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Employer Nomination Scheme (ENS) and Regional Sponsored Migration Scheme (RSMS) visas will be changing significantly from 1 July 2012.

An important part of the changes are new objective tests for exceptions to the age and skill requirement.

Age Exemptions

The maximum age for RSMS and ENS applications from 1 July 2012 is 49.

However, this requirement can be waived for:

• Ministers of Religion who are nominated by a religious institution
• Researchers and technical specialists nominated by Australian government agencies
• Senior Academics nominated by an Australian university (Lecturer or Faculty Head)
• People who have worked for their nominating employer on a 457 for the last 4 years and who are paid at least the Fair Work High Income Threshold (currently $118,000) for each of these years

These changes are particularly significant as under the pre-1 July ENS and RSMS subclasses, the maximum age is 44, with exemptions possible up to the age of 60.

Applicants over the age of 60 would be able to apply under the new system, providing they meet one of the above exemptions.

Skill Exemption

Applicants for the Direct Entry stream of ENS need to pass skills assessment and show that they have worked in their occupation for at least 3 years to qualify. Direct entry applicants for RSMS may also need to pass a skills assessment, particularly if they work in a trade occupation.

Exemptions will apply for:

• Ministers of Religion who are nominated by a religious institution
• Researchers and technical specialists nominated by Australian government agencies
• Academics nominated by an Australian university (can include University Tutors, as well as Lecturers and Faculty Heads)
• People with earnings at the Australian Tax Office top individual income tax rate (currently $180,000)
• New Zealand citizens or NZ Citizen Family Relationship visa holders (Subclass 444 or 461) who have worked for their employer in their occupation for 2 of the last 3 years (excluding periods of unpaid leave

The minimum salary level for the skill exemption is significantly lower than expected – $180,000 rather than $250,000.

The exemption for NZ citizens is also new – New Zealanders and their family members now have an option to obtain an ENS or RSMS visa without needing to undergo skills assessment.

Note also that the range of university academics is also wider than for the Age exemption – university tutors are exempt from skills assessment, but would need to meet the age limit of 49.

Feel free to contact us if you would like more details on applying for Australian permanent residence.

Updated 21 May 2012

More details are now available on the timing of the changes to LAFHA (Living Away from Home Allowance).

According to the Treasury Exposure Draft for the new LAFHA legislation to apply from 1 July 2012, it appears that most temporary residents will not be able to continue claiming LAFHA after 1 July.

In the initial Budget announcement, it appeared that people who had claimed prior to 8 May 2012 would be able to continue claiming LAFHA until 1 July 2014 under special transitional arrangements.

The draft legislation appears to only allow temporary residents to claim LAFHA after 1 July 2012 if they maintain a second residence in Australia, from which they are living away from home.

References

William Buck, a firm of Chartered Accountants who gives advice on LAFHA, has released an article on the LAFHA changes which explains in more depth how the rules will apply.

Treasury Exposure Draft for the new LAFHA legislation

Original Article

As part of this week’s Commonwealth Budget, the Australian Government has announced a major concession for people currently claiming the Living Away From Home Allowance (LAFHA).

The government had previously announced that the LAFHA would be closed to most temporary visa holders from 1 July 2012.

However, this week’s announcement effectively preserves the status of people currently claiming LAFHA until 1 July 2014. This concession applies to people who were claiming LAFHA prior to 7:30 AEST on 8 May 2012.

People not eligible for the concession will no longer be able to claim LAFHA unless they have a second home already in Australia, from which they are living away. In this case, LAFHA can only be claimed for a maximum of 12 months.

Concessions for “fly in, fly out” employees will continue, as will the current tax treatment of travel and meal allowances for short periods of travel (up to 21 days).

The announcement will be a major relief to 457 holders currently claiming LAFHA and their employers. Whilst we are still awaiting release of the legislation, employees already claiming LAFHA prior to the Budget announcement will be able to continue to do so until 1 July 2014.

Feel free to contact us if you have any questions about obtaining 457 visas for your employees.

References:

Commmonwealth Budget Papers – Revenue Measures

The Australian Federal Opposition leader, Tony Abbott, has supported the use of 457 visas as the mainstay of the Australian immigration program. The comments were made in an address to the Institute of Public Affairs, Melbourne.

Mr Abbott has called 457 holders the “best possible immigrants to Australia”, saying that they make a contribution from day one, and are immersed in the Australian way of life.

Mr Abbott was critical of the current Labour Government’s changes to the 457 program, saying that they had progressively made it more difficult for businesses to bring in 457 holders, mainly in response to union concerns.

Mr Abbott’s comments have provoked an immediate response from the CFEMU – one of the largest trade unions in Australia. The CFMEU National Secretary Construction Dave Noonan said that under the former Liberal Government, there was widespread abuse of the 457 program by employers to “lower wages and conditions and reduce safety, sack Australian workers and replace them with 457s, ignore qualified Australian workers and turn their backs on their responsibility to train young Australians”.

The CFEMU referred to the 2008 Deegan Report into the 457 program which resulted in reforms which “cleaned up some of the worst excesses of the 457 program”. The employer abuses mentioned in the Deegan Report, such as people trafficking, non-payment of superannuation and other breaches of employment law were already illegal under the previous system, and the jury is still out on what the effect of the 2009 Deegan Report changes has been.

The Deegan Report changes have certainly made it more difficult for small employers and foreign companies seeking to introduce new technology to Australia. Larger established employers in Australia have been impacted to a lesser degree.

By far the most significant restriction on the 457 program is the introduction of compulsory skills assessment and English testing for many trade workers. This adds months to the process and approximately $2,500 in cost.

Unions are not in favour of undue reliance on 457s because they put downward pressure on wages which could potentially affect Australian workers. Employees on 457 visas are reliant on continued employment to maintain their status in Australia, resulting in a possible power imbalance between employee and employer. Unions prefer permanent employer sponsored visas as in most cases, permanent visa holders can remain in Australia even without continued employment and so have more negotiating power.

Employers find 457s useful as they allow them access to the skills they need in their businesses and are relatively quick to process. Permanent employer sponsored visas take a long time to prepare as they require full medicals and police clearances, and in many cases a formal skills assessment. Most permanent employer sponsored applicants already hold a 457 visa.

For large-scale resource projects, many thousands of employees will be required for limited periods of time and the 457 visa would in most cases be best solution to meeting these requirements. The cost to the Australian economy of not having sufficient workers for these projects to proceed would be significant.

It is not clear what reforms Tony Abbott is proposing, but his intent to make the process easier for employers is clear.

The Federal Budget will be handed down on Tuesday 9 May, and there are likely to be announcements about changes to immigration settings. It seems likely that there will be further reforms to the 457 program and we will post an update when the details are available.

References

Tony Abbott’s address to the Institute of Public Affairs, Melbourne

CFMEU’s response to Mr Abbott’s comments

The Department has recently made changes to their policy in assessing the training benchmark for 457 Standard Business Sponsors.

Most employers seeking to sponsor for the 457 program would need to be approved as a Standard Business Sponsor.

An important part of this approval is to demonstrate that the business meets a training benchmark – either spending 1% of payroll on training or contributing 2% of payroll to an eligible training fund.

It is also important to realise that 457 sponsors need to meet the training benchmark each financial year on an ongoing basis after approval, otherwise they can have their sponsorship approval cancelled.

The changes clarify the Department of Immigration’s criteria in assessing the training benchmarks compared to the previous policy document.

Some of the significant changes are as follows:

1. Up to 40% of training can be for business owners or directors. Previously, training only provided to such persons could not count towards the training benchmark.
2. Reasonable and necessary costs to attend training – eg travel, facility/equipment hire, printing of training material – can be counted towards the training benchmark.
3. The cost of attending conferences, trade shows and expos can be counted, but there needs to be clear evidence of the associated professional development opportunity. This would typically involve providing details of training seminars attended by employees at such events.
4. Membership fees for professional bodies can be counted where this includes training opportunities. In this case, the proportion of fees attributable to training can be counted.
5. Salaries for Apprentices, registered trainees and recent graduates can count towards the training benchmark. In the case of recent graduates, people undertaking a structured program who are less than 2 years out of university can potentially have their entire salaries counted as training expenditure.

Feel free to contact us if you would like to discuss meeting the training benchmark to sponsor for 457 visas.

The changes coming in on 1 July 2012 to the permanent employer sponsored visas (ENS and RSMS) are quite significant.

Today, we’ll go through the Losers – people who will be worse off under the changes. Unfortunately there seem to be a lot more losers than winners under the new arrangements!

1. People Working in Australia on Temporary Visas Other than 457

Under the current provisions, you can qualify for an ENS visa if you have worked in Australia for 2 years on the following temporary visas:

• NZ Citizen (Special Category Subclass 444)
• Family Members of NZ Citizens (NZ Citizen Family Relationship Subclass 461)
• Religious Workers (Subclass 428)
• Sportspeople (Subclass 421)

However, under the new system, such applicants will need to apply through the “Direct Entry” pathway. This will involve applying for skills assessment and showing at least 3 years of work experience in the nominated occupation.

The biggest impact will be felt by NZ citizens and their family members – if their formal qualifications are not sufficient to pass skills assessment, their best course of action may be to move onto a 457 visa to facilitate an ENS application. As the 457 visa is less favourable than the usual NZ citizen visa, this would be a strange outcome.

2. 457 Holders Who Swap Employers

Under the current provisions, you can qualify for an ENS visa once you have held a 457 visa and worked in your occupation:

• For the last 2 years; and
• For the last 12 months with your nominating employer.

To qualify for the concessional Temporary Residence Transition stream from 1 July 2012, you must have worked for your nominating employer for the last 2 years on a 457 visa.

So people who have changed employers regularly and who were relying on the current “12 months with current employer” pathway may no longer be eligible for ENS.

3. People with Poor English

The current English language requirements for ENS and RSMS visas are:

• ENS: 5 minimum in each of the 4 components of IELTS (Vocational); and
• RSMS: 4.5 average in IELTS or equivalent (Functional)

Under the new system, the minimum for Temporary Residence Transitional Applicants will be 5 minimum, and for Direct Entrants 6 minimum for both RSMS and ENS.

As a result, the English language requirement will be much higher for RSMS – 4.5 average to potentially 6 minimum for direct entrants. Currently, many RSMS applicants don’t even need to do IELTS testing as they hold qualifications taught in English medium.

In addition, the waiver provisions for English language will be much tighter under the new system, and will be limited to:

• People in certain occupations (eg Ministers of Religion and Research Scientists)
• 457 holders who have studied for 5 consecutive years at secondary or higher level in English medium

4. ENS Employers with Poor Training Records

Currently, the training requirement for ENS is actually lower than the requirement for 457 visas.

457 visas are subject to an objective test, namely:

• 1% of payroll spent on formal training each financial year; or
• 2% of payroll paid into a training fund

Generally, this must be demonstrated by providing invoices for training, or alternatively evidence of formal traineeships. On the job training can be counted for ENS under the current system, but not for 457.

As a result, employers looking at sponsoring for ENS may need to increase their spend on formal training activities.

5. People Requiring Work Experience Waivers for ENS

Under the current system it is possible for a wide range of applicants to get a waiver of the 3-year work experience requirement for ENS. These include:

• International Students who have recently completed studies in Australia
• People who have applied for a general skilled (points tested) visa

There are only limited circumstances where a work experience waiver will be possible under the new system, namely:

• People in certain occupations (eg Ministers of Religion and Research Scientists)
• High salary earners ($250,000 base salary)

6. Applicants for RSMS in Trade Occupations

Currently, RSMS applicants do not require skills assessments.

However, in the new system, applicants in trade occupations (eg cooks, hairdressers, electricians, carpenters) may need to do a skills assessment through TRA to qualify for an RSMS visa.

Exceptions would include:

• People with Australian qualifications at AQF III level or higher;
• People who have worked for their employer for the last 2 years on a 457 visa

7. People Sponsored for 457 under a Labour Agreement

Currently, people sponsored for a 457 under a labour agreement are able to apply for an ENS or RSMS visa in the same way as any other 457 visa holder.

However, under the new system, such applicants will not be able to apply under the concessional Temporary Residence Transition stream like other 457 holders. They will instead need to apply through either the:

• Agreement Stream: in which case, the Labour Agreement would need to make specific provision for sponsorship for permanent visas; or
• Direct Entry Stream: which will require skills assessment plus three years of work experience

Conclusion

The changes to the Permanent Sponsored Entry visas will be quite comprehensive. Many applicants will be better off under the current ENS/RSMS program and should consider lodging their application for permanent residence prior to 1 July 2012.

Please contact us for a consultation if you would like to know how the changes will impact you.

You can call us on 02 9230 0888 to set up a time for a consultation, or make an email inquiry through our website.

Family members can obtain NZ Citizen Family Relation Subclass 461 visas, which also give full work rights even if the family member is not an NZ citizen.

However, there are many advantages to obtaining Australian permanent residence, including:

1. Full Access to the free Australian health system – Medicare
2. Full Access to Australian social security benefits
3. Access to FEE-HELP student loans for higher education
4. Possibility of becoming an Australian citizen, giving a right to always return to Australia

Many New Zealanders working in Australia are actually eligible for permanent residence through the Employer Nomination Scheme (ENS) visa.

Under current ENS regulations, both the Special Category Subclass 444 visa, and the NZ Citizen Family Relation Subclass 461 visa are qualifying visas for streamlined processing. NZ Citizens or family members need to work in Australia for 2 years to qualify for an ENS visa, and would need to be sponsored by an employer to get their permanent residence.

The ENS visa is currently one of the highest priority visas in the Australian migration program, and many people can obtain permanent residence within a month or two of lodging their applications.

However, the ENS program will change from 1 July 2012. Neither the 444 nor the 461 will be qualifying visas for streamlined processing, and this will mean that New Zealanders will find it much more difficult to qualify for migration to Australia.

If they want to apply for ENS after 1 July, New Zealanders will in most cases need to pass a formal skills assessment and show 3 years of work experience in their occupation to qualify. This means higher costs, delays and quite possibly many New Zealanders without formal university or trade qualifications missing out on permanent residence.

More information on the changes is available on Acacia’s website and on the Australian Department of Immigration website.

If you would like to discuss your situation, please contact Acacia urgently on 02 9230 0888 to set up a consultation.

The changes to the permanent employer sponsored visas (ENS and RSMS) coming in on 1 July 2012 are quite significant.

People will be affected differently by the new changes depending on their circumstances. This article goes through the main winners – and losers – under the new system.

This is the first part of a two-article series, and in today’s article we cover the people who will be better off under the new system – the Winners!

ENS/RSMS Eligibility Streams

The requirements for ENS and RSMS vary depending on which “eligibility stream” you apply under from 1 July. To appreciate the impact of the changes, it’s important to have an understanding of the eligibility streams:

1. Temporary Residence Transition: where applicants have worked with the employer on a 457 visa for the last 2 years. Applicants in this category have a streamlined pathway onto permanent residence through ENS and RSMS from 1 July.
2. Direct Entry Stream: for applicants who have not worked in Australia, or who have worked in Australia on a visa other than a 457 visa. Criteria for these applicants are higher – for ENS they must have a skills assessment and 3 years of work experience in their occupation, and RSMS applicants must get approval from a Regional Certifying Body and may also require skills assessment.
3. Agreement Stream: for applicants whose employer has a Labour Agreement. Labour agreements are special arrangements individually negotiated with the Department of Immigration, and allow sponsorship in a wider range of occupations and are required for the “on-hire” or “labur hire” industry.

Now – onto the winners:

1. People on 457 visas in non-ENS occupations

There are many people on 457 visas who have been sponsored in an occupation which is not on the current ENS Occupations List.

Examples of such occupations include:

• Cafe or Restaurant Manager
• Customer Service Managers
• Various IT specialisations
• Intermediate service managers (eg
• Divers and Diving Instructors
• Farmers

People sponsored for 457 visas in these occupations are currently on a “road to nowhere” – they can stay in Australia on 457 visas, but have limited options in applying for permanent residence.

From 1 July 2012, there will be a single consolidated list of occupations which applies to 457, ENS and State/Territory Sponsored Skilled Visas.

As a result, people already on a 457 visa will be able to look at an ENS visa once they have worked with their employer on a 457 visa in their occupation for 2 years, even if their occupation is not on the current ENS list.

2. Applicants between 45 and 50 years of Age

The age limit for ENS and RSMS visas will increase from 45 to 50 from 1 July 2012.

As a result, applicants between 45 and 50 will be able to qualify for an ENS or RSMS visa without needing to show Exceptional Circumstances.

3. Applicants over 60 years on 457 visas

Under current arrangements, it is extremely difficult for applicants aged over 60 to obtain an ENS or RSMS visa. Under current DIAC policy, applicants must show that they will make a significant economic contribution to Australia and have a very high salary level ($213,000 or more).

From 1 July 2012, applicants who have worked for their employer for the last 4 years on a 457 visa and who have a salary of over $118,000 should be eligible for an exemption to the age requirement.

This will make it far more possible for applicants over 60 to qualify for migration under the Employer Nomination Scheme.

Conclusion

One of the main intentions behind the changes to the ENS/RSMS programs is to streamline the process of applying for permanent residence whilst holding a 457 visa.

Next week we will be covering the “losers” – the people who are better off under the current system, and will be disadvantaged by the changes.