Changes to the 457 visa scheme

Lisa Qiu

Assisted by Holly Pitt

On 18 April, 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 of next year.

Until March 2018, employers can still sponsor overseas workers on a 457 visa. However, as of April 2017, the occupations available for sponsorship have been condensed from 651 to 435 occupations. 216 occupations have been removed from the list and access to 59 other occupations has been 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 laws). Occupations on STSOL can obtain 457 visas for up to two years only. For those who want to apply for permanent residency under the Direct Entry stream of the Employer Nomination Scheme (subclass 186) visa, they will only be able to do so if the occupation is on MLTSSL. 

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 further 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 will also mean the number of 457 workers who can utilise the 457 visa scheme as a pathway to permanent residency and Australian citizenship will  be drastically reduced.

The changes so far are 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 which have not yet been finalised:

The TSS Visa

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 only able to access critical skills from foreign workers on a temporary basis.

The TSS visa programme will be comprised of a Short-Term stream of up to two years and a Medium-Term stream of up to four years. It will focus on supporting businesses to address genuine skill shortages in their workforce and will contain a number of safeguards which prioritise Australian workers. 

Key reforms as published by the Department include:

The implementation of these reforms will begin immediately and will be completed in March 2018. 

If you would like to receive our regular legal updates, please subscribe here.  Should you have any questions about how these changes may impact your business, please contact: