News Flash

UPDATED 1 July 2017: Reforms to (186/187) Permanent Employer Sponsored Visas

07-Jul-2017

The following information is of a general nature and cannot substitute for professional legal advice. Always seek the advice of a qualified immigration specialist who is aware of, and can take into account, your individual circumstances and tailor advice accordingly.

This Newsflash has been updated to incorporate changes that came into effect on 1 July 2017.

While much of the media attention has focused on the sudden replacement of the Temporary Work (Skilled) visa (Subclass 457) with a new Temporary Skill Shortage Visa program, big changes have also hit the Employer Nomination Scheme (Subclass 186) (ENS visa) and the Regional Sponsored Migration Scheme (Subclass 187) (RSMS visa).

What is the permanent employer sponsored visa program?

The objective of the Permanent Employer Sponsored Program is to enable Australian employers to sponsor highly skilled foreign workers for permanent residence to fill vacancies in their business.

The two most common streams for the ENS visa are:

  • The Direct Entry (DE) Stream: For 457 holders who have not worked for their employers for the last two years, other visa holders in Australia (including BVA, B, C visa holders), or applicants applying directly from overseas.
  • The Temporary Transition (TRT) Stream: For 457 visa holders who have worked for their employer for the last two years and the employer wants to offer them a permanent position that matches, or closely aligns with their 457 occupation.
While the government has said that changes will not impact current 457 visa holders (approved prior to 19 April 2017) applying for the TRT stream, it is unclear whether this still holds for the new changes coming into effect in March 2018.

What are the key changes, and how will they impact you?

The below table focuses mainly on the ENS visa. In general, requirements for the RSMS will be less strict. However, note that changes coming into effect in March 2018 will apply to both the ENS and RSMS visas:

This will impact all applications lodged on or before 1 July 2017, as well as those lodged before 1 July 2017 that have not been finally determined.

Date
Change Impact on 186 Direct Entry (DE) stream
 Impact on 186 Temporary Residence Transition (TRT) Stream 
19 April 2017 The current Consolidated Sponsored Occupation List (CSOL) will be renamed the Short-Term Skilled Occupations List (STSOL).

The Skilled Occupations List (SOL) will be renamed the Medium and Long-term Strategic Skills List (MLTSSL).
 		 If you lodged your application before 19 April 2017 – no impact.

If you lodge your application on or after 19 April, you must now nominate an occupation on the new STSOL (which has fewer eligible occupations than the previous CSOL).
 		 No Impact


1 July 2017 		 1 July 2017 The STSOL and MLTSSL has been reviewed and revised.

 		 If your occupation has been removed from the list, you will be impacted if you apply on or after 1 July 2017.  No impact.  
English requirements: International English Language Testing System (IELTS) (or equivalent test) score of 6 in each component ie. Competent English.   This is the same as before.   This is a higher standard (previously, the requirement was only a score of 5 in each component ie. Vocational English.)
English exemptions:
Applicants will no longer be able to access English language exemptions based on having a high salary.
 		 This will only impact applications lodged on or after 1 July 2017.
Age requirements  Applicants must be younger than 45 years of age.  A maximum age requirement of 50 will continue.
Genuine Need
Nominations must provide evidence of ‘Genuine need’ for the person to work in the nominated position 
 
March 2018 		 For both ENS and RSMS visas, the MLTSSL will apply, with additional occupations available to support regional employers for the RSMS Again, this means further restrictions on eligible occupations  Presumably, the MLTSSL will also apply. 
Residency: The permanent residence eligibility period will be extended from two to three years. No Impact
 457 visa holders will need to wait an extra year before applying for permanent residency. 
Work experience: Applicants must have at least three years’ relevant work experience. No Impact
457 visa holders will need to work an extra year (currently, the requirement is only 2 years work experience). 
Age requirements: All applicants must be under the age of 45 at the time of application.   No impact (as this already applies from 1 July 2017).  Applicants must be younger than 45 years of age. 
Employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold (TSMIT).  New requirement to meet TSMIT. 
Employers nominating a worker for an ENS or RSMS visa will be required to pay a contribution to the Skilling Australians Fund (SAF).  The contribution will be:

  • payable in full at the time the worker is nominated.
  • $3,000 for small businesses (those with annual turnover of less than $10 million) and $5,000 for other businesses.
General tips and tricks

  • Applicants for both the DE and TRT streams face stricter requirements from 1 July 2017.
  • Employers should consider the impact of the additional costs associated with mandatory contributions to the Skilling Australia Fund, due to come into effect in March 2018. This provides further incentive to lodge outstanding Subclass 186 or 187 visa applications as soon as possible.
  • While the costs are significant, SAF contributions for permanent visas would be paid as a one-off, as opposed to temporary skilled visas (such as the Subclass 457), where they must be paid continually for each year the visa is granted or renewed. As such, sponsorship of permanent visas may be advantageous in that they are a means to retain valuable staff, while not being that much more costly than temporary skilled visas.
  • Changes from March 2018 will have a particularly significant impact, as the new MLTSSL will apply. For TRT stream applicants, it is likely permanent residency, work experience and age requirements will be much more restrictive than before. Prospective applicants should be prepared to lodge applications with complete information as soon as possible, before the new changes come into effect.
What’s still uncertain

We emphasise that until the Department of Immigration and Border Protection (DIBP) releases specific legislation and policy details, there are still some grey areas as to how these changes will impact certain visa applicants. For example:

  • It’s uncertain the extent to which the above changes will impact people granted 457 visas before 19 April 2017, and looking to apply for the TRT stream of the ENS visa.
We will keep our clients up to date as more information is released.


Source: DIBP