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Complicated training benchmarks scrapped for an annual fee

5/11/2017Entity Solutions

Tuesday night, the Federal Government announced changes to their fees when engaging a foreign worker on a Temporary Skill Shortage Visa (formally known as the 457 Visa). The most significant and positive impact this has on businesses sponsoring foreign workers, is the end of training benchmarks.

Instead, the Government has introduced an annual fee organisations will have to pay. Whilst these changes still need to be passed through Parliament, they are due to come into effect in March 2018. 

The end of training benchmark requirements

The sponsoring company will no longer be required to keep track of training expenditure. This means less time for businesses spent determining whether they meet the training requirements and then figuring out how to maintain and document them. “It will be easier to manage compliance and there will be less risk of not maintaining these responsibilities and obligations,” Says Grant Frankcombe, Migration Compliance Manager at Entity Solutions. The Government believes this will take the ‘guess work’ out of calculating this expenditure which was never an exact science. 

One of the big problems our clients have faced is being able to demonstrate the training requirements and the challenge resurfaces each time they make an application as it must be maintained and recorded each year. We anticipate that these changes will make it a little easier to prepare submissions and may result in quicker processing times.

Currently, it is a requirement that training needs to be spent on Australian workers as a percentage of payroll. With the establishment of the new Skilling Australians Fund, the percentage of payroll charge will no longer be applicable. Therefore, in many cases this will provide an easier way of meeting the training requirements when accessing skilled workers from overseas.

According to the Migration Institute of Australia (MIA): 

From March 2018, businesses with turnover of less than $10 million per year will be required to:

  • Make an upfront payment of $1,200 per visa per year for each employee on a Temporary Skill Shortage visa
  • A one-off payment of $3,000 for each employee being sponsored for a permanent Employer Nomination Scheme (subclass 186) visa or a permanent Regional Sponsored Migration Scheme (subclass 187) visa.

Businesses with turnover of $10 million or more per year will be required to:

  • Make an upfront payment of $1,800 per visa year for each employee on a Temporary Skill Shortage visa
  • A one-off payment of $5,000 for each employee being sponsored for a permanent Employer Nomination Scheme (subclass 186) visa or a permanent Regional Sponsored Migration Scheme (subclass 187) visa.

This may also provide more incentive to assist workers to move to a permanent visa once they have started work and are contributing well to the business and have made a commitment to remain in Australia permanently.

With the levy being introduced to permanent visas, those skilled workers currently sponsored and seeking to remain in Australia permanently should consider making an application before the changes are introduced in March 2018. 

In short, although the 2017 Budget has increased upfront payments, many businesses will find that they have reduced administrative costs and can spend less time managing, recording, and reporting spending on training for Australian staff solely for the purpose of meeting their sponsorship obligations.

Temporary Sponsored Parent visa

The MIA also provides an update on the Temporary Sponsored Parent Visa below:

The new temporary sponsored parent visa will be introduced in November 2017, with 15,000 visas to be made available annually. This visa will allow the temporary stay of sponsored parents in Australia for periods of up to three or five years. The visa may be renewed from outside Australia to allow a cumulative stay of up to ten years.

Temporary sponsored parent visa holders will not be eligible to apply onshore for a permanent parent visa. The visa holder’s sponsor, their Australian child, will have legal liability for any public health expenditure (including aged care arrangements) incurred by the visa holder in Australia.

The Department will undertake a review of this new visa at the end of the first program year.

* Existing contributory and non-contributory parent visas will remain unchanged and open to new applicants.

Permanent Migration programme

The permanent migration programme will remain at 190,000 places for the 2017-18 programme. This highlights the ongoing importance of the skilled migration programme to Australia and the economy.

Please do not hesitate to contact Entity Solutions’ registered Migration Agents on (03) 9600 0333 or via email at enquiries@entitysolutions.com.au, should you need any further guidance.


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