Australia: 457 visa – 1 July 2017 changes

Further to the Federal Government's announcement on April 19, 2017 about the abolition of the 457 visa program and the proposed staggered changes until March 2018, the second stage of the reforms to the 457 visa program were released on July 1, 2017.

457 visa applications can continue to be lodged until March 2018. From March 2018, prospective visa applicants must apply for the Temporary Skilled Shortage visa.

Businesses should be aware of these changes to assist them with better planning their workforce.

A summary of these changes is provided below:

What has changed?
New/updated legislative instruments
  • Legislative instruments are legal documents that describe particular rules of the subclass 457 visa program that are subject to change from time to time by the Minister for Immigration and Border Protection (DIBP).
  • New/updated legislative instruments:
    • IMMI 17/060 – specification of eligible occupations and caveats (retrospective for nomination applications made on or after July 1, 2017 and not finally determined before July 1, 2017)
    • IMMI 17/057 – English language requirements, that is tests, scores and exemptions (retrospective for nomination applications made on or after July 1, 2017 and not finally determined before July 1, 2017)
    • IMMI 17/045 – training benchmarks and requirements (updated)
Eligible occupations
  • New transitional provisions cover all applications made on or after July 1, 2017 and applications made and not finally determined before July 1, 2017 regardless of whether the nomination application was made before, on or after July 1, 2017
  • Revised eligible occupations lists cover over 200 occupations with 36 new eligible occupations – refer to legislative instrument here
  • Removed occupations will impact 457 and 186 Direct Entry Stream visa applications lodged on or after July 1, 2017
  • Removed occupations will impact 457 visa or nomination applications still being processed on July 1, 2017 – these applications will need to be withdrawn or they will be refused
  • Removed occupations will not impact current 457 visa holders unless a further 457 visa application is lodged or there is a change in occupation or employer
  • 12 Medium and Long-Term Strategic Skills List (MLTSSL) occupations (previously unavailable) added including, for example, biochemist,  biotechnologist, food technologist, microbiologist, life scientist, geophysicist and  petroleum engineer, in line with the recent lobbying activities
  • Eight MLTSSL occupations are now eligible for the 457 and 186 visa programs including certain engineers, stonemasons and civil engineering technicians
  • 16 Short Term Skilled Occupations List (STSOL) occupations (previously unavailable) added including aeroplane and helicopter pilots, flying instructors, and aircraft maintenance positions, R&D Manager, IT/ICT positions, artistic director, music directors and professionals, dress makers and tailors
  • Two occupations moved from MLTSSL to STSOL – anaesthetist and productions manager (mining)
  • 23 occupations moved from STSOL to MLTSSL including certain executive and management occupations, chemist, economist, certain engineering professionals, environmental type occupations, university lecturer and faculty head and certain IT/ICT positions
  • 22 occupations entirely removed from the list (nine of which were previously eligible for 457 and 186 visa programs) including university tutor, shipping type occupations, equipment hire manager, psychotherapist, real estate and property management type occupations 
  • Occupations on MLTSSL have a pathway to permanent residence post March 2018
  • 67 restricted occupations by caveats (refer below)
  • Revised occupation lists are based on extensive consultation with industry, labour market analysis and advice from Government Departments
  • Occupations lists are expected to be revised again on January 1, 2018
Visa validity
  • Four years from the date of visa grant if the occupation is listed on the MLTSSL with unlimited renewals and pathway to permanent residence 
  • Two years from the date of visa grant if the occupation is not listed on the MLTSSL with one renewal (no pathway to permanent residence)
  • Visa validity policy now specifies that a 457 visa may be granted for up to four years for occupations listed on STSOL if requested by the sponsor and required to meet international trade obligations (for example, Free Trade Agreements, World Trade Organisation)
Occupational caveats (groups: work experience, regional and occupation specific)
  • The purpose of the caveats is to minimise fraud and integrity concerns
  • Caveats provide additional detail about the permitted scope of occupations beyond ANZSCO definition
  • Caveats relate to position requirements (vs visa applicant’s experience)
  • 69 caveats in total; some have been revised, refer  here
  • Caveats apply to 457 visa and nomination applications which were lodged on or after July 1, 2017 or were lodged before July 1, 2017 but have not been determined
  • If an occupation is now subject to a caveat, DIBP will assess if the caveat applies in the particular circumstances of the nominated position
  • DIBP advises that pending applications lodged before July 1, 2017, which cannot meet the caveats, should be withdrawn or they will be refused
  • Current 457 visa holders are not impacted by the caveats unless a further 457 visa application is lodged or there is a change in occupation or employer
  • Two years' full time relevant work experience in the same or similar occupation if the occupation is subject to a work experience caveat
  • Caveats will now also apply to 186 employer nominated permanent residence visas lodged on or after July 1, 2017
  • Caveats are subject to regular review
English language
  • English language proficiency must be determined via approved English language tests (unless exempted) - International English Language Testing System (IELTS test) overall band score is 5.0 with 4.5 for each test component; other approved English tests are available
  • English language tests are valid for three years from the date of visa application
  • English Language Salary Exemption Threshold (ELSET) (AU$96,400) is no longer available for applications lodged on or after July 1, 2017 however other exemptions remain in place
  • English language test results must be provided for applications lodged on or after July 1, 2017 unless the following exemptions apply:
    • the visa applicant is an employee of an overseas business/intra-corporate transferee from home/foreign entity to an Australian entity and has a nominated base rate of pay of minimum of AU$96,400; or
    • certain passport country holders i.e. UK, US, Canada, New Zealand, Republic of Ireland; or
    • the visa applicant must have completed at least five years of full-time study in a secondary or higher education institution where instruction was conducted in English; or
    • the nominated occupation will be performed at a diplomatic or consular mission of another country or an office of the authorities of Taiwan located in Australia; or
    • applicants who meet licencing, registration or membership requirements required to demonstrate English language competency 
Nominated salary
  • Data collection and matching with the Australian Taxation Office to ensure payment of nominated salary
  • Reporting of sponsors who are sanctioned for failing to meet sponsorship obligations
  • Changes to the nomination forms have been made requesting additional details including number of employees and workforce breakdown, labour market testing and international obligations requirements, relationships between the nominee and the owners, directors or principals of the business
International obligations
  • 1 July changes are being implemented in a manner consistent with Australia’s international obligations
  • Occupations subject to specific commitments in international trade obligations are not impacted by changes to the occupation lists
  • By way of policy, visa periods of up to four years are available where requested by the sponsor and required to meet Australia’s international trade obligations
Police clearances/character test
  • Mandatory police clearance certificates (also known as penal clearance certificates) for all visa applications lodged on or after July 1, 2017
  • Must provide police certificates for each country lived in for 12 months or more, over the last 10 years (calculated immediately before the time the visa application is lodged), since turning 16 years of age
  • All recorded offences must be declared; if not, adverse effect on application
  • Character Statutory Declarations or Form 80 – Personal particulars for character assessment may be requested in certain circumstances 
  • Processing times will vary based on the country from which police clearances are required; expedited processing may be requested in certain circumstances
Skill assessments
  • For applications lodged on or after July 1, 2017, the Department of Education and Training’s Trades Recognition Australia (TRA) 457 skills assessment program has been expanded to include additional nationalities for certain trades
  • Mandatory skills assessment also apply to program or project administrator and specialist managers
  • It is at the discretion of DIBP to request skill assessments for any pending or new applications
 Sponsorship requirements

Accredited sponsors

  • Criteria for sponsorship accreditation (which allows for priority processing) has been expanded to include four distinct categories of sponsors (1. Government agencies, 2. Australian trusted traders, 3. low volume usage and high percentage of Australia workers, and 4. high volume usage and medium percentage of Australian workers)  with required characteristics and additional documentary evidence  required for each category

Training benchmarks for Australian employees

  • Training benchmarks have been updated with a view to clarifying policy settings for the training benchmarks and requirements and to address  integrity concerns by amending types of applicable expenditure that are to be included when calculating payroll
  • A revised legislative instrument IMMI 17/045 will only apply to nominations or standard business approvals lodged on or after July 1, 2017
  • Sponsors who have been trading for 12 months or more must meet one of the two benchmarks:
    • Benchmark A – recent expenditure by the business equivalent to two per cent of the payroll in payments allocated to a training fund (i.e. industry training fund, fund managed by a recognised industry body or a recognised scholarship fund) that operates in the same/related industry of the business. The legislative instrument clarifies which training funds may be used and specifies that funds that offer commissions or refunds for failed immigration applications do not meet the requirements, OR
    • Benchmark B – recent expenditure by the business equivalent to one per cent of the payroll in the provision of training to Australian employees related to the purpose of the business
  • Recent expenditure is defined as expenditure made in the previous financial year or the previous 12 months
  • The definition of ‘payroll’ has also been clarified  by the legislative instrument to include ‘specified payments’ or in the absence of ‘specified payments’ to consider total monetary values of director’s salaries, fees and drawn payments or the actual profit of the business
  • Changes to sponsorship forms have been made requesting additional details relating to trading, training, etc
 Processing times
  • Current standard processing times are 4-7 months due to implementation of changes; priority processing may be requested based on business critical requirements
  • Improvements expected in August 2017

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