TSMIT review a call to action for certain business sponsors

Mr John Azarias – Chair of the most recent review into the 457 visa programme – was appointed in December 2015 to undertake an evidence based review of the Temporary Skilled Migration Income Threshold (TSMIT). The TSMIT (the ‘market salary’ benchmark beneath which a subclass 457 nomination will be refused) has been effectively frozen at $53,900 since July 2013.

Stakeholder submissions have now been collected in connection with the review, and the report is due to be tendered to the Minister in April. Whilst specific outcomes are difficult to predict, these may include a tiered TSMIT based on regional areas and/or industry sector. However, it is almost certain that the moratorium on indexing the TSMIT will come to an end, and take effect from as early as July 2016.

An increase to the TSMIT will render some roles ineligible for sponsorship if the market rate for that occupation is below the new TSMIT. Should the TSMIT be increased and pegged to the All Employees Average Weekly Total Earnings, recent ABS data would suggest that the new threshold could be around $59,540.

Nominations for roles in skilled, but traditionally lower paid sectors such as nursing and hospitality would be impacted most by the change, as would roles paying a commissionable component from a low base rate of pay.

Call to action

Under law, the applicable TSMIT governing market rates is the threshold in place at the time the nomination application is approved. This means that depending on timing, an application with a ‘marginal’ annual earnings may be invalidated if the TSMIT increases between lodgement and finalisation. At present, the DIBP’s published service standard for processing such applications is up to 3 months.

Sponsors who are potentially affected by the changes can take steps to insure against an increase by bringing forward lodgement of a genuine nomination application and effectively preserving the lower TSMIT for up to 12 months (the standard validity period of a subclass 457 nomination application). An associated subclass 457 visa application can be subsequently lodged against the approved nomination at any time during its validity period.

Timing, and meticulous preparation are crucial components to this strategy, and should be discussed with us, or your current qualified immigration professional.

FCB Smart Visa will continue to provide updates on new migration legislation as it becomes available. If you have any migration matters that you would like to discuss, please call one of our migration agents on 02 9922 5188.