457 Visa to be Abolished - Replaced by Temporary Skill Shortage (TSS) Visa from March 2018

By Mark Webster
Tuesday, 18 April 2017

The 457 Visa is to be abolished from March 2018, and replaced by a new temporary work visa called the Temporary Skill Shortage (TSS) Visa.

This initiative was announced on Facebook by Australian Prime Minister, Malcolm Turnbull.

Some information on the new Temporary Skill Shortage (TSS) Visa are now available on the Department of Immigration website.

Changes to the occupations list for 457 visas will come into effect from 19 April 2017 - with some sources suggesting that up to 200 occupations will be removed from the approved list.

The changes will also impact on people applying for permanent residence through the Employer Nomination Scheme (ENS) and the Regional Sponsored Migration Scheme (RSMS) visa.

New Temporary Skill Shortage (TSS) Visa

There is some information on the requirements for the new temporary work visa replacing the 457 visa.

The main points are as follows:

Occupations List

From 19 April 2017, a shorter list of occupations will be allowed for the 457 visa - some sources suggest that up to 200 occupations will be cut.

We would expect that the shorter list would also apply to the new TSS visa.

A change to the approved list for 457 visas could also impact on the ENS direct entry visa, the Occupational Trainee Stream of the Training Subclass 407 visa, and state nominated General Skilled visas (ie the Skilled Nominated Subclass 190 and Skilled Regional Provisional Subclass 489 visa).

Work Experience

A minimum of 2 years of work experience will be required to meet the requirement for the visa. The skill level for a 457 visa can currently be met without any work experience, providing the applicant has relevant qualifications.

This change will impact significantly on those without work experience in the occupation - particularly international students completing studies in Australia.

Labour Market Testing

Labour Market Testing would require employers to show that they have advertised the position to be filled and show that a local is not available to fill the position.

Currently, Labour Market Testing is only required when nominating trade occupations, nursing or engineering occupations for a 457 visa. The announcement indicates that Labour Market Testing will be required in all cases when applying for a TSS visa, except when exempted by international trade agreements.

If Labour Market Testing is required in most cases when applying for a TSS visa, this could significantly delay lodgement of the visa application - particularly important when filling an urgently required role or where the applicant's visa is expiring.

Visa Period

There will be 2 streams for the TSS visa - a short-term stream of 2-years and a medium-term stream of 4-years.

The short-term stream can only be renewed only once.

The medium-term stream is likely to have higher requirements (eg English language ability, shorter occupations list) and can be renewed or may also lead to a permanent visa.

Police Clearances

Police clearances will be required for the TSS visa. Depending on the country of residence, these can take several months to come through. Police clearances are not required for 457 visas, unless the applicant has a criminal record.

Permanent Employer Sponsored Visas

Changes have also been outlined for permanent employer sponsored visas - this would potentially affect both the ENS and RSMS visas. It is not yet clear when these changes would come into effect - most likely this would be March 2018.

Likely changes include:

Work Experience: 3 years of work experience will be required to apply for permanent employer sponsored visas in general.
Transition from 457: for the ENS and RSMS Temporary Residence Transition stream, applicants must currently show that they have worked for their employer on a 457 visa for 2 years. 3 years of work for the employer on a TSS will be required going forward
Age: applicants for permanent employer sponsored visas will need to be under 45 when applying. Currently, it is possible to apply for ENS and RSMS up to the age of 50, and a few concessions exist to waive the age requirement. This change would have a significant impact on older applicants.

Regional Concessions

The announcement indicates that certain concessions will be retained for regional employers. These may include:

Occupations List for Temporary and Permanent Employer Sponsored Visas: a wider range of occupations may be possible for both the 457/TSS and RSMS visas for regional employers.
Age Exemptions for Permanent Employer Sponsored Visas: age waivers are currently possible for the ENS and RSMS visa for certain occupations - this includes medical practitioners, academics and staff at Government scientific agencies. These concessions will be retained for regional employers, and might also be expanded

Conclusion

The changes to the occupations list for 457 visas will come into effect immediately - this is likely to impact employers in certain industries quite significantly. We expect the new list to be released tomorrow and will update as soon as details are available.

The new TSS visa is likely to be more restrictive than the current 457 visa - of shorter duration with tougher requirements in terms of skill level and labour market testing. Businesses seeking to sponsor staff for temporary visas should look at lodging their applications well before March 2018.

Applicants for permanent employer sponsored visas will also be impacted, but it is not yet clear when these changes will come into effect. The main changes are in relation to the amount of work experience required, English requirement and age limit. Applicants who are eligible for permanent employer visas should proceed with lodgement as soon as possible to avoid the changes.

If you would like advice on your eligibility for an employer sponsored visa, please book a consultation with one of our advisors.

If you are an employer looking to sponsor staff, feel free to call our corporate hotline on (02) 9230 0888.