Prime Minister's Announcement - Abolition & Replacement of 457 Visas

Prime Minister Malcolm Turnbull announced that his Government will abolish the Subclass 457 visa to ensure that Australian workers receive priority for Australian jobs. He has, however, acknowledged the importance of businesses continuing to have access to the skills they need to carry out their businesses and expand. The 457 visa will in fact be replaced with a new temporary visa.

The changes are significant, and will be introduced in various stages. The final stage will see the replacement of the subclass 457 visa with the Temporary Skills Shortage Visa (TSS Visa). The 457 visa will continue to operate, albeit in modified form until March 2018. Generally, we expect processing times to continue to increase as these changes are implemented. There will also be tougher requirements for priority processing requests.

What changed on 19 April 2017?

New occupation lists 

As of 19 April 2017, there are now two occupation lists:

STSOL - the 457 occupation list (currently named the ‘Consolidated Skilled Occupation List’ or CSOL for short) will be condensed and renamed as the Short-Term Skilled Occupations List (STSOL). This list will be subject to review every 6 months by the Department of Employment (which effectively means that other occupations may be added or removed as required).

MLTSSL - The occupation list for skilled migration (such as the 189 points test visa) will also be limited and renamed as the ‘Medium and Long Term Strategic Skills List’ (MLTSSL).  

In practice, the new lists will limit which kinds of occupations an employer can nominate for sponsorship, and also the period that the visa can be granted for as per the below. The full list of the removed occupations can be found here .

IMPORTANT – The change in occupation lists will mean that if the occupation has been removed from the above lists, the 457 applications which are currently lodged and pending finalisation will need to be withdrawn (a refund can be obtained). This will have serious implications for applicants located in Australia and will need to be assessed on a case by case basis. Similarly, if an existing 457 visa holder wants to renew their 457 visa for a longer stay, they will be unable to do so if their occupation has now been removed from the list.

Caveats for specific occupations 

The new lists also include caveats for some specific occupations. It is unclear at this stage how the caveats will be applied however the Department has stated that these caveats are designed to reduce the broad usage of certain occupations (particularly in semi or low-skilled roles). The caveats have been grouped into 3 groups:

Group A – caveats for specific occupations requiring 2 years work experience in addition to the general ANZSCO skill requirement.

Group B – caveats to exclude certain rural trade occupations being nominated in areas NOT in regional Australia.

Group C – caveats relating to specific occupations. For instance, a caveat is in place for the occupation of Accountant (ANZSCO 221111) preventing it being nominated for any of the following:

  1. Clerical, bookkeeper and accounting clerk positions
  2. Positions in businesses with an annual turnover of less than 1m per annum;
  3. Positions in businesses that have fewer than 5 employees.

These caveats build further on the ‘genuine position’ policy which was reinforced last year – resulting in an increased refusal rate across the 457 visa program. The caveats essentially provide case officers with further scope to refuse applications where they are not satisfied that a nominated position is not as ‘high-level’ or ‘genuine’ as it purports to be, when taking into account the size and context of the business where the position is based.

Visa validity period 

Historically the 457 visa has been granted for any period up to 4 years. From 19 April 2017, a 2 year visa will now be granted for occupations on the STSOL and 4 years for the MLTSSL.  This will also apply to 457 applications which are currently lodged and pending finalisation (with the exception of subsequent applicants e.g. spouses or children who will still be granted a visa in line with the primary visa holder).

What is going to change on 1 July 2017?

From 1 July 2017, the following changes are proposed:

Occupation lists – will be further reviewed based on feedback from the Department of Employment.

English language requirement – The current exemption to the English language requirement where the base salary is $96,400 or over will be removed. At this stage we understand that an exemption will still be available for 5 years of study undertaken in English and for a limited number of eligible passport holders.

Police checks – will be required for all primary and secondary applicants over 18. No details have been released but we assume police clearances will be required from every country where the applicant has lived for 12 months or longer in total in the last 10 years. This is significant as it will contribute to the delay in processing of applications.

Training requirement – it is anticipated that the annual Training Benchmark requirement for standard business sponsors will be replaced with a contribution to a government training fund. This is in line with the Department’s proposed recommendations on this issue from March 2015. It was expected that this would be introduced by the end of 2015, however this was subsequently delayed. Further information is expected to be released with the Federal Government’s new budget announcements on 9 May 2017.

  1. Skills assessments – the number of occupations requiring a mandatory skills assessment for 457 nomination is expected to increase.
  2. New online lodgement system – The Department will move from their current eVisa system to a new ‘eLodgement Plus’ system. Hopefully this will improve and streamline the lodging process.
  3. Fees – it is expected that nomination and visa application fees will increase. 

What is going to change in December 2017?

Before 31 December 2017, the following changes are proposed:

  1. ATO data matching – The Department of Immigration will commence the collection of Tax File Numbers of 457 visa holders and data will be matched with the ATO to ensure sponsors are paying their visa holders at the nominated levels.
  2. Publication of sanctioned sponsors – standard business sponsors who are subject to a sanction for breach of sponsorship obligation will have their details made public. 

To learn more about the proposed changes, download our reports below

It is important to note that some of the proposed changes may be amended as parliament debates them. There is information being released constantly and the above may be subject to change.