Visa & Immigration Update | 457 Visa in Australia

Prime Minister Malcolm Turnbull announced that the subclass 457 visa will be abolished and replaced by a new visa – the Temporary Skill Shortage (TSS) visa.

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. It is intended to support businesses in addressing genuine skill shortages in their workforce and will contain a number of safeguards which prioritise Australian workers. The Short-Term stream is designed for Australian businesses to fill skill gaps with foreign workers on a temporary basis, where a suitably skilled Australian worker cannot be sourced.

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.

Implementation of these reforms will begin immediately and are expected to be completed by March 2018.

Key reforms to the existing 457 include:

From 19 April 2017

Significantly condensing the occupation lists used for skilled migration visas, including the subclass 457 visa:

• The Consolidated Sponsored Occupation List (CSOL) which is used for the 457 visa programme is being replaced by the Short Term Skilled Occupation List (STSOL)
• 200 occupations have been removed from the CSOL in creating the STSOL
• The STSOL will be updated every 6 months based on advice from the Department of Employment
• The maximum validity period for 457 visas issued from this date for occupations that are on the STSOL will be 2 years. For occupations on the MLTSSL, 457 visas will continue to be issued for a maximum of 4 years
• These removed occupations will affect the Employer Nomination Scheme (subclass 186), the Temporary Work (Skilled) (subclass 457), the Skilled Nominated (subclass 190), the State and Territory Nominated stream of the subclass 489 and some applicants for the Training visa (subclass 407)

From 1 July 2017

• Occupation lists: The STSOL and MLTSSL will be further reviewed based on advice from the Department of Employment and Department of Education and Training
• English language requirements: The English language salary exemption threshold, which exempts applicants whose salary is over $96,400 from the English language requirement, will be removed
• Training benchmarks: Policy settings about the training benchmark requirement will be made clearer in legislative instruments
• Character: Penal clearance certificates will need to be provided

By December 2017

• The Department of Immigration and Border Protection (DIBP) 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 not paid less than their nominated salary
• DIBP will commence the publication of details relating to sponsors sanctioned for failing to meet their obligation

From March 2018

• The 457 visa will be abolished and replaced with the TSS visa
• The Short-Term stream will include the following criteria:
• Renewal: Capacity for one visa renewal onshore only
• For non-regional Australia, occupations on the STSOL will apply
• For regional Australia, occupations on the STSOL will apply, with additional occupations available to support regional employers
• English language requirements: An International English Language Testing System (IELTS) (or equivalent test) score of 5, with a minimum of 4.5 in each test component will be required
• Genuine temporary entrant requirement
• The Medium-Term stream will include the following criteria:
• Renewal: Capacity for visa renewal onshore and a permanent residence pathway after three years
• For non-regional Australia, occupations on the MLTSSL will apply
• For regional Australia, occupations on the MLTSSL will apply, with additional occupations available to support regional employers
• English language requirements: A minimum score of IELTS 5 (or equivalent test) in each test component will be required
• Eligibility criteria for both streams will include:
• Work experience: At least two years relevant work experience
• Labour market testing (LMT): LMT 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: Penal clearance certificates will need to be provided
• Workforce: 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

Who is affected?

We expect further details and clarifications to be announced by the Government over the coming weeks including in the Federal Budget.

Individuals with pending 457 applications whose nominated occupation has been removed 

If your nomination application is still pending and your occupation has been removed, please contact SIRVA for advice regarding your potential options as these nominations can no longer be approved by DIBP

Current 457 visa holders

Existing 457 visas will continue to remain in effect. However, if your 457 visa is approaching its expiry date, you will need to seek advice regarding if you are still eligible to apply for a new 457 or other visa

More information will be issued regarding changes to the Permanent Employer Sponsored Skilled Migration Programme.

However, individuals who are considering applying for Permanent Residence under the Employer Nomination Scheme and are aged between 45 and 50 should consider applying as soon as possible (if eligible) while they can satisfy the criteria as there will be changes to the age requirement.