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Robust New Foundations - Independent Review Recommendations of the Subclass 457 Program

Written By Michael Walker
Mon, Sep 15, 2014
Michael Walker

A 4 person review panel has just handed over its report to the Minister for Immigration, the Hon. Scott Morrison.

The review of the 457 visa program, was conducted by the panel over a period of 4 months. The Report, entitled Robust New Foundations – A Streamlined, Transparent and Responsive System for the 457 Program, seeks to cut away the inordinate red tape and intrinsic anomalies in the programme, which is in line with the terms of reference provided by Minister Morrison’s brief to the review panel.

The report has made 22 recommendations to the Minister and of greatest interest to Australian Employers, who use or are considering using the 457 visa program, we highlight the following from the panel’s report:

Please note: These are recommendations from the independent panel, and have not yet been implemented by DIBP.

Market Salary Rate: the market rate framework was introduced in 2009, with the objective of ensuring that the terms and conditions of employment, including remuneration, were no less favourable to an Australian worker in the same occupation.

The panel has recommended that this remain in place as a core component of the 457 program, with the exemption rate being aligned to the top marginal income tax rate, which is currently set at $180,000.

Temporary Skilled Migration Income Threshold (TSMIT): the panel recommended that the TSMIT be preserved. However, that it not be indexed until a further review takes place within 2 years. The TSMIT is currently set at $53,900.

- 1. Recommends that concessions to the TSMIT may be granted under the negotiated Labour Agreements, Enterprise Migration Agreements and Designated Area Migration Agreements, as may be deemed appropriate.

- 2. Recommends that the Government give consideration to introducing concessions for regional areas of Australia, where evidence clearly supports such concessions.

- 3. Recommends that more clarity be provided to stakeholders, where the base rate of pay is below TSMIT, but annual guaranteed earnings raises income above the threshold and the nature of payments which may be included in calculating those guaranteed earnings.

Training Benchmarks: Under current training requirements, in order that an Australian Business may be approved as a sponsor of 457 visa applicants, the evidence requested by the Department of Immigration is onerous and cumbersome. As such, the review panel recommended that the current training benchmarks be replaced by annual contributions to accredited training funds.

English Language Testing: Where required, the current English language requirement is met by the 457 visa applicant providing evidence of having vocational English, through either a qualifying English language testing system score or demonstrating 5 years of consecutive study, at High School level or higher, where all tuition is provided in English. Accordingly, the panel recommended the following:

- 1.That the English Language testing system requirement be amended to allow for an average test score rather than the flat ceiling score.

- 2.Greater flexibility be afforded to industries or businesses, seeking concessions on the English Language requirement, for certain occupations, on a case by case basis.

- 3.That consideration be given to increasing the number of nationalities, which are currently exempt from meeting the English Language requirement.

- 4.Instead of the current exemption of 5 years continuous study, where the tuition is provided in English, 5 years cumulative study be accepted.

Validity Period of Approved Business Sponsorships: The panel recommended that the current 3 year approval period for established businesses, be increased to 5 years, with start-up business’ approvals being increased from 1 year to 18 months. Other recommendations are as follows:

- 1.Develop a simplified process for sponsorship renewals.

- 2.The timeframe to advise the Department of notifiable events be extended from the current 10 days to 28 days.

Pathway from 457 visa into Permanent Residency: the panel recommended that the pathway into permanent residency should revert to working in Australia for at least 2 years before applying for permanent residency, with consideration being given to allowing 1 year of employment with the nominating employer. The panel also recommended that the current age restriction be reviewed for those holding 457 visas, but are above the age level, at the time of applying for permanent residency.

Compliance and Monitoring: the panel recommended that allocation of more resources be provided, with the objective of helping sponsors to understand and comply with their obligations under Law.

TSS Immigration will keep you informed when any of the recommendations are implemented, providing further specific information.

If you have any questions feel free to conatact any of the Registered Migration Agents at TSS Immigration

03 9421 1020

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