457 and employer sponsored permanent visas: What we know and what we don’t

It was a shock to everyone, including the immigration advice industry, who were left in the dark when it was announced that the Subclass 457 – Temporary Work (Skilled) visa (457 visa) will be abolished in March 2018, replaced with a new Temporary Skill Shortage (TSS) visa.

Since the announcement, further information has been provided including a timeline for reforms, some of which are already in effect. What was not mentioned was that these changes will not only affect 457 visas, but also the permanent employer sponsored visas Employer Nomination Scheme (subclass 186) visas and the Regional Sponsored Migration Scheme (subclass 187) visa.

Effective immediately: New occupation lists with caveats, 216 occupations removed, 457 visa grant periods now 2 and 4 years

 The Skilled Occupation List (SOL) and the Consolidated Skilled Occupation Lists (CSOL) have now been replaced with the Medium and Long-term Strategic Skills List (MLTSSL) and the Short-term Skilled Occupation List (STSOL). Importantly, 216 occupations lists have been removed from both lists. Sixteen occupations that were listed on the SOL will remain available for the following visas: the Skilled Independent (subclass 189), the Temporary Graduate (subclass 485) under the Graduate Work stream and the Skilled Regional (Provisional) (subclass 489) under the Eligible Relative Nominated stream.

For any 457 nomination application lodged and awaiting a decision, or for any 457 visa application lodged with an approved nomination awaiting a decision in a removed occupation can now no longer be approved. The Department of Immigration and Border Protection (DIBP) will be notifying applicants in due course to withdraw these applications or otherwise see them refused.

For any applications lodged before 19 April 2017, awaiting a decision for either a 186 visa, Skilled Nominated (subclass 190) visa, Skilled Regional (Provisional) (subclass 489) visa nominated by a State or Territory Government, or a Training (subclass 407) visa, these applications will be unaffected by occupation list changes.

The new occupation list comes with a number of caveats. Some occupations require the nominee to have work experience, some requiring the work to be in a regional area, some place turnover, minimum employee, and minimum salary requirements on the nominating business, and there is a further clarification on restrictions to the hospitality industry.

Maximum visa grant periods, as of today will now be either 2 or 4 years depending on the occupation. For occupations on the MLTSSL, it will be up to four years. For occupations on the STSOL, it will be up to two. This seems to be regardless of whether the business is a start-up or established. This reflects the grant periods that are proposed for the new TSS visa streams.

Reform timelines

The reform timelines have been released for further changes to the 457 visa and permanent employer (186 and 187) visas.

457 visas

1 July 2017

  • Further revision to the occupation lists
  • English language exemption for high salary will be removed
  • Training benchmark policy will be clarified
  • Penal clearance certificates will be required

By 31 December 2017

  • Data matching with the Australian Tax Office records to ensure compliance with nominated salary
  • Publication of sponsors who fail to meet sponsor obligations

March 2018

  • 457 visas will be abolished
  • New Short-term and Medium-term stream TSS visas will be introduced

186 and 187 visas

1 July 2017

  • Further revision to the occupation lists
  • English language requirements will be increased in line with the scores required for a Direct Entry visa
  • A maximum age of 45 will be required for any Direct Entry Stream visa. Although the 50 year age requirement is kept for the Temporary Residence Transition Stream, it is not known whether exemptions will continue to apply

March 2018

  • The MLTSSL will apply
  • The Temporary Skilled Migration Income Threshold (TSMIT) and a minimum market salary rate will be needed. This may be the same requirements as for current 457 nominations
  • Permanent residence eligibility will be extended from two to three years. It is assumed this will apply to the Temporary Residence Transition Stream
  • There will be a requirement of at least 3 years of relevant work experience
  • All applicants must be under the maximum age of 45 at the time of application
  • A strengthened training requirement for employers

The new TSS visas

Further information on the new TSS visas have come to light. These will be divided into two stream: a Medium-Term stream and a Short-Term stream. This is based on whether the occupation nominated is on the MLTSSL or STSOL. For the STSOL, it will have a lower English language requirement, however, these visa holders will only be able to renew this visa once, and there seems to be no pathway to a permanent visa, which is not the case for a TSS Medium-Term stream visa.

The common requirements for either visa will be:

  • At least two years of work experience
  • Labour market testing unless international obligations apply
  • Market salary rates and TSMIT
  • Penal clearances
  • A non-discriminatory workforce test
  • A strengthening of training for nominating businesses

What we do not know

Many questions are still to be answered, particularly regarding permanent employer sponsored visas. While there will be some “grandfathering” of arrangements for current 457 visa holders, it is unclear on what that will be, especially come March 2018. It is also unclear if any Short-Term TSS visa holder will ever be able to transition to a permanent visa.

Secondly, it is not known whether the Direct Entry or Agreement stream will remain or if they will be abolished in March 2018.

It may well be that the MLTSSL expands come March 2018 or State and Territories increase the occupations they deem are in demand for Skilled Nominated (subclass 190) visas. What is clear is there will be some 457 visa holders who will already have been affected.