Breaking news: 457 visa to be abolished – reforms to employer sponsored skilled migration programme

On 18 April 2017 Prime Minister Malcolm Turnbull announced that the 457 visa will be abolished and replaced with a new Temporary Skill Shortage (TSS) visa to better address genuine skill shortages and protect the Australian local labour force. The implementation of these reforms will begin immediately and will be completed in March 2018.

Minister for Immigration and Border Protection, Peter Dutton stated the ‘457 visa arrangements will be "grandfathered".

As part of the Government’s significant reform package to strengthen the integrity and quality of Australia’s temporary and permanent employer sponsored skilled migration programmes, the TSS visa will be comprised of a Short-Term stream of up to two years and a Medium-Term stream of up to four years.

Proposed fees are $1,150 for the short-term visa and $2,400 for the medium-term visa (which is an increase on the current 457 visa fees).

Key reforms, as confirmed by the Department of Immigration and Border Protection (DIBP) include:

Temporary Skill Shortage (TSS) (which replaces the existing 457 visa)

Introducing the TSS visa with added requirements, including but not limited to:

• targeted occupation lists which better align with skill needs in the Australian labour market
• a requirement for visa applicants to have at least two years’ work experience in their skilled occupation
• a minimum market salary rate which ensures that overseas workers cannot be engaged to undercut Australian workers
• mandatory labour market testing unless an international obligation applies
• capacity for only one onshore visa renewal under the short-term stream
• capacity for visa renewal onshore and a permanent residence pathway after three years under the medium-term stream
• a non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workers
• strengthened requirement for employers to contribute to training Australian workers
• DIBP will collect Tax File Numbers and data will be matched with the Australian Tax Office’s records
• mandatory penal clearance certificates to be provided

Employer sponsored permanent skilled visas (including regional stream)

Tightening eligibility requirements for employer sponsored permanent skilled visas, including but not limited to:

• the permanent residence eligibility period will be extended from two to three years
• stronger English language requirements
• a requirement for visa applicants to have at least three years’ work experience
• applicants must be under the maximum age requirement of 45 at the time of application
• strengthened requirement for employers to contribute to training Australian workers
• employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold (set at $53,900 as at 12 April 2016)

Concessions for regional Australia will continue to be available:

• employers in regional Australia will continue to have access to occupations under the temporary and permanent visas to reflect their skills needs
• existing permanent visa concessions for regional Australia, such as waiving the nomination fee and providing age exemptions for certain occupations will be retained; consideration will be given to expanding the occupations in regional Australia that are exempt from the age requirement

Reducing lists of occupations for skilled migration visas and the 457 visa from 19 April 2017

From 19 April 2017, the list of occupations will be significantly condensed for skilled migration visas, including the subclass 457 visa.

Further information

For a summary of the additional changes and implications for employers click here.