457 Visa - Training Benchmark changes

Changes continue to be rolled out by the Department of Immigration & Border Protection (DIBP).  A recent change relates to the training benchmarks that 457 business sponsors are obliged to meet - this article explains how the changes impact employers.

Benchmark A - Payments to a Training Fund

This involves paying 2% of payroll to an industry training fund. From July 2017 payments may be made to one of the following:

• Industry training fund
• Fund managed by recognised Industry Body
• Scholarship fund operated by Australian TAFE or University.

The following types of expenditure are now not eligible:

• Funds operated by RTOs or private individuals
• Funds paying commissions or offering refunds if application fails

The main impact of this change is that the previous practice of private education providers accepting payments for Benchmark A will be discontinued.

Benchmark B - Expenditure on Training Australians in the Business

This involves spending 1% of payroll on training Australians in the business. From July 2017 payments may include:

• Apprentices, trainees or recent graduates
• RTOs delivering face-to-face training which contributes to formal qualification
• eLearning or training software
• Formal courses of study + associated costs (e.g. travel)
• Training officers - must be "sole role" of the employee (to train other employees in the business)
• Attending conferences for Continuing Professional Development (CPD).

The following types of expenditure are now not eligible:

• Salaries of staff attending training
• Membership fees - this was previously counted
• Books, journals or magazine subscriptions - this was previously counted
• Conferences for purposes other than CPD
• Hiring a booth at trade show, conference or expo On-the-job training - previously, structured on-the-job training could be counted in some circumstances
• Training not relevant to business' industry - it is not clear how closely related the training must be to the industry
• Training of principals or family members - previously, training of family members could be counted providing it was also made available to other employees
• Induction training.

Based on current information, it appears that payment of external providers to deliver training for Australian employees, is excluded unless it leads to a formal qualification. This would form the bulk of the training expenditure of most businesses and so many will need to restructure their training to comply with the new Benchmark B. Once further clarity is available we will let you know.

What is also unclear at the moment is whether 457 business sponsors who have been calculating their training benchmark expenditure on the previous training benchmark provisions will be deemed to have satsified the requirement. 


We are awaiting further clarificaton on these points from DIBP and will provide further updates once available.

Calculating 'Payroll'

As a general rule, payroll includes:

• wages and salaries as per state payroll legislation, and
• payments made to contractors or subcontractors if the work completed is related to services or products provided by sponsor

If the business does not have ‘a payroll’ they are expected to count Directors' salaries, fees and drawings, or the profit of the business.

Timing of Training Activities

Payroll and training expenditure must be for the same period.

From July 2017, it has been clarified that this expenditure may be for the 12 months prior to lodgement of an application, or for the previous full financial year - this should help employers to gather relevant information and documentation.

Start-up businesses operating for less than 12 months will be required to show they have an auditable plan to meet these benchmarks.

We will provide ongoing updates as information becomes available, including the training requirements from March 2018 when the new ‘Temporary Skills Shortage’ (TSS) visa commences (replacing the current 457 visa).


Whether you are an individual visa holder considering how these changes affect you personally or an employer wondering how these and the further proposed changes affect your ability to recruit globally please feel free to contact us at Nevett Ford to see how we are able to assist. 

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Employer Nomination Scheme (Subclass 186 Visa) - Changes Commence

Further to the announcement earlier in the year by the Department of Immigration and Border Protection (DIBP) the first wave of amendments to the Employer Nomination Scheme have been released, with most changes taking effect from 1 July 2017. 

The major talking points from these amendments include:

• The reduction of the upper age limit from 49 to 44 years of age for an applicant (Direct Entry Stream);
• The removal of the exemption from providing a skills assessment due to earnings being above the high income threshold (Direct Entry Stream);
• The removal of the exemption from providing evidence of competent English due to earnings being above the high income threshold (Direct Entry Stream);
• A change in the level of English Language Skill required by primary applicants (Temporary Residence Transition Stream).  This change has increased the requirements from vocational to competent which in practice this means an IELTS test score of at least 6 in all bands (or equivalent test); and
• The introduction of specific requirements, for particular occupations (known as caveats) for applications made under the Direct Entry program.  This now mirrors that which applies under the Temporary Work 457 visa program which was originally introduced in April 2017. 

High Income Threshold Exemptions
While most of the above reforms apply on to applications lodged after 1^st July 2017, both the English Language and Skills Assessment exemptions where the High Income Threshold was met were retrospectively applied to applications lodged but not finally determined by that date.  The subsequent media release made by the DIBP clarifying that these amendments would not be applied to applications lodged before 1 July 2017 has not yet been backed by formal legislative amendment supporting this statement.

Reforms Overall
In an earlier blog post we outlined the timetable of changes which is taking place.  The above represents step one of the broader reform agenda due to affect both the Temporary Work Visa program (Subclass 457) and the Employer Nomination Scheme (Subclass 186). This agenda will see changes rolled out on an on-going basis until March 2018, by which time all announced reforms will have been implemented. 

Whether you are an individual visa holder considering how these changes affect you personally or an employer wondering how these and the further proposed changes affect your ability to recruit globally please feel free to contact us at Nevett Ford to see how we are able to assist. 

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