IMPACT – HIGH
What is the change? Employers that sponsor or nominate foreign workers for Temporary Skill Shortage (TSS) visas or for the permanent Employer Nomination Scheme (subclass 186) or Regional Sponsored Migration Scheme (subclass 187) visas from March 2018 will be required to pay into a new ‘Skilling Australians Fund’ under a proposal released Tuesday in Australia’s Federal Budget. The budget also calls for steep increases to visa application charges for certain TSS visa applicants, as Australia continues to take steps toward prioritising domestic workers over skilled migrants.
What does the change mean? Effective March 2018, affected employers will be subject to levies of A$1,200 or A$1,800 per year (or part thereof), depending on the company’s size, for every primary TSS visa applicant. Employers will also be required to make one-off levy payments of A$3,000 or A$5,000, depending on company size, for every primary subclass 186 visa or subclass 187 visa applicant. Base visa application charges (primary applicant charge) for the TSS visa programme will be set at A$1,150 for short-term (two-year) visas and at A$2,400 for medium-term (four-year) visas.
Additional information: The release of the Federal Budget Tuesday followed Australia’s announcement in April that it would abolish the 457 temporary skilled visa programme in favour of a new TSS visa stream that will more tightly control migration and the hiring of skilled workers.
Plans for a Skilling Australians Fund date back to a 2014 review of the Subclass 457 visa programme. The fund will replace current training benchmark requirements and support skill development and apprenticeship programmes for Australian workers. The levies will apply not just to TSS visas, but also to the permanent Subclass 186 and Subclass 187 visas. Levies will be assessed as follows:
The base visa application charges for the proposed TSS visa, meanwhile, represent a significant increase over current levels for the existing Subclass 457 visa programme. The base visa application charges will increase to A$1,150 for the Short-Term (up to two years) TSS visa stream and A$2,400 for the Medium-Term (up to four years) TSS visa stream. By contrast, the current base visa application charge for Subclass 457 visas is A$1,060 and is set to increase modestly to A$1,080 on 1 July 2017.
Visa Application Charge Increases from 1 July 2017
The Federal Budget includes moderate Visa Application Charge (VAC) increases for a number of Australian visa subclasses beginning 1 July 2017, including the following:
A complete list of the VAC increases is available on this Department of Immigration and Border Protection fact sheet.
BAL Analysis: The changes announced in the budget further reflect Australia’s move toward prioritising domestic workers over skilled migrants in the national workforce. The Skilling Australians Fund levies and new visa application charges will impose significant costs on businesses bringing skilled migrants to Australia. The replacement of the 457 visa programme is expected to further narrow the eligibility criteria for companies to recruit foreign skilled workers, even after Australia recently took steps to limit eligibility for 457 visas. Eligible foreign skilled workers, who are interested in applying for Australian permanent residency through the employer-sponsored Subclass 186 and Subclass 187 visa programmes, should seriously consider applying prior to the proposed March 2018 reforms, as their future Australian permanent residency options may become limited. BAL is closely following developments and will update clients as additional changes are announced.
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