Government endorses Subclass 457 programme reforms

18 Mar 15



What is the change? The Australian Government announced its support for nearly all of the changes that had been recommended to overhaul the Subclass 457 visa programme.

What does the change mean? The Government endorsed changes that touch on English-language testing, training programmes, fees, processing and efforts to crack down on abuse. The Government declined to abolish labour market testing, but officials are likely to consider ways to streamline the process.

  • Implementation timeframe: Ongoing. Some of the changes have already been implemented; others will require legislation.
  • Visas/permits affected: Subclass 457 visas.
  • Who is affected: Employers sponsoring foreign workers in the Subclass 457 visa category.
  • Impact on processing times: Some of the changes are intended to streamline processing and simplify renewal procedures.
  • Business impact: While the Government announced its intention to crack down on employers who abuse the programme, many of the changes will make the Subclass 457 process easier for responsible employers.
  • Next Steps: BAL will continue following the changes to the Subclass 457 visa category as they are rolled out in the weeks and months ahead.

Background: In September, a committee published a report recommending sweeping changes to the Subclass 457 programme. On Wednesday, the Government announced its support for a strong majority of the committee’s recommendations. The changes the Government support cover a number of areas, including:

  1. English-language requirements: The English-language requirement will be changed so that an average score of five across the four categories of the International English Language Testing System (IELTS) – speaking, reading, writing and listening – will be accepted. Currently a score of five in each category is required. A minimum score of 4.5 in each of the categories will still be mandated. The Government will also give consideration to alternative English-language test providers.
  2. Training: The Government endorsed abolishing training benchmarks and replacing them with annual training fund contributions based on the number of 457 visa holders and scaled according to the size of the sponsoring company. The funds raised will be used to train Australians for the job market.
  3. Sponsor approval: Standard business sponsors will be eligible to be approved for five years and start-up business sponsors for 18 months. Additionally, the time permitted to notify the Department of Immigration and Border Protection of a “notifiable event”, such as the end of a 457 visa holder’s employment, will be extended to 28 days. Currently, only 10 days are permitted.
  4. Fees: Fees structures will be reviewed, particularly for secondary visa and visa renewal applicants.
  5. Processing: The Government will consider a streamlined processing system. Changes to processing would take into account “risk factors”, including business size, occupation, salary and past “sponsor behaviour”.
  6. Eligibility for other programmes: Subclass 457 visa holders will be required to work for a minimum of two years in Australia before being eligible for the Employer Nomination Scheme or Regional Sponsored Migration Scheme. The Government will also review the age restriction on 457 holders transitioning to either of these two schemes.
  7. Information sharing: The Department of Immigration and Border Protection and the Australian Taxation Office will share more information to monitor the 457 programme. Subclass 457 visa holders will be required to provide the Department of Immigration and Border Protection their Australian tax file number.
  8. Programme abuse: Sponsors will be barred from accepting payments made by visa applicants for purposes of securing a “migration outcome”. Violating this rule will result in “robust” penalties for offenders.

The only recommendation the Government rejected was one to consider expanding the list of countries whose nationals are not subject to English-language testing. The Government took note of, but did not explicitly support, a recommendation to abolish employer-conducted labour market testing. The Government is likely to consider ways to reduce the red tape involved in the current labour market testing process, however.

BAL Analysis: Overall, the Government’s support for a number of changes to the 457 scheme is welcome news to employers who participate in the programme. The changes are designed to make it easier for employers to find high-skilled foreign employees, while simultaneously cracking down on employers who abuse the programme.

Options for residency could be limited by the requirement that subclass 457 visa holders work for a minimum of two years in Australia before being eligible for the Employer Nomination Scheme or Regional Sponsored Migration Scheme. The change, when implemented, will have a negative impact on some foreign nationals.

This alert has been provided by BAL Australia. For additional information, please contact

MARN: 9683856

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