On 18 April 2017, the Government announced that the Temporary Work (Skilled) visa (subclass 457) will be replaced with the completely new Temporary Skill Shortage (TSS) visa by March 2018.

Current 457 Visa Holders

The Government has confirmed that there will be a grandfathering arrangement to ensure that all current 457 visa holders will continue under the conditions of their current visa.

What has already changed?

Occupation Lists

The lists which specify the occupations that are eligible for the 457 programme have been changed significantly. As of 19 April 2017, these lists will replace the former Skilled Occupation and Consolidated Skilled Occupation lists. The new occupation lists now in place are:

  • The Medium and Long-term Strategic Skills List (MLTSSL); and
  • The Short-term Skilled Occupation List (STSOL)

These lists have removed over 200 previously eligible occupations for 457 visa purposes and introduce caveats to 59 other occupations. These caveats, which have been attached to selected occupations on the list, will mean that the applicant and sponsor will be required to satisfy additional requirements in order to be eligible for the 457 visa.

Effect of this change

This means that applications lodged prior to 19 April 2017, which have not yet been finalised, for occupations that are now no longer approved for the purpose of the programme must be withdrawn. The Department of Immigration has indicated that it will refund all costs in relation to these applications.

Visa Validity Period

As of 19 April 2017, the visa period available to applicants will be determined by the nominated occupation.

This means that 457 visas granted on or after 19 April:

  • will be granted for a period of four years to primary applicants whose occupation falls on the MLTSSL
  • will be granted for a maximum period of two years to primary applicants whose nominated occupation falls on the STSOL

Note: Subsequent entrants (i.e. family members applying as secondary visa applicants) who wish to be added to a primary subclass 457 visa will not be impacted by this new policy. That is, subsequent entrants can still have their 457 visa ‘match’ the visa period of the primary visa holder's current 457 visa.

Looking Ahead

From 1 July 2017, the following changes have been announced for the 457 visa:

  • Occupation lists: 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 SOL review.
  • English language requirements: The current English language salary exemption threshold of $96,400, will be removed.
  • Training benchmarks: Policy settings about the training benchmark requirement will be made clearer in legislative instruments.
  • Character: Provision of penal clearance certificates will become mandatory.

Before 31 December 2017, the following changes are expected for the existing 457 visa:

  • The Department of Immigration and Border Protection (the 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 nominated salary.
  • The Department will commence 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, the 457 visa will be abolished and replaced with the TSS visa. The TSS visa will be comprised of a Short-Term stream of up to two years, and a Medium-Term stream of up to four years.

Current reports are that the Short-Term stream will cost USD 1150 and will include the following criteria:

  • Renewal: Capacity for visa renewal onshore once only
  • Occupation List: For non-regional Australia, the STSOL will apply and for regional Australia, the STSOL will apply, with additional occupations available to support regional employers.
  • English language requirements: A requirement of an International English Language Testing System (IELTS) (or equivalent test) score of 5, with a minimum of 4.5 in each test component.
  • Genuine entry: A genuine temporary entrant requirement.

Indicative application costs for the Medium-Term stream are USD 2400 and will include the following criteria:

  • Renewal: Capacity for visa renewal onshore and a permanent residence pathway after three years.
  • Occupation List: For non-regional Australia - the MLTSSL will apply. For regional Australia - the MLTSSL will apply, with additional occupations available to support regional employers.
  • English language requirements: A requirement of a minimum of IELTS 5 (or equivalent test) in each test component.

Eligibility criteria for both streams will include:

  • Work experience: At least two years’ relevant work experience.
  • Labour market testing (LMT): LMT will be mandatory, unless an international obligation applies.
  • Character: Mandatory penal clearance certificates to be provided.
  • Workforce: A non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workers.
  • Training requirement: a strengthened training requirement for employers to contribute towards training Australian workers.

Changes to the Employer Nomination & Regional Sponsored Migration Schemes

What has already changed?

The reforms will affect the following visas under the permanent employer sponsored skilled migration programme:

  • Employer Nomination Scheme (subclass 186) visa (ENS visa)
  • Regional Sponsored Migration Scheme visa (subclass 187) visa (RSMS visa)

Applicants who have lodged an application prior to 19 April and are awaiting an outcome appear to be unaffected by the changes at this stage. However, new applicants will need to adhere to the new and condensed occupation lists outlined above.

Prospective applicants whose occupations no longer fall within the new occupation list will not be eligible for permanent residency under the employer nomination scheme.

Looking Ahead

From 1 July 2017, for permanent employer sponsored skilled visa programmes the following changes are expected:

  • Occupations lists: Further reviews and possible changes will be implemented to the new occupation lists.
  • English language requirements: Applicants will be required to score a higher score in the IELTS exam (or equivalent) in order to satisfy the English requirement.
  • Age: A maximum age requirement of 45 at the time of application will apply to Direct Entry stream applicants. A maximum age requirement of 50 at the time of application will continue to apply to Temporary Residence Transition stream applicants.
  • Training requirement: a strengthened training requirement for employers to contribute towards training Australian workers.