The new Temporary Skills Shortage visa is here!

TSS visa By Emma Swenson, Migration Consultant, MARN:9801418, Patterson Houen Commins, Lawyers, Sydney. 

Last month the government announced the “implementation date” for the final round of changes to the temporary and permanent employer sponsored visa programs.  The changes have been introduced progressively, since April 2017.

From 18 March 2018 the subclass 457 visa has been abolished and replaced with the new TSS visa.  This does not affect existing 457 visa holders – their visas are still valid.

The Subclass 482 TSS visa – overview

The TSS visa has three streams, the short term stream (up to 2 years), the medium term stream (up to 4 years), and the labour agreement stream (for businesses who have negotiated a labour agreement with the Department of Home Affairs).  If the business does not have a labour agreement, the applicant’s nominated occupation must be on either the short term (STSOL) or medium term occupations list (MLTSSL).    The visa period is up to 2 years for occupations on the STSOL and up to 4 years for occupations on the MLTSSL and labour agreement occupations.   Some occupations must meet additional requirements.

Applicants for the short term visa can only apply for one subsequent TSS visa onshore, and they must also show that they are a genuine temporary entrant (intending to depart Australia at the end of the visa period).  For these applicants there is no pathway to permanent residence under the employer sponsored visa program.

Like the Subclass 457 visa, there are 3 steps in the TSS visa process:

  1. Sponsorship – the business applies for approval as a business sponsor (existing subclass 457 visa sponsors can use their current approval to sponsor workers for the TSS visa – there is no need to reapply for sponsorship approval)
  2. Nomination – the business nominates the applicant for full time employment in one of the occupations on either the short term or medium term list
  3. Visa – the applicant applies for the visa

Labour market testing is compulsory

Before lodging a nomination application, the business must have completed labour market testing within the last 12 months (or from June 2018, within the last 6 months) to show that the position cannot be filled by an Australian worker.  There is an exemption if certain international trade obligations apply.

There are strict criteria for advertising, so it is important to check that any advertising completed meets the requirements, (including the minimum duration of 21 consecutive days) before lodging the nomination application.

When considering whether to sponsor an overseas worker for a TSS visa, it will be important to allow sufficient lead time to meet the labour market testing requirements.

Training obligations

Businesses are currently still required to meet one of two training benchmarks, but these are no longer assessed during the sponsorship application.  The business must meet either:

  • A: contribution of 2% of total gross payroll to an industry training fund OR
  • B: expenditure of 1% of total gross payroll on training Australian citizen/permanent resident employees

The guidelines for acceptable and non-acceptable training expenditure have been further clarified.

Note: The training obligations will be replaced by the SAF (Skilling Australians Fund) levy, once the legislation has been passed by the government.   Assuming the legislation is passed, the SAF levy will be payable by businesses at the time of lodging a nomination for a TSS visa or permanent employer sponsored visa. The amount of the levy varies depending on the turnover of the business and the period of the TSS visa.

For businesses with turnover of less than $10M, the SAF levy is $1200 per year, and for businesses with a turnover of more than $10M, the levy is $1800 per year.  The levy must be paid by the business – it cannot be recovered from the worker, and there are only limited circumstances in which the levy can be refunded.

Market Salary

The sponsored worker must be paid a salary which is (a) above the TSMIT (currently $53900 per annum) AND (b) consistent with the annual market salary rate for the position. The annual market salary rate (AMSR) is assessed by reference to any applicable industrial instruments, or the salary of an equivalent Australian worker. If there is no equivalent Australian worker the employer must provide a detailed explanation with supporting evidence about how the market salary has been determined.

Work experience

All visa applicants must have completed at least 2 years work experience in the nominated occupation or a closely related field. This will impact recent graduates, who will no longer be able to meet the skills requirements for the visa until they have completed the required work experience.


Applicants for the short term visa must score an overall score of 5.0 on the IELTS test (with a minimum of 4.5 on each component).  Applicants for the long term visa must score 5.0 on each component of the IELTS test.

There are some exemptions available.

How do the changes impact Permanent Residence visas?

Employer sponsored permanent residence visas have been affected by the changes too.

Some applicants will need to have an occupation on the MLTSSL list, while others will need to have worked for their employer in the nominated occupation for at least 3 years on a 457 or TSS visa.   There are additional occupations available for businesses operating in designated regional areas.

The age limit has been reduced from 50 to 45, subject to some limited transitional arrangements and concessions.

There are various concessions on age and employment requirements for workers who held their 457 visa or applied for their 457 visa before 18 April 2017, so it’s important to know when the 457 visa was granted.  These transitional arrangements only apply until 18 March 2022, so applicants should seek advice to check their eligibility as soon as possible.

The SAF levy will also apply to permanent residence visas, once the legislation is passed.  The levy will be a one-off payment of $3000 for businesses with a turnover of less than $10M and $5000 for businesses with a turnover of more than $10M. 

About the Author: Emma is the independent migration consultant to Patterson Houen & Commins Lawyers

Contact the author directly by email or by telephone.

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