The transition to becoming an Australian permanent resident is popular for temporary 457 visa holders. What do employers need to know before supporting an employee through this process?
The most common route to becoming a permanent resident is under the Temporary Residence Transition Scheme (two-year pathway) or the Employer Nomination Scheme (ENS) visa (subclass 186).
Applicants must show that they have been employed in their approved occupation – with their employer as a 457 visa holder – for a period of at least two years in the three-year period immediately before submitting the application.
Although businesses are under no obligation to offer assistance with permanent resident applications, under the ENS, most sponsoring employers will be asked to support an application. Eighty per cent of these employees will hold a 457 visa.
For people who have never – or only briefly – worked in Australia on a 457 visa, one option is the direct entry stream, which is available to applicants who either:
- Have had their skills assessed as suitable and have been employed in their nominated occupation for at least three years; or
- Are exempt from the skill requirement because they are classified under some limited occupations, or their nominated earnings will be at least equivalent to the current ATO top high individual income tax rate of $180,000 per annum.
Further considerations to being eligible to become a permanent resident:
- How old is too old? After the age of 50, eligibility becomes difficult. Exemptions are available for individuals who hold a 457 visa, have worked for their nominating employer for at least four years prior to the visa application, and have been paid at least the corresponding Fair Work High Income Threshold for each of those four years (this is currently $136,700). There are also limited exemptions for certain occupations.
- Do you need a health waiver? Early assessment is important, given that health waivers are only available for applicants under the two-year pathway.
- Who pays? Unlike the 457 program, there is no obligation for the employer to cover the fees, so this will depend on an organisation’s policy. It is not uncommon to see claw-back provisions or written agreements for a reimbursement in the event an employee ceases employment within a period of being granted permanent residence. Both the applicant and the employer will, however, need to make a formal declaration that they have not paid or received a ‘benefit’ in return for the sponsorship opportunity. Seek taxation advice if the employer is to cover the fees, as it could be subject to fringe benefits tax.
- Is the employer the sponsor? Flexibility with the 457 program allows 457 holders to be employed by an associated entity of a sponsor. This is beneficial as it saves costs and paperwork, and avoids multiple sponsorships for each entity. Permanent residence applications require copious paperwork for both parties, expense, and can currently take as long as four to six months to process.