AUSTRALIA – Recent Changes to the 457 Visa

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The Australian government has recently announced changes to some of the rules of the Subclass 457 Visa, including extended sponsorship periods, a reduced market salary threshold, an extended notification period and more flexible English language testing requirements.

The changes implement some of the recommendations of last year’s independent review of the 457 Visa, most of which have been accepted by the government

Business Sponsorship Terms

The period of standard business sponsorship has been extended from three to five years, and for start-up businesses the period has been extended from 12 to 18 months.

Market Salary Exemption Threshold

Applicants earning above A$180,000 (previously A$250,000) are now exempt from the requirement that their salary is in line with market salary rates. The threshold has been adjusted to match the threshold for the top rate of income tax.

Notification of Changes

The timeframe for approved business sponsors to notify the Department of Immigration and Border Protection (DIBP) of any changes in a 457 visa holder's work duties, or cessation of employment, has been extended from 10 days to 28 days. This change has been made to allow sufficient tim for compliance with the notification requirements, and to align with other comparable reporting periods that must be met by businesses.

English Language Testing

The government has slightly relaxed the English language requirement rules as follows:

• Applicants will now need to meet a minimum overall test score, with a lower minimum score than previously in each test component.
• Applicants will now be exempted from the test requirement If they can demonstrate five cumulative years of study in English at the secondary or tertiary levels, rather than five consecutive years as previously.
• The list of acceptable English language test providers has been expanded. In addition to the International English Language Testing System (IELTS) and the Occupational English Test (OET), acceptable tests now include:
  • Test of English as a Foreign Language – Internet-Based Test (TOEFL – IBT);
  • Pearson Test of English (PTE);
  • Cambridge English Advanced (CAE).
• The recommendation to extend the list of nationalities who are exempt from meeting the English language requirement has not been supported by the Australian government.

Action Items

• Companies sponsoring employees for 457 visas should adjust their planning to take into account the latest changes.
• Stay tuned for news of the implementation of further recommendations from last year’s report.