The Impact of Australian Migration System Reforms and COVID-19 Visa Concessions for Corporations and Individuals

The announcement that Australia is embarking on a once-in-a-generation reform to the country’s migration system has sparked significant interest and discussion within the migration industry and throughout corporate Australia and migrant communities.

Following the announcement by the Minister for Home Affairs, The Honourable Claire O’Neil MP in April 2023, the Government released its draft migration strategy and has committed to creating a more targeted and simpler migration system that serves migrants but also enhances Australia’s economic prosperity and security.

However, reforms of this scale will take time, and, prior to the rollout of major legislative changes, there will inevitably be a raft of additional announcements by the Government, with the introduction of some interim measures to assist visa holders who may not yet have a pathway to a longer-term or permanent visa.

These announcements and interim measures, coupled with COVID-19 pandemic concessions, can be overwhelming and confusing. The summary below serves as a guide to navigating these changes.

Changes to come into effect in 2023 

Change: Labour Market Testing exemption for UK citizens and permanent residents

From 31 May 2023, Australian sponsor employers of UK citizens and permanent residents applying for the Temporary Skill Shortage (TSS) subclass 482 visa will no longer be required to meet prescribed Labour Market Testing (LMT) requirements.

As of the writing of this article, there have been administrative delays with the Government incorporating the amendment into the relevant LMT legislative instrument. However, Fragomen has received confirmation from the Department of Home Affairs that the LMT exemption is in effect and can be used by employers. 

Change: The Temporary Skilled Migration Income Threshold will increase from $53,900 to $70,000 for employer-sponsored visa programs

This change will not impact existing visa holders or nominations lodged before 1 July 2023.

New visa applicants or visa holders who require a renewal of their temporary employer-sponsored work visa from 1 July 2023 will need to meet the new TSMIT.

Employers should also look at the Annual Market Salary Rate (AMSR) range which applies to the nominated role. As such, if the lower range of the AMSR falls below $70,000, this could be flagged as an issue during processing.

Positions that attract a salary around the $70,000 mark should be monitored in case the TSMIT is increased on an annual basis.

Change: Increase to upper age limit from 30 to 35 for UK citizens under the Working Holiday Subclass 417 visa program

From 1 July 2023, the upper age limit will increase to 35 years. UK passport holders can lodge an application for a Working Holiday visa until midnight (AEST) on the day before their 36^thbirthday.

It is only from 1 July 2024 that UK passport holders will be able to apply for second and third Working Holiday visas without having to complete ‘specified work’.

Change: Direct pathway to Australian citizenship for New Zealand citizens

From 1 July 2023, New Zealand citizens will no longer need to apply for and be granted a permanent visa before becoming eligible for Australian citizenship.

These changes apply to New Zealand citizens holding a Special Category Subclass 444 visa (SCV) who arrive in Australia after 26 February 2001.

All New Zealand citizens holding an SCV will be considered permanent residents for citizenship purposes. New Zealand citizens granted an SCV before 1 July 2022 will have their period of permanent residence for citizenship purposes backdated to 1 July 2022. New Zealand citizens granted an initial SCV on or after 1 July 2022 will be considered a permanent resident for citizenship purposes from the date of SCV grant.

Change: Extension of visa duration for Temporary Graduate (Post-Study Work Stream) subclass 485 visa

From 1 July 2023, the period of stay for the Temporary Graduate visa in the Post-Study Work stream for eligible graduates of listed qualifications will increase as follows:

• 4 years for Bachelor degree graduates (up from 2 years)
• 5 years for Master degree graduates (up from 3 years
• 6 years for doctoral graduates (up from 4 years)

The extension is in addition to the existing 1-2 years of work rights for eligible students who study, live and work in regional areas.

Individuals who hold a Temporary Graduate visa in the Post-Study Work stream that expires before 1 July 2023 and do not hold an eligible qualification may be eligible to apply for a 2-year Australian Government Endorsed Events (COVID-19 Pandemic) subclass 408 visa.

Change: Pathway to permanent residency for short-term TSS visa holders

By the end of 2023, short-term TSS visa holders will gain access to permanent residency under the Employer Nomination Scheme subclass 186 visa (ENS) Temporary Residence Transition (TRT) stream.

TSS visa holders will need to demonstrate that they have worked in the nominated occupation on their TSS visa for a period of 2 years with the sponsoring employer (reduced from 3 years). All other nomination and visa requirements under the TRT stream of the ENS visa program must also be met.

Change: Visa application charges

From 1 July 2023, the Visa Application Charges (VAC) for most visas will be increased in line with the 2023-24 forecast Consumer Price Index (CPI) of 3.25%.

Select visitor and temporary visas, including Temporary Activity and Temporary Work (Short Stay Specialist) visas will be increased by further 21% in addition to CPI. Business Innovation and Investment visas will be increased by a further 46% in addition to CPI. Remaining visas will be increased by 6% in addition to CPI. It is intended that these indexation amendments will continue to be made on an annual basis.

Change: Superannuation Guarantee rate

On 1 July 2023, the Superannuation Guarantee percentage rate will increase from 10.5% to 11% and thereafter will annually increase in increments of 0.5% for the next 2 financial years up to 12%.

Employers are reminded that Guaranteed Annual Earnings (GAE) for employees sponsored under the TSS subclass 482 and Skilled Employer Sponsored Regional subclass 494 visa programs must not drop below the GAE as specified in the approved nomination. Importantly, GAE does not include mandatory superannuation contributions.

Change: Medical examinations

From 1 July 2023, urine tests will no longer form part of the medical examination. Instead, visa applicants will require a blood test to be taken.

Applicants aged 15 years or older, who have not completed their medical examinations prior to 1 July 2023, will be required to undertake a blood test.

The change will be implemented to assist panel physicians with the screening for chronic kidney disease. The blood test replaces a less accurate urine test.

COVID-19 Concessions: Coming to an end

View concessions below and which rules apply from 1 July 2023 for each.

1. Working Holiday Makers can work for any employer for the duration of their visa without making a written request up until 30 June 2023. The standard 6-month work limitation rule will apply to all Working Holiday Makers. However, Working Holiday Makers will be permitted to work for any employer for up to an additional 6 months, even if they worked for that same employer prior to 1 July 2023.

2. Work hours limitation removed for Student Visa holders until 30 June 2023. The work hours limitation will be re-instated for Student Visa holders. However, the Government will increase the allowable work rights cap from 40 hours per fortnight to 48 hours per fortnight. An exception remains in place for students already working in the Aged Care sector on 9 May 2023. This cohort will continue to enjoy unrestricted work rights until 31 December 2023.

3. Temporary Graduate subclass 485 (Graduate Work stream) visa holders not required to nominate an occupation on the Medium/Long-term Strategic Skills List (MLTSSL) and not required to obtain a positive skills assessment outcome. Temporary Graduate subclass 485 (Graduate Work stream) visa holders will be required to nominate an occupation on the MLTSSL and obtain a positive skills assessment outcome.

4. Ability to apply for third Temporary Skill Shortage (TSS) subclass 482 visa under short-term stream while in Australia. The ability to apply for a third TSS visa in the short-term stream while in Australia will come to an end on 30 June 2023. We are waiting on the Government to confirm whether this concession will be extended beyond 30 June 2023. Although the Government has confirmed that it will introduce interim measures to remove the limitation on the number of onshore TSS visas under the short-term stream that can be applied for, this provision has not yet been implemented through a change in legislation.

Need to know more?

For further information and advice on upcoming changes to the Australian migration system, please contact your Fragomen immigration professional.

This blog was published on 23 June 2023, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please visit our dedicated COVID-19 site, subscribe to our alerts and follow us on LinkedIn, Twitter, Facebook and Instagram.