Changes to 457 visa program

Following the independent review into the Temporary Skilled (Subclass 457) visa program, the Australian government announced on 18 March 2015 its intention to implement a number of changes. The Australian government has now implemented the changes from 18 April 2015.

English language test

A visa applicant can now satisfy the English language requirement by obtaining an average score of five across all components of the International English Language Testing System (IELTS), rather than a score of five in each component (reading, writing, speaking and listening).

The government will now accept these English language tests in addition to IELTS as evidence of language proficiency:

  • Occupational English Test (OET)
  • Test of English as a Foreign Language internet-based test (TOEFL iBT)
  • Pearson Test of English (PTE) Academic test
  • Cambridge English: Advanced (CAE) test

Exemptions to the English language requirement will also be granted when an applicant can provide evidence of five cumulative (rather than consecutive) years of secondary or tertiary study in English.

Standard Business Sponsorship term

The term of a standard business sponsorship has been extended from 3 years to 5 years.

Start-up businesses will also benefit from an increase in the term of their standard business sponsorship from 12 months to 18 months, giving start-up businesses a greater grace period to establish operations in Australia.  Subclass 457 visas granted to employees of start-up businesses will also now be granted for 18 rather than 12 months.

Market salary exemption threshold

Employers will no longer be required to demonstrate that highly paid 457 applicants will be paid in line with the Australian market in cases where the visa holder will be paid in excess of $180,000 (down from $250,000).  This brings the threshold in line with the marginal tax rate.

The Temporary Skilled Migration Income Threshold (TSMIT) has also been fixed at $53,900.

Sponsor Reporting Timeframe

Employers must report any changes relating to the sponsored employee’s employment such as resignation or termination within 28 days (rather than 10 days).

For further information about our skilled work visa services, please click here. If you wish to discuss the changes to the 457 program and how this affects your business sponsorship or work visa, please contact us here.