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457 visa salary threshold (TSMIT) increase

Every year, the Temporary Skilled Migration Income Threshold – or TSMIT – is adjusted in accordance with the latest Australian Bureau of Statistics (ABS) figures on average weekly earnings (AWE), which ensures that this threshold keeps up with fluctuations in Australian salaries across the board.

During the previous 2011-12 financial year, the TSMIT was $49,330 – but with the most recent AWE data showing an increase of 4.2 per cent, the TSMIT has been increased to $51,400 as of July 1 2012.

The TSMIT serves two important functions

(1)    It ensures that the 457 visa program is utilised by employers seeking skilled, experienced workers rather than entry-level roles, and

(2)    It also offers added financial support for temporary migrant workers who often do not have access to government support and benefits.

It also ensures that temporary migrants receive the same working conditions and rates of pay as their Australian counterparts – and takes into account both the work that is to be carried out and the location of the role.

English language proficiency requirements can also be waived under the 457 visa program if an employee’s salary is above a certain exemption point. In 2011, this figure was $88,410, but for 2012, this has increased in line with the same 4.2 per cent rise to total $92,000.

However, employers need to bear in mind that the TSMIT and the exemption threshold are only very basic guidelines that regulate the minimum standards that need to be met for 457 visa applications. This is NOT a minimum salary! Salaries proposed below TSMIT will not be approved by the Department of Immigration and Citizenship (DIAC) – unless in situations where guaranteed benefits take the figure to over TSMIT and the submission is reasonable in the circumstances.

Subclass visa applicants need to be paid the applicable market salary rate for their field of work – and while this rate needs to be greater than the TSMIT, it can vary from role to role.

Signet can employers assess this market rate and provide evidence to substantiate these salary claims to DIAC.

This evidence can include published earnings data, remuneration surveys or detailed findings of what employees in equivalent roles at other organisations are paid if there are no other Australian members of staff performing the same role.

These salary rates can also be set out in some industrial arrangements, including enterprise agreements, common law contracts and industrial awards.

Administrators Note:

Unfortunately, this recent increase will make the 457 visa program even more unattainable for regional employers who have struggled to keep up with paying above the ‘urban’ TSMIT. With RSMS becoming more difficult to achieve due to increases in the English language requirement to 6 in all modules and the restriction of occupations to Level 3 and the new requirement for skill assessments for trade occupations for overseas applicants without Australian qualifications, then it will be difficult for regional employers to access workers other than under local regional Migration Agreements which will simply add another level of bureaucracy to the mix.