Subclass 457 visa – Increase to Temporary Skilled Migration Income Threshold from 1 July 2010
September 9, 2010
From 14 September 2009 all sponsors of new Subclass 457 visa holders were required to adhere to new sponsorship requirements, one of which was the requirement to pay their Subclass 457 (s457) visa holders market salary rates (for employers with existing s457 visa employees this requirement would take effect from 1 January 2010).
As a part of the new remuneration requirement, Subclass 457 visas would not normally be approved if the market salary rate for the role was below the Temporary Skilled Migration Income Threshold (TSMIT). The TSMIT is indexed in line with the Australian Bureau of Statistics earnings data.
The Temporary Skilled Migration Income Threshold was increased by 5% on 1 July 2010 from $45,220 to $47,480. The purpose of the TSMIT is to ensure that all s457 visa holders are earning sufficient income to enable them to independently support themselves while they are in Australia. S457 visa holders do not have access to the range of government support that is available to Australian citizens and permanent residents.
Employers considering recruiting and sponsoring employees from overseas on an s457 visa should keep in mind that s457 visas will not be approved if the market salary rate is below the Temporary Skilled Migration Income Threshold. It is the market salary rate and not the proposed salary rate for the individual that is considered in the visa approval process. Even if an employer is proposing to pay a salary that is much higher than the market salary rate, if the actual market salary rate is below the TSMIT then the s457 visa will not be granted.
For example, if the market salary rate for an occupation is $45,500 (the market salary rate that is paid to an equivalent Australian in the employer's workplace) then the nomination would be refused as the salary is below the TSMIT. Even if the employer sponsor decided to offer the nominee employee a salary of $48,000, the application would still be refused as it is the market salary rate that the Department of Immigration compares to the TSMIT, not the actual salary proposed by the employer.
The market salary rate can be established with reference to the current industrial arrangements (applicable award, collective agreement, common law contract, etc) which apply to an Australian worker performing the same work in the same location. If there are no Australians in the workplace currently undertaking the work that an s457 visa employee has been recruited for, the employer can establish the market salary rate with reference to an applicable award or collective agreement. It is the employer’s responsibility to establish the relevant market salary rate which should be supported by evidentiary material.
For more information regarding the Temporary Skilled Migration Income Threshold and market salary rates please contact Edwina Kaupa.
