News headlines on 18 April 2017 screamed that the controversial subclass 457 visa will be abolished on 19 April 2017.
Well, not quite yet.

The fact is that the subclass 457 visa still exists for the time being, although it is changing and taking a different shape.

The changes are coming in several phases with the first phase implemented on 19 April 2017, and to be completed by March 2018 when the visa will eventually be called Temporary Skill Shortage (TSS) visa.
The first phase which came with little warning brought the following changes:

a) The previous list of eligible occupations has been renamed and revamped as follows:
The Consolidated Sponsored Occupations List (CSOL) was renamed Short-term Skilled Occupation List (STSOL), and
The Skilled Occupations List is now called Medium and Long-term Strategic Skills List (MLTSSL)

b) 216 occupations have now been removed from the list of eligible occupations (200 removed from eligibility for all visa applications, and 16 occupations are strictly listed for subclass 189, 485 and 489 (family sponsored) applications only

c) caveats/ special notes are added to 59 other occupations

d) 24 occupations are restricted to regional Australia employer (location of the employment, not necessarily the head office of the company which can be located in non-regional area)

What are the implications for the current applications?
If you have a 457 application currently undecided (after 18 April 2017), and the nominated occupation is one of:

• The occupations that was removed from the list (even if you have an approved nomination):
then your visa application will be refused. It can be withdrawn and a refund can be requested.

• The occupations on the STSOL or MLTSSL, but does not meet condition/s on the special notes for the particular occupation:
the application will be refused. Similar to the above case, it can be withdrawn and refund can be requested.

• The occupations on the STSOL and any specific caveat requirement is met:
then your visa can only be granted up to 2 years.

• The occupations on the MLTSSL and any specific caveat requirement is met:
then your visa can be granted up to 4 years.

What will change on 1 July 2017?
The second phase of the changes will include more tweaking to the 457 visa regime and also changes to the associated permanent resident visa options (ENS and RSMS):
• possible further adjustments to eligible occupation lists, based on input from various stakeholders
• an expansion of client cohorts for whom mandatory skills assessments are required. Currently applicants from selective countries who nominate certain occupations are required to submit a formal 457 skill assessment, per 1 July this list will be expanded
• Adjustment/ clarification to Training benchmarks assessment for subclass 457 sponsors
• mandatory police clearance for applicants
• English salary exemption $96,400 to be removed

 

And some changes in relation to ENS/RSMS visa

English language: In addition to the 457 changes above, for Employer Nomination Scheme (ENS) and Regional Sponsored Migration Scheme (RSMS) permanent visa applications, IELTS 6 will be required (or equivalent test) for both Direct Entry (DE) and Temporary Residence Transition (TRT) streams.

TRT stream is for applicants who have met eligibility criteria (ie working with the current employer for at least 2 years on sc457 visa)

Age limit: The Direct Entry stream will have 45 years age limit at the time of application, and the Temporary Residence Transition stream applicants will have 50 years age limit.

Commitment to employer: ENS / RSMS applicants will have to commit for a further 3-year employment with the sponsor (instead of the 2-year commitment currently required)

Further adjustment before 31 December 2017

• Collection of Tax File Number (TFN) of the visa applicants for data matching with ATO
 
 

By March 2018

• Visa subclass 457 will be officially replaced by TSS.

• TSS visa holders on the STSOL list will be able to extend it onshore only once (for a further 2 years stay maximum). There is no limit on how many times someone can apply offshore, but of course DIBP has thought about it and introduce the Genuine Temporary Entrant (GTE) criteria, so applicants will have to prove that they only intend to stay in Australia temporarily.

English language:

IELTS 5 overall (no band below 4.5, or equivalent test) is required for any 457 visa applicant nominating an occupation on the STSOL

IELTS 5 each band (or equivalent test) is required for any 457 visa applicant nominating an occupation on the MLTSSL

Work experience: Minimum 2 years work experience will be required for all 457 occupations unless special caveat apply

• Labour Market Testing will be mandatory for all nominations unless international obligations apply (such as under Free Trade Agreements)

… and some changes related to ENS/RSMS as below

Eligible occupations: Direct Entry applications will need to refer to MLTSSL for list of eligible occupations.
Work experience: applicants will need to have at least 3 years work experience (Direct Entry stream), while applicants on the TRT stream need to have 3 years eligibility period (up from the current 2 years eligibility period)

• Strengthening training requirements for employers (details are yet to be announced)

Age limit: applicants will have to be under 45 years old at the time of application

Minimum salary: employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold (TSMIT). At the moment employers must pay market rate but there is no requirement to meet TSMIT for ENS/RSMS.
For now, DIBP has imposed special conditions for some occupations, and these conditions can be broadly grouped into 4 types
A. Occupations which will require minimum 2 years of full time work experience:
Advertising Specialist; Contract Administrator; Finance Manager; Graphic Designer; Hairdresser; ICT Project Manager; ICT Support Engineer; ICT Systems Test Engineer; Information and Organisation Professionals nec; Software Tester; University Lecturer

B. Occupations which can only be nominated for a position in a regional area:
Agricultural Technician; Apiarist; Aquaculture Farmer; Beef Cattle Farmer; Cotton Grower; Crop Farmers nec; Dairy Cattle Farmer; Flower Grower; Fruit or Nut Grower; Grain, Oilseed or Pasture Grower (Aus) / Field Crop Grower (NZ); Grape Grower; Horse Breeder; Livestock Farmers nec; Mixed Crop and Livestock Farmer; Mixed Crop Farmer; Mixed Livestock Farmer; Pig Farmer; Poultry Farmer; Primary Products Inspectors nec; Production Manager (Forestry); Sheep Farmer; Sugar Cane Grower; Vegetable Grower (Aus) / Market Gardener (NZ); Wine Maker

C. Occupations that have specific caveats mainly to prove the ‘genuineness’ of the position, which can include the setting of the work place/business, annual turnover, number of staff employed, main duties of the occupation to make sure it is not used for lower skill level applicants, base salary etc. :

Included in this cohort are:

Accountant; Animal Attendants and Trainer; Baker; Cook; Chef; Café and Restaurant Manager; Chief Executive or Managing Director; Hair or Beauty Salon Manager; Hotel or Motel Manager; Conference and Events Organiser; Corporate General Manager; Customer Services Manager; Corporate Services Manager; Facilities Manager, Management Consultant; Marketing Specialist; Massage Therapist; Mechanical Engineering Technician; Pastry Cook; Recruitment Consultant; Sales and Marketing Manager; Supply and Distribution Manager; Technical Sales Representative nec; Transport Company Manager; and various ANZSCO group 121 – Farmer (sheep farmer, poultry farmer etc).

D. Occupations that can only be used in an application for visa subclass 189, 485, and 489 (state/territory sponsored):
Project Builder; Production Manager (Mining); Medical Administrator; Ship’s Engineer; Ship’s Master; Ship’s Officer; Chemicals Engineer; Materials Engineer; Electronics Engineer; Industrial Engineer; Production or Plant Engineer; Civil Engineering Technician; Telecommunications Network Planner; Pressure Welder; Stonemason; Electrical Linesworker

There is a high chance that these occupations will be dropped off MLTSSL come 1st July 2017.

 

How does it affect current 457 visa holders?

Current 457 visa holders can be affected if they are:

• Changing employer/sponsor, as the new nomination will need to meet the new eligibility requirements
Unless the government provides transitional arrangement for existing 457 visa holders, applying for ENS/RSMS after March 2018 will be more restrictive. These visa subclasses will only use MLTSSL for the list of eligible occupations, which means occupations such as cooks, pastrycooks, architectural draftperson etc will not be eligible unless they are included on MLTSSL by that time.

• Applying for ENS/RSMS will be affected by various changes mentioned above, especially the changes scheduled for March 2018 (age limit, work experience, eligibility period, English language requirement, whether the nominated occupation is on MLTSSL or not, training requirement for employers, meeting market rate and TSMIT requirements etc)

Therefore it is advisable, if you are eligible, to lodge the permanent employer sponsored visa (and also GSM visa) as soon as possible.

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