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Review of the Migration System Report: What are the practical implications of the changes on 1 July 2023

The Australian migration system is on the verge of significant transformation, and the “Review of the Migration System Final Report” is at the heart of these changes. RCR Lawyers, your trusted legal advisors in Australia, is here to provide a comprehensive update on the upcoming alterations, their implications, and practical guidance for both employers and New Zealand citizens.

The Impact of the “Review of the Migration System Final Report” on Employers and New Zealand Citizens

The “Review of the Migration System Final Report” lays the foundation for a fresh approach to migration in Australia. While the report primarily comprises recommendations and is subject to further clarification, two pivotal changes will take effect on July 1, 2023.

 

TSMIT Increase to $70,000

The Temporary Skilled Migration Income Threshold (TSMIT) will rise to $70,000. Historically set at $53,900 and unchanged for over a decade, this change carries far-reaching consequences for employers and skilled workers. Not only will employers nominating new skilled workers be affected, but existing skilled workers facing visa expiry must also navigate these new requirements.

 

Permanent Residency Pathway for “Short-term” Stream TSS Visa Holders

For TSS visa holders working in positions classified under the Short-Term Skilled Occupation List (STSOL), the absence of a direct pathway to Australian permanent residency has been a significant challenge. The report proposes a new approach to address this issue, providing much-needed clarity for visa holders’ long-term prospects in Australia.

 

Implications for Employers: Navigating the Uncertainty

The “Review of the Migration System Final Report” introduces a degree of uncertainty, especially for employers. It is essential to understand how these changes may affect current and prospective sponsoring employers.

Unknown Territory

The most challenging aspect is the uncertainty surrounding the impact of the new TSMIT on lodged and pending applications post-July 1, 2023. The assessment of TSMIT is a “time of decision” criterion, which means that applications filed before the deadline will be subject to the new TSMIT provisions unless finalized before this date.

Complex Salary Requirement

Employers are now required to pay an overseas worker the “market salary rate,” which must be at or above TSMIT. This not only compels employers to pay an additional $10,000-$20,000 beyond the existing nominated salary but also potentially raises the salary of equivalent Australian employees. Regional employers, in particular, face unique challenges as their salary figures traditionally trend lower compared to metropolitan areas.

Tiered Approach

The “Review of the Migration System Final Report” suggests a tiered approach for assessing TSS applications in the future:

  • Tier 1: A ‘light touch’ high salary cohort, presumably above the Fair Work High Income Threshold amount.
  • Tier 2: A ‘mid-level’ cohort subject to the new TSMIT provisions.
  • Tier 3: A ‘lower-wage’ cohort in sectors with labor shortages and increased risk of exploitation. This tier may exempt TSMIT provisions.

These changes also affect permanent employer-sponsored visas (subclass 186).

Impact on Labor Market Testing (LMT)

The increase in TSMIT affects the Labor Market Testing (LMT) requirement, which was absent in 2013. LMT mandates that the proposed salary be published in the job advertisement, making it challenging to reconcile the advertised salary with the one offered to the visa candidate.

 

Practical Guidance for Employers

Given the uncertainty and potential complications in processing, it is advisable for employers to delay lodging new applications until after July 1, 2023, except in cases where LMT has already been completed and the application poses low risk.

For applications with proposed salaries below $70,000, employers have several options:

  • Lodge the application while acknowledging the post-July 1, 2023 risk.
  • Adjust the nominated salary to align with the new TSMIT, ideally staying below $70,001.
  • Wait for details of the changes to be released.

 

New Zealand Citizens: A New Path to Australian Citizenship

While not part of the “Review of the Migration System Final Report,” another change taking effect on July 1, 2023, directly benefits New Zealand citizens. This change grants a direct pathway to Australian citizenship for New Zealanders holding a Special Category (subclass 444) visa, including those who arrived in Australia after February 26, 2001.

Key Points:

  • All New Zealand citizens with a SCV will be considered permanent residents for citizenship purposes.
  • New Zealand citizens granted a SCV before July 1, 2022, will have their permanent residence period backdated to July 1, 2022.
  • New Zealand citizens granted a SCV on or after July 1, 2022, are considered permanent residents from the date of their SCV grant.

 

Partners/Spouses of New Zealand Citizens: A Silver Lining

Partners/spouses of New Zealand citizens holding a 5-year visa (subclass 461) face an important consideration when their New Zealand partner becomes an Australian citizen. In such cases, subclass 461 visa holders are no longer eligible for another subclass 461 visa, as they no longer meet the eligibility criterion of being in a relationship with a New Zealand SCV holder. However, this situation opens the door to partner visas, leading to permanent settlement in Australia.

 

Preparing for Change

The Australian migration landscape is evolving, and adaptability is key. Employers and New Zealand citizens must navigate these changes with care, seeking legal guidance when needed. RCR Lawyers remains at the forefront of these developments, ready to provide expert assistance in a shifting legal environment.

For any questions related to migration matters, please contact RCR Lawyers through our website, by email at [email protected], or by calling our offices. The number for RCR’s Brisbane office is  (07) 3009 8444 and the Sydney office is (02) 9307 8900.

The blog published by Rostron Carlyle Rojas is intended as general information only and is not legal advice on any subject matter. By viewing the blog posts, the reader understands there is no solicitor-client relationship between the reader and the blog published. The blog should not be used as a substitute for legal advice from a legal practitioner, and readers are urged to consult RCR on any legal queries concerning a specific situation.

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