RECENT s457 POLICY CHANGES Apr/May 2016

The Department of Immigration continually amends its policy advice as a result of legislative changes and other factors. Two recent changes that may directly affect many visa applicants and sponsoring businesses are outlined below:

1. USING 457 VISAS FOR ‘SELF SPONSORSHIP’ NO LONGER POSSIBLE

The use of the 457 program to effectively ‘self sponsor’ has been closed as a result of a change in policy detailed on 21 November 2015 with the following policy statement:

The intent of the 457 program is to enable Australian businesses to temporarily fill short term skill shortages with overseas workers when they cannot find a suitably qualified or experienced Australian citizen or permanent resident to fill the position. The program is not intended to be used for non-citizens to establish a business in Australia and self-sponsor themselves; there are other visa pathways available for such purposes.

2. CALCULATING THE GROSS PAYROLL FIGURE FOR s457 TRAINING BENCHMARKS – CONTRACTORS

The Department of immigration has recently issued the following amended advice regarding the calculation of the gross payroll figure for calculating the training benchmarks:

For the purposes of the training benchmarks, irrespective of whether they are included for payroll tax purposes or not, payments made to contractors or sub-contractors should be included as payroll expenditure if the contractor provides some labour services in fulfilling the requirements of the contract and the labour provided relates to the service provided by the applicant’s business (that is, the contractor is a bricklayer and the applicant is a construction company). 

Payments made to contractors, such as an accountant or a migration agent, who provide a service to the applicant that is not directly related to the service the applicant provides to its customers should not be included as payroll expenditure. If payments to contractors are included as payroll expenditure, any eligible training expenditure in respect of the contractors may also be counted towards meeting the benchmarks.