On 27 April 2023, the government made a significant announcement regarding expanded pathways to permanent residence for employer-sponsored temporary skilled visa holders. This development has been warmly welcomed by the business community. Before deciding to support permanent residence applications, employers should take into account several considerations and engage in careful planning to leverage these new opportunities effectively.
A recap of the changes
- The Temporary Residence Transition (TRT) stream of the Employer Nomination Scheme (subclass 186) visa will be available to Temporary Skill Shortage (TSS) visa holders whose employers wish to sponsor them.
- Applicants will need to continue to work in the occupation nominated on their TSS visa.
- Occupations eligible for TRT will not be limited to the Medium and Long-term Strategic Skills List (MLTSSL).
- Eligibility for the TRT stream will be reduced from 3 years to 2 years employment with the sponsoring employer.
- Applicants will need to meet all other nomination and visa requirements for the TRT stream of the Employer Nomination Scheme visa such as English, health and character requirements.
- There are no further updates such as changes to the age requirement.
Identifying Suitable Candidates
Employers should proactively identify suitable candidates among their existing temporary skilled visa holders who meet the eligibility requirements for permanent residence. Ajuria Lawyers is happy to assist with this process.
Who pays what – the legal requirement
When it comes to permanent residence through the Employer Sponsored Program (186 visa) employers have no obligation to cover any of the fees other than the Skilling Australians Levy (also known as the SAF). Some cautious employers also choose to pay the nomination fee of $540.
The SAF levy for employers with an annual turnover of less than $10 million is $3,000 per nomination. This amount increases to $5,000 per nomination for employers with an annual turnover of at least $10 million.
Who pays what – in practice
In practice and based on our experience, it is common for employers to provide support to employees during the permanent residency process. However, it is important to note that most employers do not typically cover all associated costs. If employers do choose to cover the costs of the permanent residency process, it is common for them to establish a claw-back arrangement. This arrangement stipulates that if the employee leaves the organisation within a specific period, typically around two years, the employer may seek reimbursement for the expenses incurred during the PR process (except for the SAF levy and nomination fee if they choose to cover it).
Fringe Benefits Tax
We strongly advise businesses seek taxation advice if covering fees as these may be subject to Fringe Benefits Tax.
Personal Tax advice
Lodgment of permanent residence applications can change the tax residence status of employees and they should be encouraged to seek their own taxation advice.
Engaging in Workforce Planning & permanent policy
With the expanded pathways to permanent residence, it becomes crucial for employers to engage in strategic workforce planning. Identify the key roles within your organisation that are currently filled by temporary skilled visa holders and evaluate your migration sponsorship policy, noting that the 186 permanent residence application involves offering the employee a position for at least 2 years going forward.
Communication and Transparency
Maintain open and transparent communication with your temporary skilled visa holders regarding the expanded pathways to permanent residence. Provide them with clear information about the process, eligibility criteria, and any support your organisation is willing to offer. We love running webinars so let us know if you want to do this tailored for your team.
Budgeting
Employers should budget these extra costs and and/or compare these to TSS applications forecast accordingly.
Navigating Compliance and Legal Obligations
As always, employers must be diligent in complying with all relevant compliance and legal obligations throughout the process of sponsoring employees.
Please contact your Ajuria advisor if you have any questions.
