On 18 March 2015, the Australian Government announced it would support most of the recommendations in the Independent Review Report Robust New Foundations - A Streamlined, Transparent and Responsive System for the 457 Programme. The recommendations are designed to strengthen the integrity of the Subclass 457 visa program while being responsive to the needs of the business community.

The supported recommendations will affect sponsorship conditions and obligations, as well as 457 eligibility criteria. Sponsors will have greater flexibility in meeting sponsorship obligations and 457 visa requirements.

What are the changes?

The government has supported the following recommended changes to the 457 visa scheme: 

Sponsorship changes

  • Training Benchmarks A and B are to be replaced with an annual training fund contribution based on the size of the business and the number of 457 visa holders sponsored. Contributions will be made to the Department of Industry. The government will undertake further consultation on how this will be implemented.
  • A new sponsorship obligation will be introduced preventing the cost to the sponsor of the training contribution from being passed on to a 457 visa holder or third party.
  • It will be made unlawful for a sponsor to be paid by a visa holder to be sponsored. A strong penalty and conviction will be applied.
  • Business sponsorship approval periods will be extended from 3 to 5 years, and from 12 to 18 months for start-up businesses. These new approval periods will apply to renewed or new applications for sponsorship. Current approvals will not be extended to these time frames.

457 changes

  • The Temporary Skilled Migration Income Threshold (TSMIT) will be retained at $53,900 pa and will not increase until it is reviewed within two years. Consideration will be given to accepting applicant salaries up to 10% lower than TSMIT.
  • Labour market testing will not be abolished, however, the Department of Immigration and Border Protection (DIBP) will examine ways to reduce the burden to employers and red tape in this process.
  • Sponsors will be required to include as part of the signed employment contract: a) a summary of visa holder rights prepared by the DIBP; and b) the Fair Work Ombudsman’s Fair Work Information Statement.
  • The English language threshold will be changed to an IELTS average of 5 overall rather than 5 in each band. Alternate English language test providers are likely to be announced next month.
  • The exemption for demonstrating English language competency will change from 5 years' continuous study in English to 5 years' cumulative study.
  • Visa charges are being reviewed as part of the Joint Review of Border Fees, Charges and Taxes.

How does this impact sponsors?

The government has indicated it intends to implement the supported recommendations within the next 6 months. Once this occurs, sponsors should review and update their internal policies and employment contracts to reflect supported recommendations.

The replacement of Training Benchmarks A and B with an annual training fund contribution will impact sponsors with large-scale operations and a sizeable 457 visa population. While this has been simplified, contribution of funds will be based on the size of the business and number of 457 visa holders sponsored. Sponsors will no longer be able to count existing training expenditure as a means to meet training requirements. The government's support for this recommendation is subject to further consultation.

The government's full response to the recommended changes can be accessed here