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Note: This content is based on information from the Department of Home Affairs as at 21 February 2018, some of which is dependent on the passage of legislation by Parliament, therefore may be subject to change.
The much-anticipated new Temporary Skills Shortage (subclass 482) visa (TSS) will commence in early March 2018, replacing the Subclass 457 visa program and introducing a training levy for employer sponsored visas. Reforms to the permanent employer sponsored visa programs will also take place at that time to tighten the eligibility requirements. So, what do we know so far about these reforms?
Sometime in early March, however this is subject to the passage of the amending legislation. There are also several Bills currently pending before Parliament to facilitate the new Skilling Australians Fund (SAF), tighten the current labour market testing provisions, and allow for the publication of sanctioned sponsors. As the SAF Bills failed to pass during the sitting of both Houses of Parliament in February, the earliest that these Bills could be passed is the week commencing 26 March 2018 when both Houses are sitting.
Despite this, the Department of Home Affairs (the Department) has been clear in its communications to-date that the TSS visa and permanent employer sponsored visa reforms will be implemented sometime in ‘early March’ (although we know that it will not be 1 March 2018). This means that these reforms may initially be implemented without the SAF levy, a key initiative of the reforms.  Should this happen, we expect that the existing training benchmark provisions would be applied to the TSS visa and permanent Employer Nomination Scheme (ENS) and Regional Sponsored Migration Scheme (RSMS) visas until which time that the SAF levy can be implemented.
Two Bills to facilitate the new Skilling Australians Fund (SAF) and amend the current labour market testing (LMT) provisions were introduced into Parliament in October 2017 and are currently in the Senate.  The Senate has approved proposals to amend the LMT requirements (discussed further below), however additional aspects of the Bills are yet to be debated.
What we do know is that the SAF levy:
  • Will be payable at the time of the TSS (or ENS/RSMS) nomination. TSS nominations (and visas) will only be in 12-month blocks meaning that unlike the 457 visa, it will not be possible to obtain a 6 month or 18-month TSS visa.
  • In the case of TSS nominations, will be payable per year or part thereof and cannot be recovered from the visa holder. It is unclear at this stage as to whether a similar prohibition will apply to permanent ENS/RSMS visa applicants, however we think it is likely to be treated in the same way;
  • Will not be subject to any exemptions although refunds may be available in limited circumstances (for example where the visa is refused on health or character grounds);
  • Will not be refunded where the visa holder ceases employment or completes their assignment before the end of their TSS visa;
  • Will still be payable in cases where a TSS or 457 visa holder is lodging a new nomination to change employers. In this case, the new sponsoring employer will be required to pay the SAF levy for any period remaining on the person’s visa;
  • Will be tax deductible.
Businesses with turnover of less than A$10 million per year will be required to make an upfront payment of A$1,200 per visa per year (or part thereof) for each employee on a TSS visa and make a one-off payment of A$3,000 for each employee being sponsored for a permanent ENS or RSMS visa.
Businesses with turnover of A$10 million or more per year will be required to make an upfront payment of A$1,800 per visa per year (or part thereof) for each employee on a TSS and make a one-off payment of A$5,000 for each employee being sponsored for an ENS or RSMS visa.
The training benchmarks will not be applied once the SAF levy has been implemented. However, compliance with training benchmarks will still need to be met up until the date the SAF levy is implemented for:
  • Standard business sponsorship applications where the business has previously held sponsorship status (unless the Department is satisfied that it is reasonable to disregard any non-compliance);
  • Monitoring of compliance with training sponsorship obligation; and
  • ENS Temporary Residence Transition stream nominations (again, unless the Department is satisfied that it is reasonable to disregard any non-compliance).
Tougher labour marketing testing requirements will be a feature of the TSS such that unless an international trade agreement applies to the nominated position, the Department must be satisfied that there is no suitably qualified and experienced Australian citizen or permanent resident who can undertake the position. The Senate has approved amendments to one of the SAF Bills to specify that this LMT will need to have been undertaken for at least 28 days in the 4 months immediately prior to lodging the nomination application, however this amendment will also need to be approved by the House of Representatives.
Importantly, additional criteria will need be prescribed by the Minister in legislative instruments including what will be accepted as appropriate evidence of LMT.
What we do know is that evidence of appropriate LMT will:
  • Need to be in English and include particular details such as position title and description, salary and employer name (or the name of the recruiter if an agency is used);
  • Appear via a channel that has sufficient coverage (for example: national recruitment website such as, national print media/radio) but it is not expected that this will include a general classifieds website; and
  • Post-date any redundancies in the same ANZSCO occupation as the nominated position.
The second reading consideration debate of the SAF Bill suggests that broader evidence, such as internal advertising, may be accepted for intra-corporate transfers whilst accredited sponsors may be able to include advertisements on their business website or social media. We will need to wait until the legislative instruments have been registered to confirm this.
We also know that whilst the only legislative exceptions to LMT will be where an international trade obligation applies, the Department has advised that it will continue to take a flexible position under policy for particular scenarios including where a new nomination is lodged due to a change in corporate structure, the individual is a high income earner and for ‘talent based positions’ such as top-talent chefs, athletes, eminent academics and researchers.
The Department is introducing further initiatives to benefit low risk, accredited sponsors. Firstly, a simplified business sponsorship renewal form will be introduced to coincide with the TSS implementation. This will allow for the ‘auto-grant’ of low risk sponsorship renewal applications. Secondly, in some cases, TSS nominations by accredited sponsors will also be subject to automatic approval. The Department will also be revising the accredited sponsorship criteria to expand these arrangements to a wider cohort of sponsors.
At the same time as facilitating low-risk applications, the Department is introducing several measures to enhance the integrity of the temporary work visa program. This includes:
  • Increased information sharing with the Fair Work Commission and the Australian Tax Office to monitor for incidents such as underpayment of TSS visa holders;
  • Publication on the Department’s website of sponsors who have been sanctioned for compliance breaches; and
  • Longer processing times for sponsors who are flagged in the Department’s systems as having a history of non-compliance or other integrity concerns.
Each January and July, the Department of Jobs and Small Business (DJSB) will conduct a review of the STSOL and MLTSSL to determine whether any occupations:
  • should be added to the lists;
  • should be removed from the lists; or
  • should be moved from one list to another.
The review will examine whether there is a shortage in the occupation and whether current and anticipated demand for the occupation can be met within the Australian labour market. Following a round of public consultation the DJSB will then make recommendations to the Minister for Immigration and Border Protection who has final say on amendments to the lists.
It is expected that the list changes will not affect any TSS applications already lodged and still being processed by the Department.
Applicants applying for further TSS visas under the TSS ‘Short Term’ stream will be subject to an onshore renewal restriction in the form of the ‘Genuine Temporary Entrant’ (GTE) criteria. The Department has clarified that the effect of this will be that TSS applications in the Short-Term stream will need to be lodged from outside of Australia where:
  • The visa holder has held more than one Short-Term stream TSS visa;
  • The visa holder was in Australia at the time of application for their most recent TSS visa; and
  • This requirement would not be inconsistent with any international trade obligation.
Such applications will be carefully considered against the GTE criteria to ensure that the visa applicant has a legitimate intention to remain in Australia only on a temporary basis.
The Department has also clarified that this renewal restriction will only apply with respect to TSS visas such that any 457 visas previously held will not be relevant.
The subclass 482 TSS visa will be subject to new condition 8607. This condition will be similar in effect to the condition 8107 which applies to 457 visa holders, however it will require TSS visa holders who wish to change occupations to lodge both a new nomination and TSS visa application. This differs to the current arrangement for 457 visa holders who only need to lodge a new nomination when changing occupations.
Like 457 visas, all TSS visas (including dependent visas) will be subject to condition 8501 which requires the visa holder to maintain adequate arrangements for health insurance.
What you need to know about transition to the TSS visa framework
The Department has advised that it expects that the amending regulations will allow for the following arrangements to support the transition from the 457 visa to the TSS visa framework:
  • Business sponsorship applications lodged prior to the reforms will be assessed based on the rules as at time of lodgement, that is, under the current framework.
  • Business sponsorship applications approved prior to the reforms will remain valid and can be used for the lodgement of TSS nominations.
  • 457 Nomination and visa applications lodged prior to the reforms will be assessed based on the rules as at time of lodgement.
  • 457 Nomination only applications in respect of an existing 457 holder lodged prior to the reforms will be assessed based on the rules as at time of lodgement.
  • 457 Nomination applications without a linked visa application or an existing 457 visa will be redundant as they cannot be used to lodge a TSS application.
Under the ENS/RSMS reforms, 457 visa holders who held or who had applied for a 457 visa on or before 18 April 2017 will be able to meet certain existing provisions under the Temporary Residence Transition (TRT) stream of the ENS and RSMS:
  • The occupation requirements remain the same - i.e. there are no restrictions provided the nominee continues to work in the same position for the same employer as approved for their subclass 457 visa. Specifically, this cohort of applicants will not need to have an occupation on the MLTSSL;
  • the age requirement will remain at less than 50 years of age; and
  • the skill experience requirement, and the requirement to have worked at least two out of the three years on a 457 visa prior to nomination lodgement, will remain at two years.
Applicants who fall within these transitional arrangements will still need to meet other ENS/RSMS eligibility criteria including ensuring that the nominated salary meets market rate and the Temporary Skilled Migration Income Threshold (TSMIT) which is currently set at A$53,900, and pay the new SAF levy once this is implemented. At this stage, we do not know how long these transitional arrangements will remain in place as this will be subject to the final legislation.
Age exemptions currently apply to the TRT stream applicants who have worked for their nominating employer on their 457 visa for at least 4 years and in each year, have earned above the Fair Work High-Income Threshold (set at A$142,000 for the 2017-18 financial year). The Department has now confirmed that this age exemption will continue to be available under the new permanent employer sponsored visa framework including under the transitional arrangements for applicants aged 50 and over applying after March 2018.
Existing skill and Age exemptions will also be retained under both the TRT and Direct entry streams for ENS and RSMS.
Fragomen will continue to monitor and report on further updates as they are released by the Department. A series of webinars and briefing sessions will also be held following the release of regulations. For any questions regarding the TSS visa implementation, please contact your usual Fragomen contact or