My company is a 457 visa sponsor– How will the change to the new TSS visa scheme affect me?

Overview of relevant changes:

Many Australian companies are understandably concerned about the major changes to the temporary skilled visa program.

This is the most extensive set of changes to the program in many years, and it has positive aspects for employers, as well as some elements that will make life more difficult.

In addition to changes to the eligibility criteria for employees, sponsoring employers under the new Temporary Skills Shortage (TSS) Visa scheme will be subject to some new requirements:

  • Training Benchmarks are abolished from March 2018, replaced by the new ‘Skilling Australia Fund’. This simplifies expenditure requirements for businesses, but will lead to some businesses paying more ($1200 per sponsored employee for businesses with turnover below $10 million; otherwise $1800 per sponsored employee).
  • Introduction of a ‘Non-discriminatory workforce test’
  • Labour Market Testing will be mandatory, unless an international obligation applies.

Most significant, however (from a business planning perspective) are the changes to visa duration for employees in occupations on the Short-Term Skills Shortage List (STSSL), but not the Medium-Long-Term Skills Shortage List (MLTSSL). These employees can now only apply for a 2-year visa, which does not have a pathway to Permanent Residency (and is limited to one renewal).

Employees with occupations on the Medium-Long-Term Skills Shortage List (MLTSSL) can apply for up to a 4-year visa, with a pathway to Permanent Residency after 3 years.

Practically, this is expected to reduce incentives for businesses to sponsor employees in occupations that are not in the highest demand.


Impacts on Sponsorship and Nominations:

If you are an existing business sponsor, your sponsorship status will not be affected by these changes. You will be able to nominate workers for both the 457 visa (pre-March 2018) and the TSS visa (from March 2018).

However, any nominations lodged after the changes come into effect (in March 2018) will need to be under the new TSS scheme, with the visa application matching the nomination.

For this reason, if you have lodged a nomination for an employee prior to the March 2018 changes, but the visa application is not lodged in time, your nomination will need to be withdrawn and re-lodged under the new scheme. Provision will be made for refunds of Visa Application Charges in these circumstances.