AUSTRALIA: Changes to the Subclass 457 Visa Programme following Independent Review

In September 2014, the Department of Immigration in Australia released a long-awaited Independent Review into the Integrity in the Subclass 457 programme. Subclass 457 is used to fill job roles with temporary skilled migrants where there are skills shortages.

The Australian Government has now provided a response to the Report and has accepted almost all of the recommendations. It has also indicated that the majority of changes should be implemented by the end of 2015-16.

The changes will start to be implemented within the next 6 months and include:

Salary Level

The current minimum salary level to apply for this visa category will be maintained at $53,900 for the next few years.

However, 457 visa holders must also be paid at the applicable “market rate” which depends on the occupation and location of the employee. This is unless the base salary is over $250,000. For employees to be paid above $250,000, no evidence is required to establish that the employee is being paid at the market rate.

The exemption from the need to demonstrate the market rate will be aligned with the income level above which the top marginal tax rate is paid, currently $180,000. Therefore, the minimum salary for waiver of the market rate salary requirements will be reduced from $250,000 to $180,000

Applying for Permanent Residence through ENS and RSMS

Holders of 457 visas who have worked with their sponsoring employer for the last 2 years may be eligible for permanent residence through the Temporary Residence Transition Stream of the Employer Nomination Scheme (ENS) and Regional Sponsored Migration Scheme (RSMS) visas.

However, the employee must have held their 457 for 2 years and also have spent those 2 years working for the same employer in the same position to be eligible.

The change that has been proposed will allow employees to qualify for Permanent Residence, providing they have held a 457 for the last 2 years, and worked with their current employer for the last 12 months.

English Requirement

457 visa applicants currently require a score of at least 5 in each band of IELTS (Vocational English). This requirement will change to state that an average band score of 5 will be accepted, providing the applicant has attained at least 4.5 in each band.

There is also currently an exemption from English language testing if the 457 applicant has studied a University Course for 5 years continuously in English. One of the changes that is to be enforced means that the exemption will allow for a cumulative period of 5 years of study, rather than requiring continuous study.

Business Sponsorship

Employers must be approved as a business sponsor before they can sponsor staff under the 457 program. Under the current regulations, employers are approved for a period of 3 years, during which they can sponsor staff for 457 visas. If the business has been operating for less than 12 months, the sponsorship approval will be valid for only 12 months.

One of the changes that will be enforced, following the Report, will be that the validity period for sponsorship approvals be increased to 5 years or 18 months for recently established businesses.


Full details of how the recommended changes will be implemented are yet to be made available by the Department of Immigration. However, the changes will make the system fairer and more accessible, not just for new applicants of 457 visas, but also those who have been resident and wish to apply for Permanent Residency. Sponsors’ obligations to renew their sponsorships will also be less onerous and less frequent, thereby saving money and time, which will in turn improve the government’s own operational efficiency. 

If you require assistance or advice on any of the points mentioned in this article, please contact us.  

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