Individuals and Travellers

Abolition and replacement of the 457 visa – Government reforms to employer sponsored skilled migration visas

On 18 April 2017, the Government announced that the Temporary Work (Skilled) visa (subclass 457 visa) will be abolished and replaced with the completely new Temporary Skill Shortage (TSS) visa in March 2018.

There will be three options available under this new TSS visa program:

  • Short-term stream – this is for employers to source genuine temporary overseas skilled workers in occupations included on the Short-term Skilled Occupation List (STSOL)1 for a maximum of two years (or up to four years if an international trade obligation applies)
  • Medium-term stream – this is for employers to source highly skilled overseas workers to fill medium-term critical skills in occupations included on the Medium and Long-term Strategic Skills List (MLTSSL)1 for up to four years, with eligibility to apply for permanent residence after three years
  • Labour Agreement stream – this is for employers to source overseas skilled workers in accordance with a labour agreement with the Commonwealth, on the basis of a demonstrated need that cannot be met in the Australian labour market and standard visa programs are not available, with the capacity to negotiate a permanent residence option.

This new visa is part of the Government’s significant reform package to strengthen the integrity and quality of Australia’s temporary and permanent employer sponsored skilled migration programs. The implementation of these reforms began in April 2017 and will be completed in March 2018.

Key reforms include:

  • April 2017: significantly condensing the occupation lists used for skilled migration visas, including the subclass 457 visa.
  • January 2018: further reforms of the occupation lists used for skilled migration visas, including the subclass 457 and 407 visas.
  • March 2018 - TSS: introducing the TSS visa, with new requirements, including but not limited to:
    • a requirement for visa applicants to have at least two years’ work experience in their skilled occupation
    • mandatory labour market testing, unless an international trade obligation applies,
    • capacity for only one onshore visa renewal under the Short-Term stream
    • capacity for visa renewal onshore and permanent residence eligibility after three years under the Medium-Term stream
    • a non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workers
    • a requirement to pay a contribution to the Skilling Australians Fund (subject to legislation passing).
  • March 2018 - Permanent: tightening eligibility requirements for employer sponsored permanent skilled visas, including but not limited to:
    • tightened English language requirements
    • a requirement for visa applicants to have at least three years’ work experience
    • applicants must be under the maximum age requirement of 45 at the time of application, (unless exemptions apply)
    • employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold (TSMIT)2
    • a requirement to pay a contribution to the Skilling Australians Fund (subject to legislation passing).

Further information on reforms is available:

More detailed information on the changes to be implemented for March 2018 will be published in due course.

1 Employers in regional Australia will have access to a broader range of occupations when the TSS visa is introduced. Existing permanent visa concessions for regional Australia, such as waiving the nomination fee and providing age exemptions for certain occupations, will also be retained

2 Set at AUD 53,900 as at 12 January 2018.