subclass 186 Employer Nomination Scheme (ENS) or subclass 187 Regional Sponsored Migration Scheme (RSMS) visa
- Employers who are or intend to be Standard Business Sponsors (SBS) for 457 visas, about how the new TSS visa will impact their operations relying on overseas workers
To assist as many as possible about understanding the coming changes, please read the information below. Please note that the information provided is generic and may not be relevant to your specific situation. Please seek a detailed consultation with a Registered Migration Agent to understand your migration options and determine the best way forward for you and your family.
I am going to apply for a 457 visa before March 2018. What has changed?
A NEW list of eligible occupations
There are new Skilled Occupation Lists for the 457 visa. Applicants will need to nominate an occupation on the Medium and Long-term Strategic Skills List (MLTSSL) or the Short-term Skilled Occupation List (STSOL).
If the nominated occupation is on the MLTSSL you can apply for a visa which can be valid for up to 4 years. If the nominated occupation is on the STSOL your 457 visa will only be valid for a maximum of 2 years.
No exemptions from English testing
There are no longer exemptions for English language testing – the English Language Salary Exemption Threshold (ELSET). Only intra-corporate transfer applicants can access this exemption from 1 July 2017.
All 457 visa applications will now require police clearance certificates from countries where the applicant(s) have resided for 12 months or more, since turning the age of 16.
Migration Skills Assessment required for some occupations
Applicants nominating for ANZSCO 511112 Project and Program Administrator or ANZSCO 139999 Specialist Manager not elsewhere classified, will have to provide a positive Skills Assessment. Trades occupations will still require a positive Skills Assessment from Trades Recognition Australia (TRA).
I am going to apply to be a Standard Business Sponsor (SBS) for the 457 visa before March 2018. What has changed?
Employers will need to meet new Training Benchmark Requirements if the Sponsorship application was lodged on or after 1 July 2017. The new training benchmarks are:
Training Benchmark A:
Recent expenditure, by the business, to the equivalent of at least 2% of the payroll of the business, in payments allocated to a training fund that operates in the same or a related industry of the business.
Recent expenditure for Training Benchmark A is defined as expenditure made in the previous financial year or the previous 12 months, as evidenced by a receipt for the payment or a letter from the relevant fund.
Expenditure is not acceptable for the purposes of meeting this benchmark where made to:
(a) training funds operated by Registered Training Organisations (RTOs) or private individuals; or
(b) funds that allocate a percentage or part of the contributions received to commissions or offer refunds for failed immigration applications.
Training funds that may be used to meet the requirement of this benchmark are:
(a) an industry training fund: that is, a statutory authority responsible for providing funding for training of eligible workers in certain industries;
(b) a fund managed by a recognised industry body that provides training opportunities in their industry and quarantines contributions to the fund for training purposes only; or
(c) a recognised scholarship fund operated by an Australian university or TAFE college only.
Training Benchmark B:
Recent expenditure, by the business, to the equivalent of at least 1% of the payroll of the business, in the provision of training of employees of the business who are Australian citizens and Australian permanent residents.
The business is also required to show that the provision of training is related to the purpose of the business.
Recent expenditure for Training Benchmark B is defined as expenditure made in the previous financial year or the previous 12 months, as evidenced by a receipt for the payment(s) or a contract for employment of the relevant individual for whom salary payments are being included within expenditure that can count towards the benchmark.
Expenditure that can count towards this benchmark includes:
- payments for Australian employees to undertake a formal course of study, including any reasonable and necessary associated costs (e.g. costs of travelling to the training venue or access an online training programme);
- payments to RTOs to deliver face-to-face training to Australian employees that will contribute to an Australian Qualifications Framework qualification;
- purchase of an eLearning platform or standalone training software;
- payments to cover the salary of Australian employees:
- engaged by the business as apprentices or trainees under a formal training contract, or
- have completed an undergraduate or higher degree in a university within the last 2 years, and
- are participating in a formal, structured graduate program for up to 2 years, or completing a professional year following their graduation;
- the salary of a person whose sole role is to provide training to Australian employees;
- expenditure to attend conferences for continuing professional development.
Expenditure that cannot count towards this benchmark includes:
(a) on the job training that is not otherwise identified above as applicable expenditure for Training Benchmark B;
(b) training that is not relevant to the industry in which the business operates;
(c) training undertaken by persons who are principals in the business or their family members;
(d) training that has a very low skill level having regard to the characteristics and size of the business;
(e) induction training;
(f) staff salaries apportioned to time spent undertaking online or other training courses;
(g) purchase of software for use in normal duties;
(h) membership fees;
(i) purchase of books, journals or magazine subscriptions;
(j) attending conferences for purposes other than continuing professional development; and
(k) hiring a booth at a trades show, conference or expo.
Definition of Payroll for Training Benchmark A and B
The definition of “payroll” is either:
(a) the total amount of the two payments specified below:
- any wages, remuneration, salary, commission, bonuses, allowances, superannuation contributions or eligible termination payments, defined as wages in payroll tax legislation for the relevant State/Territory, that the applicant has paid to their employees during the same period; and
- payments made to contractors or subcontractors during the same period if work provided by the contractor is related to the service/product provided by the applicant, regardless of whether such payments are included for payroll tax purposes or not;
(b) if the applicant does not pay either of the types of payments specified above,
- the total monetary values of the director’s salaries, fees and drawn payments; or
- the actual profit of the business
The Training Benchmarks will be replaced by the Skilling Australians Fund (SAF) levy in March 2018.
What if the position that I wish to sponsor for is no longer on the eligible occupation lists?
Since 19 April 2017 more than 200 occupations were removed from the Skilled Occupation Lists previously suitable for 457 visa applications. As such some businesses may find that the relevant position is not on the current MLTSSL or STSOL.
This means that the 457 visa programme is not suitable for the business and visa applicant. Other options to consider would include negotiating a labour agreement (a complex process), consider a different position (still need to demonstrate genuine need) or determine if an alternative visa is possible (such as the RSMS visa or other Skilled visas).
I currently hold a 457 visa. Do the changes affect me?
Your current 457 visa will be valid until it expires. This means if your current 457 visa is valid beyond March 2018, you will still be able to remain in Australia and work for your employer.
If you are changing employers, you must have a new nomination from the employer. The nomination must meet the post-July requirements. If your occupation is no longer on the MLTSSL or STSOL you will not be able to meet the new nomination requirements, and thus cannot change employers. Occupation caveats will also apply for the new nomination to change employers.
I am a 457 visa holder and was planning to apply for a permanent visa under the subclass 186 ENS or subclass 187 RSMS visa. Do the changes affect me?
If you are applying through the Temporary Transition stream, there will be transitional arrangements for you to meet the requirements after March 2018. The arrangements apply to 457 visa holders or applicants who submitted their applications before 19 April 2017. Generally speaking the previous requirements will apply.
If you submitted your 457 visa application on or after 19 April 2017, you will be subject to the new requirements, such as:
- be below age 45 for the Temporary Transition and Direct Entry streams
- must have worked for the employer for 3 years (instead of 2 years previously) for the Temporary Transition stream
All applicants for the subclass 186 ENS or subclass 187 RSMS visas on or after 1 July 2017 will need to demonstrate Competent English (IELTS 6.0 in all components, or equivalent). There are no longer salary-based exemptions for the English requirements.
The timing of your application matters!
If you meet the Temporary Transition requirements before March 2018, you can apply up to the age of 49. If you are only meeting the Temporary Transition in March 2018 or later, the transitional arrangements apply to you IF your 457 visa was applied before 19 April 2017. If your 457 visa was applied on or after 19 April 2017, the new requirements will apply.
I will not meet the Temporary Transition requirements before March 2018. Should I consider applying under the Direct Entry pathway before March 2018?
If you are not going to meet the Temporary Transition pathway before March 2018, you should definitely try to apply for the subclass 186 ENS or subclass 187 RSMS under the Direct Entry pathway, if one of the following applies:
- your age will be 45 soon, and you applied for your 457 visa on or after 19 April 2017
- your occupation is no longer listed on the occupation lists, and you applied for your 457 visa on or after 19 April 2017
If one of the above applies to you, you should definitely consider a Direct Entry pathway application as soon as possible. This is because the Direct Entry application might require time to prepare, such as Skills Assessments (some authorities take up to 3 months or more to process), or English exams. It is best that you seek the advice of a Registered Migration Agent as soon as possible and plan ahead.
General advice for all 457 visa holders
If you are looking to continue your employment or residence in Australia beyond your current 457 visa, you should immediately start looking at further visa options. In addition to making sure the pending changes in March 2018 do not affect your plans to stay on in Australia, applying for a permanent visa can provide you with social benefits such as Medicare, and also avoid school levies for your children studying in public schools.
Contact Work Visa Lawyers if you need to discuss about your visa options as a 457 visa holder, or your overseas worker if you are an employer.
This information is accurate on 24 November 2017.
Do you need help with an Australian visa or Citizenship application?
At Work Visa Lawyers we are experienced in assisting applicants in all matters relating to Australian visa applications. Our areas of expertise include Skilled Migration visas, Business Skills Migration visas, Employer Sponsored Work Visas, Partner and other Family Migration visas as well as the Administrative Appeals Tribunal (AAT) Review, Judicial Review and Ministerial Intervention.
We are also experienced in Australian citizenship applications, ranging from the usual applications to applications with character or other issues.
If you require further information regarding your Australia visa options you can contact us through:
(08) 8351 9956 or +61 8 8351 9956