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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Migration Changes: July 2017 - March 2018

There is a large number of changes to migration law from July 2017 through to March 2018. 


1st July 2017
  

Processing Fees

Processing Fees are set to increase in line with the forecasted Consumer Price Index. Visa fees will be indexed annually from July 2017 onwards. Indexation will not apply to the second instalment of visa fees. 

457 Visa Changes

• Occupation Lists: The STOL occupation list will be reviewed and condensed further.
• English Language Requirements: English language test exemptions for applicants with a salary of over $96,400 will be removed.
• Character: Provision of penal clearance certificates will become mandatory. 

Additional Pathway to Permanent Residency for New Zealand Citizens

An additional pathway to Permanent Residency will be available from the 1st of July 2017 for New Zealand citizens who are special category visa holders, have been in Australia for at least 5 years, have arrived after the 26th February 2001 and can demonstrate set annual minimum income levels.

Up to 80,000 New Zealanders are expected to become eligible for Permanent Residency and applications are expected to be capped and queued. 

General Skilled Migration Changes

• Reduction of the Maximum Age:  The maximum age for the Skilled Independent Subclass 189 visa is set to decrease from 49 to 45 years.
• Revision of Skilled Occupation Lists:  MLTSS and STOL occupation lists are likely to be reviewed and some flagged occupations, particularly in the engineering sector are likely to be removed.
• Limitation of Skilled Invitation Numbers: Occupations ceilings indicating maximum numbers of invitations that can be issued to the Skilled Independent Subclass 189 and Skilled Regional Provisional Subclass 489 visa applicants will be released.
• State Sponsorship: Nominated Skilled State Migration programs will reopen. Many occupations are expected to be filled quickly and we recommend applicants to lodge their applications early. 

November 2017

New Temporary Sponsored Parent Visas

The introduction of the new temporary sponsored parent visa for bringing in overseas parents of Australian citizens and permanent residents has been postponed to November 2017. 15,000 visas will be made available annually. The visas will be valid for 3 or 5 years at a cost of $5,000 and $10,000 respectively.  The new parent visa will be renewable for a combined maximum of 10 years. 


December  2017

Employer Sponsored Migrants

The DIBP will commence the collection of tax file numbers for current 457 visa holders and other employer nominated and sponsored migrants. The resulting data will be matched with the ATO’s tax records to ensure that visa holders are not paid less than their nominated salary. 

The DIBP will commence the publication of details of sponsors sanctioned for failing to meet employer obligations.


Early 2018

Partner Visas

Partner Visa Sponsorship changes will not proceed as of the 1st July 2017. The new regulations proposed that partner visa sponsorship applications would need to be lodged under stricter criteria and approved before the overseas partner visa application could be lodged.

The new 2 step process is expected to delay the lodgement of the overseas partner application and require the overseas partner to have a valid visa until a visa application for the overseas partner can be lodged.The bill proposing the new regulations is currently before the Senate and as such has not been enacted. It is likely to not come into effect until 2018.

We recommend that our clients take advantage of the deferral of the new regulation and lodge their sponsorship and partner visa application prior to the 2018 changes.

March 2018

Pathways to Permanent Residency for Current 457 Visa Holders
 

Current 457 visa holders will no longer be able to apply for Permanent Residency under the Direct and Employer Nominated Transition Streams if their occupation is no longer on the long and medium term occupation lists. We recommend that current 457 visa holders take advantage of existing transition streams and permanent employer nomination schemes to lodge their application for permanent residency as soon as possible.  

TSS Program Replaces 457 Visa Program

From March 2018, the current 457 visa program will be abolished and replaced with the new TSS visa program. The TSS visa will be comprised of a Short-Term stream allowing stays of up to two years, and a Medium-Term stream allowing stays of up to four years.

Short-Term Stream
 
The Short-Term stream is designed for Australian businesses to fill skill gaps with foreign workers on a temporary basis, where a suitably skilled Australian worker cannot be sourced. The Shot-Term stream visa is renewable only once.  The STOL occupation list will apply for Short-Term Stream applicants. 

Medium-Term Stream
 
The Medium-Term stream will allow employers to source foreign workers to address shortages in a narrower range of high skill and critical need occupations, where a suitably skilled Australian worker cannot be sourced.  Only the Medium-Stream visa holders may renew their visas onshore and may apply for permanent residence pathway after working for three years in Australia. The MLTSS occupation list will apply for Medium-Stream visa applicants.


Tighter Regulations
 
For both streams tighter regulations will be introduced including:

• Increased Work Experience Requirements
• Higher English Language Levels Requirements
• Mandatory Labour Market Testing
• Set Australian Market Salary Rates
• Additional Character, Anti-Discrimination and Training Requirements.

Contact Nevett Ford Lawyer today for specific advice regarding your visa situation. 

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Partner visa changes

The Migration Amendment (Family Violence and Other Measures) Bill 2016  proposed that partner visa sponsorship applications would need to be lodged and approved before the overseas partner visa application could be made.

The Bill has not been enacted as it is still before the Senate. Therefore, this requirement will not commence on 1 July 2017 as previously announced and has been deferred until 2018.

Please call our dedicated team of immigration lawyers and agents if you have any questions or queries.

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New Permanent Residence Pathway for New Zealand Citizens from 1 July 2017

Residence Requirement

The new pathway is only available to NZ citizens who started living in Australia on or before 19 February 2016. You will need to show that you were usually resident at this time. If you were in Australia for a short visit for a holiday or business would not suffice. On the other hand, if you were temporarily outside Australia on 19 February but were usually resident before this, you may well be eligible.


You will need to show that you have been usually resident in Australia for a continuous period of at least 5 years prior to applying. This continuous period of residence would need to have started on or before 19 February 2016. Showing that you are usually resident would normally involve 2 factors:

• Physical presence in Australia; and
• An intention to reside in Australia

Short visits outside Australia (eg holidays) would be acceptable, providing there is an intention to reside in Australia and you spend a significant amount of time in Australia. If you take up a job or permanent home outside Australia, this could affect your ability to show continuous usual residence in Australia.


You would need to have held a Special Category Visa (SCV Subclass 444) for the 5 years - this is the visa NZ citizens are usually granted on entry to Australia.

Income Requirement

You would need to provide ATO Notices of Assessment showing that you have earned annual taxable income at least equivalent to TSMIT (Temporary Skilled Migration Income Threshold) for the last 5 financial years.


The TSMIT has been $53,900 since 1 July 2013, but was $51,000 from 1 July 2012 to 30 June 2013.
Limited exemptions to the income requirement will apply - those currently announced include:

• Maternity, paternity or carers leave - application of this exemption is discretionary; or
• Inability to depart Australia due having been assigned primary care of a child by the Family Court of Australia and the child cannot be removed from Australia; or
• Currently receiving compensation for injury and ongoing rehabilitation or compensation would be discontinued if departing Australia

Age Requirement

Unlike other skilled visas, there is no age limit for the NZ stream of the 189 visa. The age limit for the subclass 189 visa will otherwise reduce to 45 from 1 July 2017, and will be reducing to 45 for permanent employer sponsored visas by March 2018 so this is a significant advantage for older applicants.

Including Family Members

Even if they are not NZ citizens, spouses and dependent children can be included in the application. If applying onshore, they must hold a substantive visa or Bridging A, B or C visa.

Health and Character Requirement

All family members included in the application must meet health and character requirements.


The waivable health criterion 4007 applies - this means that if you have a health condition which involves significant cost or use of scarce medical or community services, you can still be granted permanent residence provided the cost is not undue. For instance, if you have significant assets or solid health insurance, and can prove that you can meet your own medical costs, you may still be successful in your application.
Most other permanent visas require family unit members to complete health and character, whether they are included in the application or not. This is not the case for the new application pathway - only family members included in the application need to complete health and character.

Application Fees

Application fees are in line with current fees for the Skilled Independent Subclass 189 visa. However, only 20% of the application fee needs to be paid at lodgement. The balance of fees would only be payable once you have met all other criteria and are likely to be granted the visa.
Fees payable are below:

Applicant Type	At Lodgement	Prior to Grant	Total
Main Applicant	$720	$2,880	$3,600
Dependents 18 or Over	$360	$1,440	$1,800
Dependents under 18	$180	$720	$900

Unlike other permanent skilled visa types, there is no English Language Charge for applicants with less than Functional English.

Conclusion

For NZ citizens who were living in Australia on or before 19 February 2016, the new permanent residence pathway is extremely beneficial. In particular:

• There is no English language testing, skills assessment, points test, or sponsorship by an employer
• There is no age limit
• The income level is relatively moderate - and exemptions apply for people on parenting or carer leave
• There is a health waiver for applicants and family members with health conditions
• The bulk of the application fee is only payable once the requirements have been assessed and the visa is about to be granted

New Zealand Citizens who meet the criteria should consider applying for the new pathway as it offers very favourable access to permanent resident status. Given the current political climate, the opportunity may only be available for a limited time.

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Upcoming Partner Visa Changes: Separate Sponsor Application, 3-Year Provisional Partner Visa

The Department of Immigration & Border Protection (DIBP) has indicated that upcoming changes to the partner visa program will include requiring sponsors to lodge and be approved for sponsorship before their partners can lodge a partner visa application and increasing the time required on provisional partner visas from 2 years to 3 years. It is expected that the sponsor application will attract an additional application fee.


The changes to the partner visa program have not been formally announced and no date has been given for implementation of the new planned changes, and it is unknown what the financial ramifications of the changes may be. DIBP indicated that they currently have approximately 88,000 partner visas pending in the onshore pipeline, and partner visa application times for first and second stage partner visa applications have increased dramatically over the last 12 months with the implementation of additional character requirements for sponsors.


Grant rates for partner visas are noted at 81% for subclass 820 (compared to 84% last year), 75% for subclass 801 (compared to 78% last year) and 92% for subclass 100. Current schedule 3 affected cases are at 650 compared to 750 last year. The top countries of citizenship for applicants are China, Philippines and Vietnam.


DIBP also noted that when Natural Justice letters are issued to applicants under section 56 of the Migration Act 1958 and an applicant makes a Freedom of Information request to get a copy of their file from DIBP, DIBP is not required to wait for the FOI request to be completed before making a decision on the partner visa. This is of concern to some applicants and agents as the time to process FOI requests has increased substantially over the last 12 months and it can now take several months for FOI requests to be processed by DIBP.

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Age Limit for 189 Visa Points Tested Stream Lowered to 45 Years

Recent legislation has lowered the age limit at the time of invitation for subclass 189 points tested independent skilled visas to 45 years, requiring an applicant to be under 45 years of age at the time of invitation in order to make a valid application for this visa under the points tested stream.


Transitional arrangements in the legislation still allow for a person over 45 but below 50 to respond to an invitation if the invitation has already been issued by DIBP, however it is anticipated that with the passage of the new legislation, no further invitations will be issued to applicants who are 45 years of age or older for the points tested stream of this visa.


While the age has been lowered for applicants for the points tested stream of the subclass 189 visa, there is no age limit for the new NZ stream of the subclass 189 visa which NZ citizens holding a subclass 444 visa may be eligible for after being usually resident in Australia for 5 years and meeting income requirements.


Contact Nevett Ford Lawyers Melbourne today for advice and assistance.

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