On 22 May 2018, the Migration Amendment (Skilling Australians Fund) Bill 2018, and the Migration (Skilling Australians Fund) Charges Bill 2017 received royal assent.
On 6 August 2018 legislation was released confirming that the Skilling Australians Fund (SAF) levy will be effective from 12 August 2018.
SAF levy
Employer sponsored nomination applications lodged on or after 12 August 2018 must be accompanied by the SAF levy for:
- Temporary Skill Shortage (Subclass 482) (TSS) nominations;
- Employer Nomination Scheme (Subclass 186) (ENS) nominations; and
- Regional Sponsored Migration Scheme (Subclass 187 (RSMS) nominations.
The SAF levy varies depending on the business turnover. For TSS nominations, the levies are payable per visa per year, where ENS/RSMS nominations involve a one-off payment. The financial contributions are as outlined below:
Business Turnover |
TSS (per year, per visa) |
ENS / RSMS (one-off) |
| < $10 million | $1,200 | $3,000 |
| $10 million or more | $1,800 | $5,000 |
For example, a 4 year TSS visa application lodged by a company with turnover $10 million is required to make a SAF contribution of $7,200
Effect on business sponsors
The implementation of the SAF levy will affect approved sponsors in two ways going forward:
- pre-existing sponsors must retain evidence that they were meeting previous training requirements (e.g. Training Benchmark A o Training Benchmark B) for each full year of their sponsorship where the SAF arrangements were not in effect (e.g. Training Benchmark A or Training Benchmark B) until 12 August 2018
- the SAF levy will need to be paid upfront for all TSS/ENS/RSMS nominations lodged on or after the SAF commencement date (in addition to other usual charges).
Refunds of the levy
Refunds are generally not available for the Levy paid for TSS nominations, however it is possible under the following circumstances:
- the person withdraws the nomination application before a decision is made and the reason for withdrawal is because the information which led to the determination of the SAF levy was incorrect;
- a nomination in the Labour Agreement stream where the nomination is withdrawn before a work agreement is entered;
- nomination applications where the business sponsorship (SBS) application is refused or withdrawn before there is decision on the nomination application;
- nomination applications where the business sponsorship is approved, but the employee’s subsequent visa application is refused on character or health grounds;
- when an approved TSS 482 visa holder does not actually commence work with the sponsor.
- if the nomination was made on the basis of a mistake by immigration;
- if the nomination period was for more than 1 year and the nominee ceases employment within 1 year.
Refunds are generally not available for the levy paid for ENS nominations, however it is possible under the following circumstances:
- there is a mistake by immigration;
- a TSS nomination is lodged under the labour agreement stream and the person withdraws their application for approval before the position could not be nominated in the labour agreement or the number of positions in the labour agreement has been exceeded;
- the nomination is withdrawn before a decision and the reason is that the information used to determine the contribution charge in the nomination was incorrect;
- the nomination relates to a labour agreement and the person withdraws the application before a labour agreement is entered;
- the nomination relates to a TRTS application and is withdrawn because a mistake was made in identifying the occupation;
- the nomination is withdrawn before decision because the occupation was identified in the wrong stream;
- the nomination is approved but the visa is refused because of health or character requirements;
- the nomination is approved but the visa holder fails to commence in the nominated position;
- if the nomination period was for more than 1 year and the nominee ceases employment within 1 year.
Analysis
Since the announcement of the reforms, the number of 457 visa grants have decreased significantly. The implementation of the SAF levy and consequential increased costs are likely to further drive down visa applications.
The implementation of the SAF levies make the TSS largely accessible only to companies who have the financial means to sponsor staff onto visas, or who are desperate to fill skill shortages.
While Hannan Tew recognise the policy intentions behind the SAF levy, we remain cautious of the growing skill shortages that this leaves, particularly for companies who simply want to hire industry leading talent, or who are financially constricted in their ability to source highly skilled or experience foreign nationals (such as start-ups).
Next Steps
If you’re an approved business sponsor or a business seeking such approval and seeking clarification about these levies, we’d love to put your mind at ease. Contact us by email at [email protected] or phone +61 3 9016 0484 to obtain further guidance.
