AUSTRALIA – Subclass 457 Visa to be Abolished

On 18 April 2017, the Australian government announced that the Subclass 457 visa program will be abolished and replaced with a new Temporary Skill Shortage (TSS) visa. The implementation of these reforms began on 19 April 2017 and is expected to be completed in March 2018.

Changes to the permanent residence visa programs (186/187) and to citizenship requirements have also been announced, and we will provide details of these in a separate alert.

Who is Affected?

  • The reforms affect newly lodged and pending 457 nomination and visa applications.
  • Those currently on a 457 visa will continue under the conditions of that visa.
  • 457 visas granted on or after 19 April 2017 may be subject to a two-year validity period.
  • Those with pending 457 visa applications lodged on or before 18 April 2017, and whose application have not yet been decided, with an occupation that has been removed from the STSOL, should check with an immigration adviser whether they may be eligible for a refund of their visa application fee. Nominating businesses for these applications may also be eligible for a refund of related fees.

New TSS Visas

The new visa system will have stricter requirements including at least two years of previous work experience, mandatory labor market testing, police clearance certificates, and a greater onus on employers to fill jobs locally first.

There will be a short-term two-year visa stream with a greatly reduced list of occupations. The short-term visa will not be a path to permanent residency. There is however, capacity for one onshore visa renewal under this Short-Term stream.

There will also be a Medium-Term stream which will allow a four-year stay for higher skilled, strategic jobs. This Medium-Term stream will have significantly tighter restrictions and an even narrower occupations list. There will be capacity for visa renewal onshore and a permanent residence pathway after three years. The permanent residence eligibility period will be extended from two to three years.

The new temporary scheme will strengthen a non-discriminatory workforce test to ensure that employers are not actively discriminating against Australian workers. It will also strengthen the requirement for employers to contribute to training Australian workers. Under the new scheme, DIBP will collect Tax File Numbers and data will be matched with the Australian Tax Office’s records.

Timeline of Changes

From 19 April 2017

  • The Skilled Occupation List (SOL) has been renamed the Medium and Long Term Strategic Skills List (MLTSSL). Occupations on the MLTSSL will continue to be issued for a maximum duration of four years. 16 occupations have been removed from the MLTSSL for the 457-visa program.
  • The Consolidated Sponsored Occupation List (CSOL) has been renamed the Short Term Skilled Occupation List (STSOL). The maximum duration of 457 visas issued for occupations on this list is now two years. The government has removed 216 occupations from the CSOL in creating the STSOL. In addition, 24 occupations listed on the STSOL will now only be eligible for positions located in regional Australia. Access to 59 other occupations has been restricted.

From 01 July 2017

  • The English language salary exemption threshold, which exempts applicants whose salary is over $96,400 from the English language requirement, will be removed.
    Training benchmarks to be changed.
  • Police clearance certificates will become mandatory.

Before 31 December 2017

  • The Department of Immigration and Border Protection (DIBP) will commence the collection of Tax File Numbers for 457 visa holders (and other employer-sponsored migrants), and data will be matched with the Australian Tax Office’s records to ensure that visa holders are not paid less than their reported salary.
  • DIBP will commence with the publication of details relating to sponsors sanctioned for failing to meet their obligations under the Migration Regulation 1994 and related legislation.

From March 2018

  • 457 visa program to be abolished and replaced with new TSS visa.
    Action Items

Employers sponsoring pending and upcoming applications for 457 visas to Australia should consult with their immigration adviser at McCown & Evans LLPfor the latest information about these reforms.