25 April 2017

AUSTRALIA: Subclass 457 visa will be replaced by Temporary Skill Shortage visa

Prime Minister Turnbull announced that the Subclass 457 Temporary Skilled Work visa will be abolished and replaced by a new more tightly controlled Temporary Skill Shortage visa stream.

19 April 2017:

The Skilled Occupation List (SOL) has been replaced by the Medium and Long-term Strategic Skill List (MLTSSL). 

  • For subclass visa 189, 485 and 489, the occupations currently listed on the SOL will remain available
  • For all other visas that use occupation lists, there will be 16 occupations removed from the MLTSSL

The Consolidated Sponsored Occupation List (CSOL) has been replaced by the Short-term Skilled Occupation List (STSOL).

  • 200 occupations have been removed from the CSOL in creating the STSOL, these removed occupations will affect visa subclasses 186, 457, 190 and 407.
  • 24 of the occupations listed on the STSOL will only be eligible for positions located in regional Australia (subclass 457 and 186) and for the state and territory nominated stream of the subclass 489. 

For 457 visa applications granted after 19 April, the validity of the visa will only be two years, regardless of the filing date of the application. In the event the occupation is also on the new MLTSSL, the granted visa will be valid for four years. Applicants with pending 457 visa applications whose occupation is no longer on the new lists can withdraw their application and apply for a refund.

1 July 2017: Additional changes are likely to be introduced including:

  • Police clearance certificates will be required for 457 visa applicants
  • Adjustment to eligible occupation list
  • Elimination of English language exemption for high-salary earners
  • Expansion of mandatory skill assessment for applicants
  • Minor changes to training benchmarks for 457 sponsors
  • New information fields on the 457 application form 

March 2018: The Temporary Skill Shortage visa will replace the Subclass 457 visa. The new visa will have shorter validity periods and will include labour market testing for Australian candidates before hiring a foreign candidate is possible. 

The Temporary Skill Shortage visa will include the following reforms:

  • Introduction of 2 years of working experience requirement in the occupation they will fill
  • Introduction of minimum market salary
  • Introduction of labour market testing (unless an international agreement applies)
  • Introduction of test for employers to ensure there is no discrimination against Australians
  • Introduction of mandatory penal clearance certificates (already effective 1 July 2017)
  • Introduction of English language testing requirement (unless exempt)
  • Authorities will strengthen the condition that employers must contribute to the training of Australian workers
  • Holders of two-year TSS visa only have the possibility of 1 renewal
  • Holders of four-year TSS visa can renew in-country and have a path to permanent residence after three years


Turnbull has stated that the migration system should work in the national interest and that Australian jobs are filled by Australians wherever possible. The revision of the visa program comes after ongoing calls for reform of the Subclass 457 visa program.

How does this affect the client?

The elimination of the Subclass 457 visa program will likely significantly narrow the eligibility criteria for companies recruiting foreign skilled workers. Processing times might be longer during the transition period due to the additional documents which will have to be included in the application. 

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