Australia: Commonwealth overhauls skilled migration program

The Commonwealth Government announced a number of significant changes to its temporary and permanent skilled migration programs on 18 April 2017. The aim is to more suitably tailor the programs to Australia's skills needs, increase the quality and economic contribution of skilled migrants, and address public concerns about the displacement of Australian workers.

Under the program overhaul, it will abolish the Temporary Work (Skilled) visa (subclass 457) and replace it with the new Temporary Skills Shortage (TSS) visa in March 2018. The TSS will support businesses to address skills shortages in their workforce, but will contain a number of safeguards that prioritise Australian workers for employment opportunities. The Employer Nomination Scheme (ENS) visa (subclass 186) and Regional Sponsored Migration Scheme (RSMS) visa (subclass 187) for permanent migration will also be amended.

Some of the reforms have already come into effect, with changes due to be completed by March 2018. The below table summarises the changes.

The immigration policy detailing these changes is yet to be finalised, however, we anticipate this will be done shortly through the implementation process. We will keep you informed of any further amendments and updates on the policy's progression.

Changes to temporary working visa Changes to permanent skilled migration visa
From 19 April 2017

Occupation lists

  • The Consolidated Sponsored Occupation List (CSOL) will be renamed to Short-Term Skilled Occupation List (STSOL) and will be updated every six months based on advice from the Department of Employment.
  • 216 occupations have been removed from the list of eligible occupations and caveats have been added to 59 occupations. The interim guidelines on the new 457 amendments indicate that on occupations where a caveat has been placed, it does not replace any higher skills requirement that may be applicable at the visa application stage, as per the occupation requirements outlined in the Australian and New Zealand Standard Classification of Occupations.
  • Primary applicants whose occupations are on the STSOL can have their 457 visas issued for a maximum of two years with onshore renewal only allowed once.
  • The Skilled Occupation List (SOL), predominantly used for skilled migration, will be renamed Medium and Long-Term Strategic Skills List (MLTSSL).
  • Primary applicants whose occupations are on the MLTSSL can have their 457 visas issued for a maximum of four years with a capacity of renewal onshore and a permanent residence pathway after three years.
  • Dependants (secondary family applicants) joining primary 457 visa applicants will not be impacted. Dependant visa applicants can still have their subclass 457 visa match the visa period of the primary visa holder even if this is longer than two years.

Occupation lists

  • The CSOL will be renamed to STSOL and will be updated every six months based on advice from the Department of Employment.
  • The STSOL has been significantly condensed, with 216 occupations removed and access to 24 occupations restricted to regional Australia.
  • The SOL, predominantly used for skilled migration, will be renamed to MLTSSL.
  • Caveats have been added to 59 occupations.
From 1 July 2017 English language requirements
  • The salary exemption threshold, which exempts applicants whose salary is over $96,400 from the English language requirement, will be removed.

Police clearances

  • Police clearance certificates will become mandatory.

Training benchmarks

  • Immigration policy about training benchmarks for sponsors will be clarified in legislative instruments.

English language requirements

  • A score of 6 in each test component in the International English Language Testing System (IELTS) (or in an equivalent test) is required.

Occupation lists

  • The STSOL will be reviewed further based on advice from the Department of Employment.
  • The MLTSSL will be revised based on outcomes from the Department of Education and Training's Skilled occupation list review.

Age limit

  • A maximum age restriction of 45 years at the time of application will apply to direct entry stream applicants.
  • A maximum age restriction of 50 years at the time of application will continue to apply to temporary residence transition stream applicants.
Changes by December 2017

Tax file numbers (TFN)

The immigration department will begin TFN collection for 457 visa holders and other employer-sponsored migrants. The data collected will be matched with the Australian Taxation Office records to ensure visa holders are not being paid less than their nominated salary.

Obligations and sanctions

  • The Department of Immigration and Border Protection will publish details of sponsors who are sanctioned for failing to meet their sponsorship obligations under the Migration Regulation 1994 (Cth) and related legislation.
From March 2018 Introduction of the TSS visa
  • The subclass 457 visa will be abolished and replaced by the TSS visa.
  • The TSS visa program will comprise a short-term stream (STS) of two years and medium-term stream (MTS) of up to four years.


  • Onshore visa renewal only once.
  • An overall score of 5, with a minimum of 4.5 in each test component, in the IELTS (or an equivalent test) is required.
  • Genuine temporary entry requirement.


  • Onshore visa renewal and a permanent residence pathway after three years.
  • IELTS (or equivalent test) completed with a minimum score of 5 in each test component.
  • Genuine temporary entry requirement.

Eligibility criteria for both TSS streams, includes:

  • At least two years of relevant work experience.
  • Mandatory labour market testing.
  • Meets the minimum market rate and the temporary skilled migration income threshold requirements currently set at $53,900.
  • A non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workers.
  • A strengthened training requirement for employers to contribute toward training Australian workers.

For ENS and RSMS visas

  • The MLTSSL will apply with additional occupations available to support regional employers for the RSMS pathway.

Minimum market salary rate

  • Employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold requirements currently set at $53,900.

Residency requirements

  • The permanent residence eligibility period will be extended from two to three years.

Work experience

  • At least three years of work experience is required.

Age limit

  • All applicants must be under the maximum age of 45 years at the time of application.

Training requirement

  • A strengthened training requirement for employers to contribute toward training Australian workers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Arathi Tekkam (formerly with Sparke Helmore Lawyers)
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