The abolishment and replacement of Subclass 457 visa

On the 18^thApril the Department of Immigration and Prime Minister Turnbull announced major reforms to the Subclass 457 visa, abolishing what is known as the Temporary Work (Skilled) subclass 457 visa and replacing with the Temporary Skill Shortages (TSS) visa.

Together with this major reform both the Skilled Occupation List (SOL) and Consolidated Sponsored Occupation Lists (CSOL) were reduced and renamed.

Medium and Long-term Strategic Skills List (MLTSSL) replaced the previous ‘Skilled Occupation List’ (SOL) and Short-term Skilled Occupation List (STSOL) replaced the previous ‘Consolidated Sponsored Occupation List’ (CSOL).

The TSS visa programme will be comprised of a Short-Term stream of up to two years and a Medium-Term stream of up to four years.

The proposed changes will be rolled out between April 2017 and March 2018.

Changes for 457 visa from April 19^th 2017

• 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.
• Of the 435 occupations, access to 24 occupations has been restricted to regional Australia (e.g. occupations relating to farming and agriculture).
• Validity period: 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.

Changes From 1 July 2017, for the existing 457 visa:

• 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 salary exemption threshold, which provides an exemption for applicants whose salary is over $96,400 from the English language requirement, will be removed.
• Policy settings about the training benchmark requirement will be made clearer in legislative instruments.
• Provision of penal clearance certificates will become mandatory. The implementation of these reforms will begin immediately and will be completed in March 2018.

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 being paid their nominated salary.
• The Department will commence the publication of details regarding sponsors who have been sanctioned for failing to meet their obligations under the Migration Regulations.

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

The Short-Term stream is designed for Australian businesses to fill skill gaps with foreign workers on a temporary basis, and 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 capacity for visa renewal onshore once only.

If you live in non-regional Australia, the STSOL will apply, However applicants residing in regional Australia will have access to additional occupations on top of the STSOL.

English language minimum requirements will be an International English Language Testing System (IELTS) (or equivalent test) score of 5, with a minimum of 4.5 in each test component.

The Short-Term stream applicants will be required to satisfy a genuine temporary entrant requirements.

The Medium-Term stream will have capacity for visa renewal onshore and a permanent residence pathway after three years.

If you live in non-regional Australia, the MLTSSL will apply, However applicants residing in regional Australia will have access to additional occupations on top of the MLTSSL.

English language minimum 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 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.

More details surrounding these policies for several of these requirements will be finalised through the implementation process and made available to the public.

457 visa applicants that had lodged their application on or before 18 April 2017, and whose application had not yet received a decision from DIBP, with an occupation that has been removed from the STSOL, may be eligible for a refund of their visa application fee. Nominating businesses for these applications may also be eligible for a refund of related fees.

For assistance with your employer sponsored visa please contact us and book your initial consultation today.