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Employment and Migration Blog

Changes to the 457 Visa scheme

Posted by Lisa Qiu on 21 Apr 2017

Assisted by Holly Pitt

On 18 April, 2017 Prime Minister Malcolm Turnbull and Minister Peter Dutton announced that the 457 visa scheme will be abolished and replaced by a new Temporary Skill Shortage (TSS) visa by March 2018.

Until March 2018, employers are still able to sponsor overseas workers on a 457 visa. However, effective 19 April, 2017 the occupations available for sponsorship have been condensed from 651 to 435 occupations, with 216 occupations removed from the list and access to a further 59 other occupations restricted. 

Moreover, the occupations have been divided into two new lists - the Medium and Long-Term Strategic Skills List (MLTSSL), and the Short-term Skilled Occupation List (STSOL). Occupations on MLTSSL can obtain 457 visas for up to four years, and can apply for permanent residency after three years (changed from two years under the pre-19 April, 2017 laws). Occupations on STSOL can obtain 457 visas for up to two years only, and cannot apply for permanent residency if the visa applicant is applying under the Direct Entry stream of the Employer Nomination Scheme (subclass 186) permanent resident visa. For applicants who hold a 457 visa for at least 2 years and are applying under the Temporary Residence Transition stream of the ENS (subclass 186 visa) they will still be able to apply for permanent residency even if their occupation is on STSOL (assuming the Department does not make any changes that may affect the TRT stream of the ENS (subclass 186).  

This approach means that the number of skilled, workers who can apply directly for permanent residency will be drastically reduced and available to only those with highly skilled occupations listed on MLTSSL. If the Department chooses to make further changes and affect the TRT stream of the ENS (subclass 186), it would also mean the number of 457 workers who can utilise the 457 visa scheme as a pathway to permanent residency and Australian citizenship will also be drastically reduced. 

The changes so far are no doubt controversial given their somewhat retroactive application as many 457 visa applicants who currently have applications lodged but not yet processed by the Department, will be affected by the new rules. 

What happens to my current 457 visa application?

Those who have already obtained a 457 visa will not be affected by the recent changes and will be able to continue their stay in Australia under the terms of their current 457 visa.

For those who have lodged 457 visa applications with the Department of Immigration and Border Protection:

  • those with occupations listed on MLTSSL still have the opportunity to be granted a 457 visa for up to four years;
  • those with occupations on STSOL will likely only be granted a 457 visa for up to two years; and,
  • those whose occupation has been removed from the list of eligible occupations are encouraged by the Department to withdraw their visa applications and apply for a refund. 

Why the change?

The TSS visa will be a component of the Government’s plan to strengthen the quality of Australia’s temporary and permanent employer sponsored skilled migration programmes. The change is aimed at ensuring Australian workers are given the first priority for jobs, with businesses soon to be only able to temporarily access critical skills from foreign workers.

*This blog was updated on 3 May 2017*

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