Visa Rule Changes – Information for Employers

The Australian government has made significant changes in the 2017-2018 budget, which will directly affect companies in Australia who sponsor foreign workers.

Introduction of the Skilling Australians Fund Levy

From March 2018, employers sponsoring foreign workers on certain skilled visas will be required to pay a Skilling Australians Fund Levy which will replace the current Training Benchmark arrangements. At this point, the government has said that this levy will apply to the new Temporary Skilled Shortage visa (TSS) , the Employer Nomination Scheme (ENS) and the Regional Sponsored Migration Scheme (RSMS). The amounts payable will be different for small and large businesses:

Small Businesses (under $10 million annual turnover)

  • TSS Visa – Upfront payment of $1200 per year (or part thereof) per employee on the TSS visa, so for instance an application for a 4 year (Medium Term Stream) TSS visa would attract a levy of $4800 and an 18 month TSS visa would attract a levy of $2400.
  • ENS and RSMS Visas – a one off payment of $3000 for each employee sponsored.

Large Businesses ($10 million or more annual turnover)

  • TSS Visa – Upfront payment of $1800 per year (or part thereof) per employee on the TSS visa.
  • ENS and RSMS Visas – a one off payment of $5000 for each employee sponsored.

It is currently not clear how employers who have a mix of 457 visa holders and TSS visa holders will be affected moving forward.

 Increases to the Visa Application Charges (VAC)

Visa application charges for the new Temporary Skills Shortage (TSS) visa will be:

  • $1150 per visa (primary applicant) for the short term stream
  • $2400 per visa (primary applicant) for the medium term stream

This is in comparison with the $1060 currently charged for a 457 primary applicant.

Fees for other visa subclasses will be increased as of the 1st of July – The government has announced that moving forward, fees will be indexed in line with the forecast Consumer Price Index (CPI)

Analysis

Overall the measures will discourage employment of foreign workers and are in line with other changes previously announced, which reduce the range of eligible occupations and tighten access to skilled visas. Specifically:

  • The Levy is paid to the government, rather than on training employees of the company itself (as in the current Training Benchmark arrangements) so is of less direct benefit to the sponsoring company.
  • As the Levy applies on a fixed fee basis rather than as a percentage of payroll, companies with a larger proportion of Australian workers and/or a low current training spend, in general, will be advantaged.
  • For companies who already spend on training it will increase overall costs.

 Recommendations

Companies who currently have workers on temporary skilled visas should consider moving eligible employees to permanent residence visas prior to the date of the introduction of the Levy, which is currently anticipated to be March 2018.

If you would like to discuss your company’s situation, or would like some assistance with forward planning, please CONTACT US or call +61 8 9429 8860 for a consultation.

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