On 23 December the Minister for Immigration and Border Protection, Peter Dutton, announced the appointment of Mr John Azarias to conduct a review of the current Temporary Skilled Migration Income Threshold ('TSMIT') for the 457 visa programme. Mr Azarias was previously the Chair of the independent review panel which produced the 'Robust New Foundations' report on the 457 visa programme in 2014.
The TSMIT acts as a salary 'floor' for the 457 visa; where the market rate for a position is below the TSMIT the position is not considered highly skilled and cannot be nominated for a 457 visa. The TSMIT is designed to ensure that only skilled positions can be nominated for a 457 visa and that visa holders have sufficient income to reside in Australia without access to social security and other government benefits. The TSMIT does not include compulsory superannuation contributions.
The TSMIT has remained at $53,900 since 2013. Prior to this date the TSMIT had increased by approximately 4% each year since its inception. A similar increase would take the current TSMIT to approximately $56,000 per annum. The terms of the review include considering afresh the appropriate base TSMIT level, whether the TSMIT should be indexed and if so on what basis, as well as the role of regional concessions.
The report is due for submission to the Minister at the end of April 2016. The Minister has undertaken to retain the current TSMIT of $53,900 until the findings of the review are considered. No timeframe has been given for a response to the review.
If the TSMIT increases employers would only be able to nominate positions where the base salary is above the new figure. This risks increasing business costs and has the potential make a number of positions ineligible for the 457 visa. Employers should continue to monitor the situation to ensure they are aware of further changes to the sponsored visa system.
The review is expected to reconsider the fundamental principles informing the TSMIT to determine an appropriate base level. As such the outcome of the review is difficult to predict. It is unlikely however that the report will recommend the TSMIT be decreased given current cost of living pressures. If the report does recommend the TSMIT be increased this has the potential to make a number of lower paying positions ineligible for the 457 visa.
Employers should continue to monitor the situation to ensure they are aware of further changes to the sponsored visa system.
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