TSMIT and New PR Pathways | Q&A’s with Interstaff
Significant changes in skilled migration were announced by the Home Affairs Minister Clare O’Neil last month, such as an increase in the TSMIT (Temporary Skilled Migration Threshold) minimum salary for employer sponsored visa holders and new PR pathways, but what are the nuances for businesses and visa holders?
To help you understand the impact of the changes, here’s some of our frequently asked questions:
- New TSMIT minimum salary requirements for employer-sponsored visa holders
- Does the new TSMIT apply to existing visa holders?
- What about employees that earn less than the new TSMIT of $70,000 and need their visa renewed after 1 July 2023?
- What about the impact of increasing the TSMIT on the hospitality and retail industries?
- New PR pathways
- How have PR pathways changed for Subclass 482 TSS Visa Holders?
- What if I have employees who have already applied for a PR pathway through the Subclass 494 Regional Visa – should they apply for the new PR pathway?
TSMIT / Minimum Salary Increase – Impacts for Employees
As previously announced, the TSMIT will increase from AUD$53,900 to AUD$70,000 from 1 July 2023 – this is what the figure would have been if it was indexed to wage growth instead of frozen at the 2013 rate.
To explore the impacts of changing the TSMIT, it’s important to understand how it applies:
- The TSMIT is a minimum salary that a business must pay when sponsoring a Subclass 482 (Temporary Skills Shortage/TSS), 186 or 187 (Permanent) Visa holder for work in Australia.
- It does not include non-monetary benefits such as accommodation or a car.
Nomination applications from 1 July 2023 will need to meet the new TSMIT of $70,000 or the Annual Market Salary Rate (AMSR), whichever is higher.
The AMSR is the rate paid to an Australian worker for doing the same work in the same location.
Does the new TSMIT apply to existing visa holders or just new applicants?
The new TSMIT will apply to any nomination applications lodged from 1 July 2023 onwards and nominations lodged before this date will not be affected. Businesses will therefore need to assess if the increase in the TSMIT from $53,900 to $70,000 per annum will affect any employer-sponsored visa holders they plan to engage in coming months.
The change will not affect existing visa holders, however workers whose visas are expiring and require a renewal after 1 July 2023 will need to meet the new TSMIT as part of their new nomination application.
What if my employer-sponsored visa expires after 1 July 2023? | Impact on Visa Renewals
Workers whose visas are expiring and who require a renewal after 1 July 2023 will need to meet the new TSMIT of $70,000 to be nominated for a further Subclass 482 TSS Visa or for PR through a Subclass 186 or 187 Visa.
Businesses with sponsored visa holders earning less than $70,000 will need to consider these impacts. On 27 April 2023, Journalist John Kehoe put the question to Home Affairs Minister, Clare O’Neil at the National Press Conference:
JOHN KEHOE: …… what will happen to the people earning around $53,900? Are they going to have to get a nice big $16,000 pay rise to stay here or there’s some sort of grandfathering arrangement for them?
CLARE O’NEIL: Yep. So the grandfathering arrangement will be when their visa expires and they have to apply for a new visa and that visa will have an income threshold of $70,000.
Which industries will be impacted most by the TSMIT change?
The hospitality and retail industries are likely to be impacted most by the increase, due to the proportion of businesses in these industries that may be required to pay higher salaries to renew their existing workers’ visas and sponsor new overseas workers in the future.
- Around 21,000 migrants on Subclass 482 TSS Visas earn between $53,900 and $70,000 and will need to leave Australia if their employer does not raise their salary to above $70,000 to renew their visa when their current one visa expires. According to research by The Grattan Institute, this cohort is largely comprised of cooks, chefs, retail and hospitality managers, and some automotive and construction trades.
- Around 90 per cent of Subclass 482 TSS Visa holders working in the accommodation and food services industry, as well as over 50 per cent of Subclass 482 TSS Visa holders in the retail trade sector currently earn below $70,000.
- Australian Industry Group chief executive, Innes Willox claimed the increased TSMIT may also be difficult for agricultural businesses to absorb.
New PR Pathway for 482 Visa Short Term Stream Visa Holders
Last month, the Home Affairs Minister also announced that:
- A pathway to Permanent Residence (PR) through the Subclass 186 Temporary Residence Transitional (TRT) Stream Visa will be available to all Subclass 482 TSS Visa Holders by the end of 2023. This will only require two years of living and working in Australia before applying for PR rather than three years.
- Subclass 482 TSS Visa Holders in the Short Term Stream will no longer be limited to a maximum of two visas onshore.
These announcements are significant because since the government split the employer-sponsored visa program into two streams – the Short Term and Long Term stream in 2018, Subclass 482 TSS Visa holders on the Short Term list have had limited pathways to PR.
Some had been eligible for a pathway by applying for the Subclass 494 Regional Visa and then the Subclass 191 Visa, but this required them to live and work in a regional area for three years before becoming eligible to apply for PR.
How have PR options changed for Subclass 482 TSS Visa Holders?
Businesses with employees on the Subclass 482 Short Term stream should now consider PR options through the 186 TRT Visa as it is a shorter pathway (two years) and does not require a skills assessment.
Applicants will need to continue to work in the occupation nominated for their 482 TSS visa(s) and meet all other requirements for the 186 TRT Visa.
What if my employees have already applied for a Subclass 494 Visa? Is the new PR pathway available to them?
Subclass 494 Visa holders are subject to various conditions, including limitations to the visas they can apply for. They cannot apply for PR through a Subclass 186 Visa unless they have held a 494 Visa for at least three years, but by this time they may have already become eligible for a PR pathway through the 191 Visa. At this stage, no announcements have been made about changes to PR pathways for Subclass 494 Visa holders.
Employees that have not yet lodged a Subclass 494 Visa may instead wish to apply for a Subclass 482 TSS Visa to follow a shorter pathway to a 186 TRT Visa after two years. Our migration agents at Interstaff can assess their circumstances and clarify if they are eligible.
TSMIT and New PR Pathways
We hope this information about the TSMIT and new PR pathways was helpful. For further information on these changes, you may be interested in our articles below:
As always, if you require professional visa or migration advice, we encourage you to call Interstaff’s Migration Agents on 08 9221 3388 (Perth) or 02 7200 2567 (Sydney) or 03 8319 0902 (Melbourne) or +61 8 9221 3388 (International) or get in touch here if you have further questions.
You may also wish to connect with us on LinkedIn to keep up-to-date on these changes.