Migration Strategy: RIP subclass 482 – Temporary Skill Shortage visas (2018-2024)

The government finally revealed its Migration Strategy at the start of the week in response to multiple migration reviews this year. While much has been reported on the changes as if they have already occurred, newly announced reforms are not planned to be implemented until as late as the end of 2024.

There were also longer-term commitments to explore to tailor a fit-for-purpose migration program after consulting with the states and territories, other government departments, stakeholders and the public.

The accompanying Migration Strategy Action Plan sets a timeframe for when these changes will be made. This gives businesses and potential visa applicants fair warning of matters that may affect them. While some reforms may be a hinderance to a person’s migration goal, others may present an opportunity.

The latest political discussion surrounding Australia’s migration system is that net overseas migration (NOM) is too high. NOM accounts for longer-term inflows and outflows of Australia’s population and includes temporary visa holders such as NZ citizens, international students, working holiday makers, and long-term visitors. The international student sector as a whole has been particularly criticised as many education providers are in major cities, and therefore, international students are considered to exacerbate Australia’s recognised housing affordability crisis and shortage.

Skilled migration is one part of a strategy to raise the living standards for the nation, which is primarily done by lifting productivity, an aspect the Reserve Bank of Australia has been concerned about ever since the end of the pandemic.

The government has set out eight elements to improve Australia’s migration program. Many of these are new commitments to build a system for the future, for which medium-term goals will be rolled out throughout next year.

The major aspects and commitments for 2024 and some for beyond are detailed below.

A new Skills in Demand visa replacing the subclass 482 – Temporary Skill Shortage visa

Perhaps the biggest bombshell is the replacement of the 482/TSS visa, a visa that will have existed for a short 7 years, with a new Skills in Demand visa. This new visa will be a 4-year temporary skilled worker visa with three ‘pathways’ or what may end up becoming streams.

Unlike the 482 visa, this visa will provide more mobility for primary visa holders and enable them to switch employers. When a primary visa holder ceases their employment with their sponsor, they will have 120 days before they are considered in breach of their visa condition, instead of the current 60 days as part of visa condition 8607. This cohort will also be able to work during this period, which is currently prohibited until at least a new nomination is approved.

The government will explore a trailing employer fee model for the Skilling Australia Fund Levy, meaning monthly or quarterly fees instead of onerous up-front payment. This appears to be a middle-ground to balance worker mobility and the possibility of a worker leaving soon after an employer sponsors them to work elsewhere by reducing costs. Recouping fees that are in arrears may prove difficult, though.

The work experience requirement for 482 visas and this new visa will be amended, primarily to give Temporary Graduate visa holders the ability to apply for this visa.

There will be three pathways for this Skills in Demand visa: Specialist Skills Pathway, Core Skills Pathway, and Essential Skills Pathway.

Specialist Skills Pathway

This will exclude trade, machinery operator, driver and labourer occupations and the visa applicant will need to earn at least $135,000, the initial threshold which will be indexed annually, and this amount must also be at least what Australian workers in the same occupation are paid.

The salary threshold cannot be inflated by using excessive overtime and monitoring is likely.

Visas are expected to be approved within 7 days.

This visa will probably take over the lion’s share of Global Talent visas, which has suffered from a lack of transparency and long processing times.

Core Skills Pathway

This will operate closest to the current 482 visa, where an occupation must be identified on the Core Skills Occupation List and where their salary must be at least the Core Skills Threshold, which is a rebadge of the Temporary Skilled Migration Income Threshold (TSMIT).

The Core Skills Occupation List will incorporate a newer version of the Australian and New Zealand Standard Classification of Occupations (ANZSCO) and therefore add newer occupations. What occupations will be listed will be assisted by Jobs and Skills Australia acting as the key advisory body.

These visas are expected to be approved within 21 days.

Essential Skills Pathway

This pathway is expected to supplement labour agreements and to be used for lower-paid workers whose salary is expected to be under the Core Skills Threshold. The care industry is likely to be the first industry where this pathway will operate. Work in regional areas may in the future also come under this pathway.

Arrangements will be sector-specific, and capped, with minimum standards, similar to the take-it-or-leave-it approach to the industry template labour agreements.

Labour agreements are not expected to be phased out, however, requirements to access these will be revised.

The future role of the subclass 494 – Skilled Employer Sponsored Regional (Provisional) visa is unclear, however, visa processing for migrants sponsored by employers in regional Australia will be at the top of the skilled visa processing priority list.

Legislated indexing of wage thresholds

The relevant wage thresholds for the Core Skills Pathway and Specialist Skills Pathway will be indexed annually and move in line with the Average Weekly Ordinary Time Earnings, which is a broad assessment of local wage increases.

Unlike the TSMIT, which has been haphazardly and arbitrarily increased or left untouched for many years, the new thresholds will be set in legal stone.

A public register of sponsors with numbers and occupations

This new register should operate similar to the register of labour agreements. It will include the number of sponsored workers and the occupations to make it easier for an existing visa holder to find a sponsor.

It is hoped that this register will be updated in real-time as the labour agreement register is more than a month old at the time of writing.

Revised points test for General Skilled Migration visas

The points system for General Skilled Migration (GSM) visas (subclass 189 - Skilled – Independent visa, subclass 190 - Skilled - Nominated visa, and subclass 491 – Skilled Work Regional (Provisional) visa) will be rejigged to sharpen economic outcomes.

Regional study and community language skills are expected to be removed and the points for age and work experience rebalanced in favour of work experience. A discussion paper and consultation on any changes will take place before any reforms.

New Talent and innovation visa

The Business Innovation and Investment Program (BIIP) have long been criticised for becoming a drain on Australia’s economy by delivering poor outcomes. Over 80 per cent of directors holding subclass 188 - Business Innovation and Investment (Provisional) visas manage retail or hospitality businesses—not the typical sectors associated with increasing productivity and innovation.

Until a new Talent and innovation visa is introduced, which will see the Global Talent and BIIP merge, no further allocations to the BIIP visa will be made.

Increase English language requirements for student visas and Temporary Graduate visas

The current whipping boy of Australia’s visas, the subclass 500 – Student visa, is set to tighten dramatically with the blame placed on non-genuine students and unscrupulous education providers, particularly in the vocational education sector. Increased resources for strengthening compliance with education providers were already announced.

Early in 2024, the English language requirements for student visas will increase for both student visas and subclass 485 – Temporary Graduate visas.

For student visas, the minimum overall band score will vary depending on whether English or foundation courses are being studied before a student’s main course. They will be from 4.5 up to 6 for an IELTS test or equivalent. Subclass 485 visas will increase to 6.5. There is no clarification on whether there will be minimum scores for each skill component.

Education agents may soon be regulated by the Office of the Migration Agents Registration Authority, the body that regulates registered migration agents.

The rumours of a new Genuine Student test (GST) will come to fruition and replace the Genuine Temporary Entrant requirement. The Ministerial Direction on assessing student visas will be replaced. Additional scrutiny will be placed on perennial students, those making further onshore student visa applications, especially in the VET sector, or those applying close to when their Temporary Graduate visas expire. There may be further announcements at the start of 2024 of other measures to prevent non-genuine onshore student visa applications.

A new Ministerial Direction will come into effect by the end of this year, which will prioritise student visa applications based on risk levels such as the education provider.

Temporary Graduate visa durations cut, select qualification extensions axed, maximum age reduced to 35 years

After enabling Temporary Graduate visa extensions for those studying an eligible course, primarily in healthcare, teaching, engineering, ICT, and agriculture, the government will roll back and remove this possibility. Only the regional area study extension will be possible.

The duration of the initial 485 visas will be reduced. For bachelor's and master’s by coursework degrees, visas will be granted for 2 years, and for master’s by research and doctoral degrees, a visa will be granted for 3 years.

Perhaps the most severe change to 485 visas is the age cap. Currently, this is 50 years old, however, due to the cut-off for permanent skilled visas being 45 years old unless an exemption applies, the maximum age of the graduate will be reduced to 35 years of age.

Increased visa compliance and real-time protection visa processing

Sponsorship and visa compliance will receive a boost in many ways. One that will be considered is data-matching with the Australia Tax Office (ATO) now that almost all sponsors would be using Single Touch Payroll, which registers wages paid to the ATO when they are made.

Onshore protection visas will be processed extremely quickly to exhaust the potential for vexatious applicants to buy time.

There are, of course, more aspirational objectives that are subject to consultation and review including visa simplification, which has been a well-worn goal over many years and governments.

While 2024 is only around the corner, it will be a big one for migration reforms.