457 Visa to be Replaced by Temporary Skill Shortage (TSS) Visa

With the introduction of the new changes, all existing Subclass 457 visa holders in Australia will remain unaffected. As for the employers, they will need to be aware of how the changes will impact the un-finalised Subclass 457 visa applications before the introduction of the new Temporary Skill Shortage (TSS) visa in March of 2018.

Apart from that, employers will also require to consider their 457 visa holders' eligibility to qualify for the new TSS visa as well as eligibility for a permanent migration pathway, given these changes affect both temporary and permanent visa pathways. 

Changes:

• All new 457 visas will be granted with either a 2 or 4 years validity period.
  - for a 4 year grant, nominated occupation must be on the Medium and Long-term Strategic Skills List (MLTSSL).
  - for a 2 year grant, nominated occupation will be listed on the Short-term Skills Occupation List (STSOL) instead of the MLTSSL.

Changes:

• The STSOL will be further reviewed based on advice from the Department of Employment. The MLTSSL will be revised based on outcomes from the Department of Education and Training’s 2017-18 Skilled Occupation List (SOL) review.  
  - be prepared for more changes to the occupation lists from these ongoing reviews.

• English language salary exemption threshold which exempts applicants whose salary is over $96,400 from the English language requirement, will be removed.
  - The removal of the English language exemption will be significant particularly for senior executives of foreign companies from non-English speaking countries who need to be based in Australia.

• Policy settings about the training benchmark requirement will be made clearer in legislative instruments.
  - This would provide a more definitive way in which the training benchmarks can be met by established and startup standard business sponsors.

• Provision of penal clearance certificates will become mandatory
  - This requirement will have the potential to further add to the lead time for the lodgement of 457 visa applications.

Changes:

• TFN Collection: Collection of Tax File Numbers for 457 visa holders (and other employer sponsored migrants) by DIBP will commence.
  - The data collected by DIBP will be matched against Australian Tax Office’s records to ensure visa holders are not underpaid.

• ‘Name and Shame’: Publication of details relating to sponsors sanctioned for failing to meet their obligations under the Migration Regulation 1994 and related legislation by DIBP will commence.
  - This measure is intended to enforce greater adherence and compliance by standard business sponsors of the obligations they in respect to their sponsored Subclass 457 visa holders.

Changes:

The Subclass 457 visa abolished and replaced with a new TSS visa with specified Short and Medium term streams. 

• Short-Term Stream
  - The Short-Term stream is designed for Australian businesses to fill skill gaps with foreign workers on a temporary basis, where a suitably skilled Australian worker cannot be sourced. 
  - One onshore renewal.
  - Using the STSOL (with additional occupations specified for regional Australia) for the occupation list.
  - Requires at least 2 years of relevant working experience.
  - English requirement of IELTS 5 (or equivalent test) with minimum of 4.5 in each test component.

• Medium-Term Stream
  - The Medium-Term stream will allow employers to source foreign workers to address shortages in a narrower range of high skill and critical need occupations, where a suitably skilled Australian worker cannot be sourced.
  - Renewal onshore or PR pathway after 3 years.
  - Using the MLTSSL (with additional occupations specified for regional Australia) for the occupation list. 
  - Requires at least 2 years of relevant working experience.
  - English requirement of IELTS 5 (or equivalent test) with minimum of 5 in each test component.