Changes to the Subclass 457 Visa Program

msi - visa15By Emma Swenson, Independent Migration Consultant to Patterson Houen & Commins, Lawyers, Sydney.
MARN: 9801418

The government has recently implemented some of the recommended changes to the 457 visa program, which is good news for businesses looking to sponsor overseas workers.

In summary, the changes are:

1.  Market salary:

Employers are not required to provide evidence of the market salary for a position, if the sponsored worker is to be paid more than $180,000 per annum (reduced from $250,000 per annum).

2. Temporary Skilled Migration Threshold (TSMIT):

The TSMIT will remain at $53900 per annum.

3.  English language requirement:

  • The English language requirement has been reduced to an overall score of 5.0 on the IELTS test (with a minimum of 4.5 on each component).
  • There is an exemption for 5 years cumulative study where all instruction is in English (it no longer has to be 5 consecutive years’ study).
  • The following English tests are acceptable (as alternatives to the IELTS test):
    • Test of English as a Foreign Language internet based test (TOEFL iBT) – overall 36 (minimum 3 in listening & reading, minimum 12 in speaking and writing). Single sitting.
    • Pearson Test of English (PTE) – Academic – overall 36 (minimum 30 in each component). Single sitting.
    • Cambridge English Advanced Test (CAE) – overall 154 (minimum 147 in each component). Single sitting test taken on or after 1 January 2015.
    • Occupational English Test (OET) – B in each component.

4. Sponsorship approval period:

  • The current sponsorship approval period has been increased from 3 years to 5 years.
  • The current sponsorship approval period for start up businesses has been increased from 12 months to 18 months.

These changes to the sponsorship approval period only affect new applications, they do not apply to current sponsorship approvals.

In March this year, the government also gave it’s support to the following recommendations (but these have not yet been implemented):

1.  Labour market testing:

That the labour market testing requirement be abolished.  While many occupations are exempt from the requirement, it is still required for occupations with lower skill levels.  The government’s view is that the labour market testing conducted by employers is not “fully reliable” and has yet to fully support abolition.  It will be interesting to see what happens with this issue.

2.  Occupation List:

That the Consolidated Skilled Occupations List be amended to include skilled occupations which exist in the community but are not currently on the list.  However, occupations which are considered “semi-skilled” (eg ANZSCO skill level 5-9) are still only available under the labour agreement program. This would include for example, deckhands/fishing hands.

3.  Temporary Skilled Migration Threshold (TSMIT):

  • That the TSMIT remains at $53900 per annum (implemented).
  • That a reduction of up to 10% be considered.
  • That a concession be made available in regional areas, but only where evidence clearly supports the concession.

4.  Training Benchmarks:

That the current training benchmarks be abolished and replaced by an annual contribution to a training fund based on each 457 visa holder sponsored, and calculated according to the size of the business.  The funding is to be used for various training programs and initiatives. The training fund contribution cannot be passed on to a third party (including the 457 visa holder).

5.  Application fees:

That these be reviewed, particularly for family members and renewals of visas

6.  Labour agreements:

  • That the processing times be reduced and streamlined.
  • That further templates be developed for industries of need where there are identified labour shortages.

7.  Pathways to permanent residence:

  • That the 457 visa holder be required work in Australia for 2 years, including one year with the nominating employer (currently 457 visa holders must work for 2 years with the nominating employer, so if they change employer whilst holding a 457 visa, the 2 years starts again).
  • That the age restriction for 457 visa holders transitioning to permanent residence under the employer-sponsored program (ENS or RSMS) be reviewed.  (Currently the age limit is 50, with limited exemptions available).

8.  Monitoring of businesses and the Fair Work Ombudsman:

That priority be given to monitoring of business sponsors, with the assistance of the Fair Work Ombudsman. (DIBP currently conducts business monitoring to check that sponsors are complying with their obligations.  Non-compliance can result in sanctions being imposed, including cancellation of the sponsorship approval).

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