Goodbye 457 Visa, Hello TSS Visa
Published On: April 9, 2018
Global Mobility Immigration Lawyers‘ principal lawyer, Ariel Brott, recently spoke at the AHRI International HR Management Network Forum about the TSS Visa (Temporary Skill Shortage Visa), and how it differs from the old 457 Visa.
Listen to the Audio:
Good evening, everybody. It’s lovely to see everybody here. We relaunched the international human resources management network forum last year, and had the inaugural forum in November. And it’s nice to see so many people returning, and I love to see the new faces here too. So welcome.
Today I’m going to speak about the new TSS visas. The title of this is “Good bye 457 visa, hello TSS visa”. That’s inspired by my 2-year-old, whose favourite words other than “no”, are “good bye” and “hello”. And any opportunity to simplify anything to do with immigration law is very welcome.
So let’s get started. I’m Ariel Brott. I’m an accredited specialist immigration lawyer with global mobility immigration lawyers. We’re going to talk about temporary visas. If there’s time and if there’s interest, we’ll talk about the permanent employer-sponsored visas. Just a quick poll: who actually is interested in hearing about the permanent side of this? A few people. Okay, so we’ll talk about that. And then if there is time, and I’m not sure if we will, because Mira is going to be speaking shortly about HR compliance, so I need to be mindful of time. But if there is time, we’ll talk about alternative pathways. But it’s all on the power point. If anybody wants a copy of it, I’ll have it emailed to you after the talk.
Okay, so last year in April, Malcolm Turnbull turns up on Facebook and announces that he is killing the 457 visa, or “abolishing” was the term he used, or I think the term the opposition used was “rebranding”. So they… you will hear a lot of talk of a more “robust” and “streamlined” visa and “integrity” and “credibility” and so on. But essentially, this is still the temporary employer-sponsored visa. It’s certainly a bit more difficult than things were previously but it is still possible, at least for some. So, probably the biggest impact of all this was we previously had a single list, which was [unclear 04:14] and that had close to 700 occupations. It had things like goat farmers and blacksmiths [unclear 04:20] on it. Those occupations were easy to cut because nobody was actually using them.
Now they have split the occupations into two different lists. The short term skilled occupations list, the STSOL and the medium long term strategic list, the MLTSSL. And apparently regional employers will have access to additional occupations, which haven’t been released yet. We’re actually advised that these changes are going to occur in the first half of March. So we’ve been working away feverishly into the early hours of the morning to get ready and yet here we are on March 15 and no TSS visa yet.
Other changes to occupations, other than that, there’s now the concept of a [unclear 05:11]. Previously certain occupations which had fallen into disfavour because there were perceived abuses. As a matter of policy, Immigration imposed certain restrictions. For example they wanted you to be earning above certain salary thresholds or they wanted the business to have a certain turnover or there distinctions between what kind of customers you’re required to be dealing with. But those policies were always capable of being challenged later on in the Administrative Appeals Tribunal. They’ve now moved to put these caveats into a legislative instrument and of course the Administrative Appeals Tribunal has to follow the law. So they try to enshrine some of these concerns which does make things a little bit more difficult. But there’s always a way. One thing to note sometimes is they, is these occupations lists, they are not set in stone, they will be updated every six months. And there may even be opportunity for people like you and me to have an impact and influence on those sorts of things, so that’s something worth talking about.
Okay, so some broad changes which apply to all streams. As I mentioned before, we’ve got two streams. We’ve got the short term stream and the medium, long term stream. All sponsorships are now meant to be valid for 5 years, which is nice. You don’t have to go to your immigration lawyer every few years [unclear 06:38]. This is also a welcome change.
Immigration’s flagged that this is something that will apply at least for accredited sponsors. And if anyone’s not sure, an accredited sponsor is – just very briefly – there’s a special status as a sponsor where instead of waiting, I think the current service standard is 5 to 11 months, if you get accredited, and there are various streams for accreditation, you can get things granted within days. And now that the department is spending billions of dollars on things like artificial intelligence, they’re actually looking at robots granting low risk applications, and they’re talking about getting visas in minutes, which really brings back these visas to their original purpose, which was to help company needs and businesses deploy staff quickly. They were never a permanent visa and originally it was a matter of weeks or maybe couple of months if you’re unlucky to get a 457 visa. And things have gotten to a place where some people wait for a year or longer, which doesn’t really make sense from a business point of view.
You really need to [unclear 07:52] always back to the business case because while they may have invoked to say we’re getting tough on immigration, we’re cutting down on 457, to kill the 457. Ultimately, these things make good economic sense, and people [unclear 08:07] coming years will be going back and forth as we have in the previous years in terms of, they’re going to give a little, they’re going to take back a little, and [unclear 08:17] and that may just be based on something as crazy as just some focus groups, they’ve done that sort of, they’ll get an [unclear] if they say they’re getting rid of something, which are [unclear 08:25].
Finally, labour market testing. So those of you who are familiar with the current 457 regime, certain occupations are subject to labour market testing. What that means, it’s a fancy term to mean advertising for a job, this has traditionally come from pressure from the unions that they need to protect Australian workers, ostensibly to also stop foreign workers being exploited and so on. They’re now doing this not just for trade occupations but for everything. So if you are hiring somebody using the TSS visa, there will be rules around minimum periods of time that you must advertise. They’re going to be more restrictive now about where you can advertise. A lot of people previously were just throwing up an ad on Gumtree for a couple of days. I spoke to a [unclear 09:25] TSS, the temporary section, a couple of weeks ago. She used the phrase, “Gumtree is a thing of the past”. And look, I didn’t really like it anyway because even if something is permitted it doesn’t necessarily make for a good application to do it. You want to have a credible application and if you use things like Gumtree, inevitably, you’re going to attract greater scrutiny. The case officer’s going to be looking for reasons to refuse the visa. They’re going to be looking for fraud because they see a lot of fraud. So it’s always best to follow best practice and put your ad somewhere like [unclear 10:06].
So all [unclear 10:13] TSS that the long term and the short term one. This is [unclear 10:18] character, so previously police certificates weren’t generally required unless something was flagged. Now everybody has to provide a police certificate. And that [unclear 10:29] in certain countries can take an awful long time to provide a police certificate.
There’s going to be a non-discriminatory workforce test. The details of that are unclear but essentially it’s going to come down to, is your entire business made up of people that you’ve sponsored. If you have, you’re going to have problem sponsoring more people. So they’re going to be applying some sort of test looking at different balance and proportion of foreign workers that you’re employing.
They’re bringing in a new terminology. It’s proliferated with different terminologies around different salary rates. There’s [unclear 11:10] annual market salary rate, and the big difference there is that it can’t be lower than the TSMIT which is the current threshold, which is currently $53,900. Previously, you could to include certain non-monetary benefits for example, if you’ve got a relocation package, if you’re providing housing, car and so on, you used to [unclear 11:35] make a case for that. Now they’re saying you need to exclude that. So you cannot be below $53,900, at least as far as we’re aware, no legislation’s been released.
Health waivers. This has been one of the great things about the 457 visa. Most visas in Australia are subject to health criteria. And when somebody fails the health criteria, for example if it’s health conditions going to exceed $40,000 in costs, you’re expected to [unclear 12:09] covering them themselves. It’s very difficult to get certain visas. You have to prove some compelling and compassionate circumstance. So you have run around to different medical specialists and try to [unclear 12:20] if they do meet the criteria. It’s a big headache. But the 457 visa has always had an easy out to that, which was, if your sponsor’s willing to underwrite that risk, they’re willing to cover those costs, then you get your health waiver. That’s been removed. Immigration doesn’t like that anymore. So now 457 is [unclear 12:39] with all the other health waiver [unclear 12:42]. There is a health waiver but with applicants who for example they have a child who might have cerebral palsy or something like that. They’re going to have to fight really hard to get that visa.
Another change, positive or negative depending on how you look at this. But in order to apply for a TSS visa, you’ll need either a substantive visa – a substantive visa being just a normal visa – or a bridging visa A, B or C. A bridging visa is a visa you get between two visas. So if you’ve got one visa and you apply for another visa, and your first visa expires while you’re waiting, you get a bridging visa. It used to be a broader range of bridging visas that you could apply for, for example a bridging visa A if you’re [unclear 13:29] or something like that. [unclear 13:33]. But the positive side is there’s no more schedule 3. So [unclear 13:37] immigration schedule 3 is like the [unclear 13:46] bridging visas, so if you do apply for a bridging visa, traditionally you’d have to jump through all sorts of hoops [unclear 13:55] how you ended up with a bridging visa for reasons beyond your control and a bunch of other things, that’s no longer going to apply. So that’s a big positive. It makes the process easier for most people.
Okay. English. English has been an obstacle to a lot of people traditionally. Now there are various tests you can do. I’m just going to talk about IELTS because that’s what most people are familiar with. If you’re not[unclear 14:28] we can talk a little bit about this later. But the equivalent of 5 overall and no less than 4.5 in each component, so speaking, reading, writing and listening. And that will remain the case for the short term list. But for the medium, long term list, it’s going to be no less than 5 in all four components. They’ve also removed the high salary exemptions. So it used to be that if you were going to get $96,400, you don’t have to meet the English requirement. They decided to get rid of that. We complained and lobbied, myself included, because I had a number of foreign companies who sent their employees here and they don’t speak very good English. So they’ve decided to exempt foreign [unclear 15:20] sponsors. So if you don’t have an office in Australia, you’re sponsoring people on 457s and you can meet that salary threshold, you don’t have to have the requisite English.
Okay. Training. This is a big one. This could potentially be a deterrent to some companies because it’s so very, very expensive. So until now, for 457s, there have been two different training benchmarks you could choose to meet. One was you need to prove that you have spent the equivalent of 1% of your payroll on training your Australian staff per year. And the alternative was, if you didn’t have time to train your staff, you can make contribution to a fund and that would be 2% of the payroll, so double.
They’re getting rid of all of that. Instead of making it a part of sponsorship, it’s going to be something payable at the nomination stage, so some of you may know there are three stages to these [unclear 16:20], you need to be [unclear 16:24], there’s the sponsorship approval, then you nominate that position that is required and in time you go to the visa application. Training is assessed at the sponsor stage. Now they’re bringing it to the nomination stage and instead of basing it upon training that you’ve done or a training contribution of 2%, they’re now bringing in what is called the Skilling Australians Fund. The Department will be collecting this on behalf of the Department of Education and Training. And it’s expensive. For businesses [unclear 16:59] less than $10 million a year, the price will be $1,200 a year, but all that’s payable upfront. So if you’re applying for a 4-year visa, you’re looking at paying – what is that – $4,800. If your business turns over $10 million or more, it’s $1,800 a year, which is [unclear 17:24] been informed it’s tax deductible.
(Is that per employee?)
That’s right. That’s right. So that can get terribly expensive, instead of just paying the 1%. And let’s not forget, companies will still want to conduct actual training per employee. It’s almost punishing the companies doing the right thing. So you might already be spending millions of dollars training your Australian staff but now you have to pay this Skilling Australians Fund, whatever that might be.
(What about sponsored family members?)
Right. Well, it’s funny you bring that up because until a couple of years ago, there was only a single visa application charge and then they started charging per family member. So again, they all got family [unclear 18:10] but now [unclear 18:12] so that’s difficult.
So that’s the training funds. There’s a lot more to be said about that so I would love to talk to people later about that. Okay, so the short term stream: the base application charge [unclear 18:45] so this would be changed as well. And this is one of the major changes and differences between these two groups which I have discussed here. With the TSS short term stream, you can only get 2 years. You can renew it once onshore. And then that’s it. You can go offshore and try again. But maybe you’re offshore for a year when they have to process it, and then [unclear 19:28] refer to it as the genuine temporary entrance criteria, which essentially means it will take a little bit… well, are you someone who is trying to establish de facto residence in Australia, or [unclear 19:43] worker, who’s just coming here to work temporarily then intends to leave.
And this is a huge disincentive to a lot of potential workers who would come here otherwise, because whether you like it or not, if you want to attract somebody to move themselves, their family and their career to another country and then set down new roots, that’s a really tough ask for somebody who might only get 4 years and then have to pack up and go home again. And some industries which are really heavily reliant on foreign workers, who do struggle to find Australians to work, for example the restaurant industry who have a massive turnover, the sponsor visas have been really good to them. Suddenly, the restaurant managers aren’t on the right list. And they are struggling to find [unclear 20:35] now. It was hard enough before, but now [unclear 20:39] somebody having a pathway to move to permanent residence one day, well, maybe they won’t come at all. Maybe they’ll go to a different country. So that’s a huge difference.
For the medium term stream, [unclear 20:57] they are available for up to 4 years. You can renew them an unlimited number of times. And they do provide a pathway to permanant residence. Under the current 457 regime, it’s possible to transition to permanent residence after 2 years to, for example [unclear 21:23]. With the TSS visa, this period will be 3 years, which is good or bad depending on where you’re coming from. I know for a lot of employers that’s sort of a good thing, because you’re guaranteed a loyal employee for all of 3 plus years, which in some industries is a very long time.
Okay, so a few more changes to mention. Again, the occupations lists. Well, the MLTSSL has a limited range of occupations available for [unclear 22:02]. Regional areas will have extra occupations. It hasn’t been revealed which [unclear 22:10] we can assume certain things like flower growers and farming type occupations will be on there. We just don’t know yet, which makes it very difficult to advise people and unfortunately very difficult for people to plan their lives if they don’t know where things stand.
Work experience. So previously for the direct entry stream of permanent visas you’d need 3 years experience minimum. That’s now moving across to the 187 regional sponsored [unclear 22:57] as well. This is about the direct entry, so you wouldn’t have been on a TSS visa [unclear 23:10].
Age. This is another one that the Government is going to war on. They pay a lot of attention to the productivity commission, when they want… previously the maximum age was 50, they brought it down to 45. Not just for the permanent employer-sponsored visas but also for some of the skilled visas as well. So it’s actually getting younger and younger. And ultimately, this all just comes down to tax. They want good tax payers who can be here a while, working away, and they’re not retiring too soon.
Similar to the temporary visas, the permanent employer-sponsored visas will have to make payment to the Skilling Australian Fund [unclear 23:57]. So after you have done your TSS visa or paid your $6,000, $7,000, $8,000 or whatever, when you decide to move across to permanent residency, there’s another one-off charge. That’s $3,000 per worker or $5,000 per worker, just depending on the turnover of the business.
Okay now do I have time to talk about alternatives? Okay. So there are a few different things you can do. Some of them are permanent options. Some of them are temporary options. So let’s just very, very lightly go over some of these things. Again, we can talk about [unclear 24:44] if you wish.
So the first thing to mention, I mentioned this before, is these occupation lists are not static. The people who put them together at the Department of Jobs and Small Business, they do occasionally [unclear 25:02] they take submissions. And it’s open to you to make submissions or talk to somebody who would like to make submissions on your behalf. Put pressure on them. A good example of that is they removed management consultants from both lists. So suddenly management consultants couldn’t get TSS visas at all. But because the big four accounting firms are so reliant on that particular occupation, and they have a lot of political muscle, they didn’t just bring management consultants back onto the list, but they brought it back onto the superior, medium long term list. So that’s quite a jump from not being there at all to suddenly being on a really good list. [unclear 25:44]. Does the demand in the economy for management consultants suddenly change over that few weeks that that happens? But these things do change. It’s worth making submissions and making a business case for why you might need a particular occupation on the list.
Okay, so one permanent option that might be worth looking at is the 190 state sponsored skilled visas. It’s a permanent visa, and short term occupation list occupations are eligible. The catch is, every state has its own small list of occupations that they want in that state. So while you can go to that broader short term list, that narrows down very much when you have to go to the state list. And of course every state has a different list. States impose all sorts of different requirements. Some might want you to have a PhD. Some might want you to have a very high level English. Some might want you to have a job offer.
Skilled visas are points based visa. So they allocate points based upon your age, your experience, qualifications and your English and so on. And then they cherry pick people that have the highest points. The base line is 60 points. At the moment, because people are scrambling to these alternatives, the median point is something like 70 to 75, which is quite a high level, very difficult to get. But [unclear 27:24] it will go down again in future.
Another skilled visa is the 887 skilled regional visa. It’s granted after you’ve been through a couple of years on a conditional 489 skilled regional visa, this is for regional areas. The definition of regional varies, depending on who’s sponsoring you. So this is basically sponsored by a state or by family. And interestingly, if you’re being sponsored by family, Melbourne is considered a regional area. The problem is Victoria actually offers very, very few of these sponsorships. So they give and then they take away. They offer about two every round. [unclear 28:15], so it’s not something to gamble your life on.[unclear 28:18] little bit easier to get than what I previously referred to [unclear 28:24] get some extra points, which makes it easy to get a higher score on that points test. Otherwise very similar – similar English requirements, similar age requirements and so on. And of course if you’re doing a state-sponsored one rather than through the family stream, then you do need to be in a truly regional area.
Temporary options. For students, the TSS visa has really been a blow. And I’ve heard from the immigration people themselves, they’re actually targeting graduates. They don’t want people being sponsored, people who come here to study, and then expect they’re just going to suddenly be sponsored and become permanent residents. They don’t like that. I don’t know why. You spent all this time educating people and then making them useful, and then we want them to go home and take those skills elsewhere. But what they’ve done is they’ve imposed s requirement for 2 years experience before you can actually get sponsored for a TSS visa, which means that unless you had experience in your occupation, post-qualification experience in your occupation for 2 years prior to applying for a TSS visa or prior to coming to Australia and studying, you can’t be sponsored [unclear 29:42].
But some students can after their studies get a temporary 485 visa, which is granted for somewhere between 2 and 4 years depending on what qualification they obtain. So for example if they’ve achieved a PhD, they can get 4 years. If they’ve done a regular degree, they get 2 years. So that’s an opportunity for some graduates to actually accumulate the experience required for a TSS visa.
(Ariel, how strict are they in verifying that sort of education and work experience?)
They’ll make you go to a skills assessment body. And every skills assessment body is different. So the medical profession has a skills assessment body, [unclear 30:39] have their own one, pharmacists have one, and so on. And each one has different levels of stringency. Typically they’re going to want to see references. Sometimes they might call the references. They may want to see your tax records, pay slips and so on. And of course what they’re really looking at is obviously that this is actually post-qualification experience and they want to see that it was full time as well.
So depending on the skills assessment body you’re dealing with, and if [unclear 31:13]. But a good example is the Australian Institute of Management, who are just notoriously difficult. Unless you are the CEO of BHP, they find it very difficult to understand that you might be a manager in business. You need to show that something like 5 people reported to you, 5 people reported to each of your reports and so on. And it gets very difficult. So the short answer is that it does vary. But you need [unclear 31:42].
Work and holiday visas. It’s not really a long term option, but there are work and holiday visas available to quite a few countries these days. A younger worker who may not be around for that long, they can get a one-year work and holiday visa and potentially get a second year as well. And of course in that second year, you can build up all sorts of experience that can lead to a TSS visa.
One thing to note with working holiday visas and for work and holiday visas is that there is a 6 month limitation on working for any one employer. And it’s quite common issue. I get a lot of clients coming to me saying they’ve hired someone on a working holiday visa. They’re absolutely brilliant. They want to sponsor them. And then once you sponsor them, you can get exemptions to that 6 month work limitation. So while you’re waiting for it to be processed, they might hit that 6 month point and it’s fairly easy to have an exemption then or waiver.
The work and holiday visa. Very similar, just different countries, and a few other differences, but for the purposes of today, pretty much the same.
And then the 407 training visa. Usually this is something that was sometimes used for people who couldn’t quite meet the criteria of a 457 visa. It doesn’t have the same sort of requirements for English and so on. But that’s one way of thinking about… If you can prove this is a form of training, you show a training plan, that it’s genuinely enhancing somebody’s skills, then you might be able to get 2 years for a training visa.
That’s it. So thank you so much for sitting through half an hour of immigration law. You’re going to get a much more exciting talk from Mira and then after that there’s food and drink. So stick around.