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AUSTRALIA – Subclass 457 Visa to be Abolished [UPDATED]

On 18 April 2017, the Australian government announced that the Temporary Work (Skilled) visa (subclass 457) 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 programmes (186/187) have also been announced - see our 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 subjected to a two-year validity period.
  • Those with pending 457 visa applications lodged on or before 18 April 2017, and whose application has 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 labour market testing and police clearance ccertificates 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, and this 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 with 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 employers are not actively discriminating against Australian workers, it will strengthen the requirement for employers to contribute to training Australian workers and 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 Consolidated Sponsored Occupation List (CSOL) has been renamed the Short Term Skilled Occupation List (STSOL). Occupations, and the maximum duration of 457 visas issued for occupations on this list is now two years. There has been a removal of 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.
  • 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 programme.

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 nominated salary.
  • DIBP 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

457 visa programme to be abolished and replaced with new TSS visa.

Action Items

  • Employers sponsoring pending and upcoming applications for 457 visas to Australia should consult an immigration adviser for the latest information about these reforms.

This news alert was prepared using information provided by Visa Executive and Newland Chase

DISCLAIMER: The information contained in this immigration alert has been abridged from laws, court decisions, and administrative rulings and should not be construed or relied upon as legal advice. If you have specific questions regarding the applicability of this information, please contact Peregrine © 2021 Peregrine Immigration Management Ltd.