Essential Skills Pathway

The Skills in Demand Visa is replacing the Temporary Skill Shortage (subclass 482) Visa.

The Skills in Demand visa will be replacing the Temporary Skilled Shortage (subclass 482) Visa with a three-tiered system for applicants based on their annual earnings and occupation.

Note: The Skills In Demand Visa (Essential Skills Pathway) will likely be open to apply for by the end of 2024.

Currently, when an employer wants to gain access to a temporary skilled migrant outside of the standard visa rules, including for migration below the TSMIT, they do so using labour agreements. There are currently more than 1,800 unique labour agreements in effect. Visa grants under labour agreements now make up approximately 5 percent of the temporary skilled migration system. Yet, many of these agreements do not contain the protections that would be expected in lower paid sectors and occupations ‘who are most at risk of exploitation and displacing Australian workers with similar skills’. This is a sign that the migration system is not working as intended.

The Government will further evaluate how to develop a third pathway, the Essential Skills Pathway—a more regulated pathway for lower paid workers with essential skills—in consultation with state and territory governments, unions, businesses and migrant workers. In defining essential skills, the Government may give consideration to sectors and occupations that are vital to supporting the living standards of Australians and where persistent shortages exist. Improvements in wages and conditions in such occupations, where they have occurred, have not proven sufficient to meet these labour shortages in the short term.

The Government is primarily considering the pathway in the context of the care and support economy, which has become essential to the quality of life of Australians. In doing so, the Government will maintain the primacy of our relationships with the Pacific as a guiding principle.

The Aged Care Industry Labour Agreement and the pathways for aged care workers through the PALM scheme will provide strong lessons for the Government, unions and employers for any future design of more regulated pathways for lower paid workers with essential skills. More than 20 Aged Care Industry Labour Agreements have been signed since its introduction in May 2023, which provides for up to 9,000 direct care workers over 5 years. We will look to examine lessons of these programs and their settings, through tripartite consultation, to inform the design of any new pathway.

This pathway would be distinct from the Core Skills Pathway and the Specialist Skills Pathway. These arrangements would be sector-specific, capped, embedded with stronger regulation and minimum standards and subject to further advice from Jobs and Skills Australia and its tripartite mechanisms. With this approach and these principles in mind, and acknowledging that there will always be a role in the system for labour agreements, the Government will evaluate existing labour agreements for below-TSMIT migration and will rewrite guidelines for future labour agreements to provide stronger worker protections. The Government will further consider how best to enshrine these guidelines in legislation.

Within sectors, the distinction between the Core Skills Pathway and Essential Skills Pathway could be defined by occupation and pay.

For example, in the care and support economy, Aged and Disabled Carers would have access via the Essential Skills Pathway, but most Registered Nurses or Allied Health Professionals would have access via the Core Skills Pathway. Both pathways, however, will be regulated to ensure that Australia is receiving the skilled workers it actually needs and the employees concerned are protected from exploitation.

The Government will further consult on how best to regulate migration for lower paid workers with essential skills in early to mid-2024.

The Government will index the new Core Skills and Specialist Skills Thresholds in line with annual movements in Average Weekly Ordinary Time Earnings. This indexation requirement will be specified in legislation to provide clarity and predictability for migrants and employers, as recommended in the Migration Review.

The Government has established a formal role for Jobs and Skills Australia in defining skills needs. Its approach will be evidence-based and draw on advice from tripartite mechanisms. Coordination of the education, training and migration systems will all feed into this process to ensure identified labour shortages are dealt with in a holistic manner.

The three-tiered system is planned as follows:

Tier 1 – Specialist Skills Pathway Tier 2 – Core Skills Pathway Tier 3 – Essential Skills Pathway
– No occupation list applicable, however trades workers, machine operators, drivers and labourers are excluded

– Requires guaranteed annual earnings of at least $135,000 which will be indexed annually

– Priority processing with a commitment to a 7-day median visa processing time

– A simpler and regularly updated Core Skills Occupation list managed by Jobs and Skills Australia

– Requires guaranteed annual earnings of at least $70,000 which will be indexed annually

– For occupations earning under $70,000 per year but working in essential skill occupations.

– Further assessment by the government is being undertaken on the best way to introduce this pathway

This pathway is likely to be sector-specific, with stronger regulatory framework, minimum standards and ongoing advice from Jobs and Skills Australia

Skilled in Demand Visa- Replacement of TSS 482 visa

As part of Australia’s new migration strategy, a new three tiered system of visa pathways (Skilled In Demand Visa) to replace the TSS SC 482.

  • The specialist skills visa pathway will not have an occupational list and a processing turnaround of 7 days.  Trades occupations, machinery operators, drivers and labourers will be excluded from this visa class. There will be 3,000 places allocated per year. The ‘specialist skills’ visa for those earning over $135,000 per year.
  • The core skills visas pathway are expected to provide the majority of visa for the program.  trades workers will be required to apply under this visa based on a revised ‘skills in demand list’ developed by Jobs and Skills Australia. The ‘core skills’ visa for the $70-135,000 cohort. Earnings to be at least TSMIT, currently set at $70,000, but to be indexed annually.
  • The details of the essential skills visa pathway are yet to be finally determined. This visa will involve union oversight, be capped and be restricted to specific sectors.  To date the aged care and disability sectors have been mentioned. The ‘essential skills’ visa is for those earning under $70,000

The visas will be granted for up to 4 years and visa holders will be able to change employers more easily and provide clear pathways to permanent residency.  The ‘TSMIT‘ will be indexed annually and a public register of employer sponsors to allow more ease with moving between employers.

Skilling Australians Fund

Consideration will be given to collecting the SAF in smaller increments over time in recognition of the greater freedom of visa holders to change employers.  A monthly or quarterly payment model will be explored.

Labour Market Testing

LMT is to be streamlined, although the only announcement so far is that the requirement to advertise on the Workforce Australia site will be abolished. The validity of advertising period will increase from 4 to 6 months.

LMT will be gradually phased out as Jobs and Skills Australia data on skills shortages improves and a Core Skilled Occupation List created as an alternative to LMT.

Key elements of the Skills in Demand visa include:
  • Time spent with any approved employer will count towards permanent residence requirements
  • Skills in Demand visa holders will have access to self-nominated independent permanent pathways, in addition to employer-sponsored pathways
  • The visa will provide for a 4-year stay for all streams
  • median processing time of 21 days
  • Skills in Demand Visa holders will have the ability to move between sponsors with an 180 day time period to find a new sponsor
  • Streamlined labour market testing (LMT) requirements will be introduced. The requirement to advertise on Workforce Australia has already been removed

Book a meeting for a commitment free briefing with our Registered Migration Agents in Melbourne to find more about your visa options.