PROTECTED CABINET
Document 1
Submission
For decision
PDMS Ref. Number: MS24-001254
Date of Clearance: 4/09/2024
To
Minister for Home Affairs, Minister for Immigration and Multicultural
Affairs, Minister for Cyber Security
Subject
Modernising and Strengthening the Accredited Sponsor Pathways
and Aligning Sponsorship Obligations
Timing
For consideration as soon as possible, as agreed with Senior Adviser s. 22(1)(a)(ii)
and
Adviser s. 22(1)(a)(ii)
, to enable the Office of Parliamentary Counsel to draft regulation
changes required to implement the Skil s in Demand visa in 2024.
Recommendations
That you:
1. agree to expand the accredited sponsor policy framework to
agreed / not agreed
include a new sixth category: Australian start-up in a Science,
Technology, Engineering or Mathematics based field, which
has received venture capital funding from a registered Early
Stage Venture Capital Limited Partnership fund as outlined in
(
Attachment B);
2. agree to strengthen policy and messaging in relation to
agreed / not agreed
revoking accredited status in circumstances where the sponsor
no longer meets the criteria for accreditation or the sponsor
fails to satisfy their obligations (
Attachment C);
3. agree to amend the
Migration Regulations 1994 (the
agreed / not agreed
Migration Regulations) to align with the changes introduced
on 1 July 2024 to visa conditions 8107, 8607 and 8608 as
outlined in (
Attachment D);
4. agree to amend the Migration Regulations to ensure
agreed / not agreed
sponsorship obligations which are applicable to standard
business sponsors, also apply to sponsors of those primary
persons holding a Skills in Demand (subclass 482) visa
(
Attachment D); and
s. 47C(1)
s. 47C(1)
Minister for Home Affairs, Minister for Immigration and
Multicultural Affairs, Minister for Cyber Security
Signature………………………………………………
Date:……/……./ 2024
PROTECTED CABINET
Page 1 of 8
1
PROTECTED CABINET
Document 1
Background
9. A person can apply to become an 'Accredited Sponsor' as part of their application to become
an approved Standard Business Sponsor (SBS), or when renewing their sponsorship. As an SBS,
or accredited sponsor, they are able to sponsor a foreign worker on a Temporary Skill Shortage
visa (subclass 482) or Skilled Employer Sponsored Regional (Provisional) visa (subclass 494).
10. If a sponsor is awarded accredited status, they will receive priority processing of all nomination
and visa applications. This is enacted by a ministerial direction (Ministerial Direction No. 105)
under section 499 of the
Migration Act 1958 (the Migration Act). Accredited sponsors,
afforded accredited status on or after 1 July 2016, also receive streamlined processing of
certain low-risk nominations.
11. The current accredited sponsor categories are:
• Category 1: Commonwealth, state and territory Government agencies;
• Category 2: Australian Trusted Traders;
• Category 3: Low volume usage and high percentage of Australian workers (at least 85%);
• Category 4: High volume usage and medium percentage of Australian workers (at least 75%);
• Category 5: Major investment in Australia.
12. As at 30 April 2024, there were a total number of 24,645 active standard business sponsors. As
at 12 June 2024 there were 3,497 accredited sponsors with ‘in effect’ SBS agreements in place,
with the vast majority of sponsors being awarded accredited status under Category 3
(2,474 approximate figure only).
Start-ups
13. To qualify for accreditation, a sponsor must meet the requirements in one of the five
categories. Currently, accredited sponsorship can be considered for start-ups under
‘Category 3: Low volume usage and high percentage of Australian workers (at least 85%)’.
These are assessed on a case-by-case basis.
14. They can also be considered under ‘Category 5: Major Investment in Australia,’ however,
criteria under this category usually requires the business to have made a major investment in
Australia of at least AUD$50M. Start-ups which do not meet this criteria can apply for
accreditation if special circumstances apply.
15. Currently data for start-ups who have applied for or been granted accreditation under
Category 3 is not available due to limitations in reporting, however, anecdotal evidence from
program delivery areas suggest take-up is limited or nil due to difficulty in meeting the criteria.
16. Definitions of a start - up vary, however, is commonly considered a young business, usually
within the first several years of operation, which has potential for mass scale/rapid growth and
is funded by external investors. The business is founded in innovation, that is, they develop a
unique product or service by remedying deficiencies of existing products or create entirely new
categories of goods and services. Overseas businesses looking to open a branch in Australia, or
with existing businesses registering under a new ABN would not meet this definition.
17. Limiting eligibility to start-ups operating in a Science, Technology, Engineering or Mathematics
(STEM) based field supports the Government’s objectives of driving innovation and productivity
in emerging industries. It will also ensure consistency with the requirements for start-ups in the
Global Talent Employer Sponsored stream and proposed new National Innovation Visa.
PROTECTED CABINET
Page 3 of 8
3
PROTECTED CABINET
Document 1
Early Stage Venture Capital Limited Partnership funding
18. Start-ups will need to be a recipient of funding from a registered Early Stage Venture Capital
Limited Partnership funding (ESVCLP) to qualify for accredited status. The ESVCLP program is
jointly administered by the Australian Taxation Office and Department of Industry, Science and
Resources (DISR) and is aimed at stimulating the early stage venture capital sector in Australia.
19. Investors who wish to register as an ESVCLP must apply through Innovation and Science
Australia's Innovation Investment Committee (I C) who will register a partnership as an ESVCLP
if it meets certain eligibility criteria. Once registered, an ESVCLP can make early stage venture
capital investments in companies and are awarded benefits such as tax exemptions, however,
they must continue to meet ongoing registration and reporting requirements.
20. Start-ups which have received funding from a registered ESVCLP may be in a better position to
meet their financial obligations to workers. Funding may also provide more certainty of the
future success of the business as the ESVCLP program provides fund managers and investors
with financial guidance and support.
s. 47C(1)
22. Data provided by DISR indicates approximately 1,100 start-ups have received ESVCLP funding
during the past 5 years, providing a broad indicator as to the target cohort. It is expected that
the number of start-ups looking to access accredited status via the sixth category will be a
small sub-set of this number.
Financial year
Estimate of businesses invested in
(initial investments only)
2019/20
246
2020/21
264
2021/22
271
2022/23
244
2023/24*
131
*
includes up to 3rd quarter (March 2024)
23. The Department has consulted with The Tech Council and DISR on any additional requirements
around this new sixth category that could be included to safeguard visa holders given potential
sponsors in this category do not have a long-standing history of immigration compliance. This
included looking at implementing a minimum threshold amount of venture capital funding.
24. Given the small number of businesses expected to access the scheme under this category, a
threshold funding amount is not recommended. Introducing a threshold may significantly
impact the number of business that could meet eligibility and draw criticism for being too
restrictive.
25. The amount of VC funding a start-up receives is also not necessarily indicative of the financial
viability of the business, given that start-ups often seek funding from a variety of sources.
Financial viability is also not a criterion for any of the other accreditation categories and is
something that would be assessed at the standard business sponsorship application stage.
PROTECTED CABINET
Page 4 of 8
4
PROTECTED CABINET
Document 1
Revocation
26. If a sponsor fails to maintain the characteristics for accreditation, or they declare that they no
longer meet these characteristics as part of a sponsorship renewal application, their accredited
status can be revoked by a departmental officer in the delivery processing area. The ability to
revoke accreditation currently sits within policy.
27. When a sponsor's accredited status is revoked they lose their right to priority processing and
streamlined processing of low-risk nominations, however, their sponsorship agreement
remains in place until its expiry (unless the reason for the Accredited Status revocation also
results in cancel ation of the sponsorship or barring of the sponsor under section 140M of the
Migration Act).
28. s. 47E(d)
s. 47C(1)
s. 47C(1)
Options for implementation
31.s. 42(1)
32.s. 42(1)
33. Retaining the accreditation scheme in policy wil mean the proposed changes can be
implemented quickly with minimal legal or financial implications, noting that IT system
changes are already under way for an expected implementation date of 23 November 2024. It
will also ensure the Government delivers on its commitment to modernise and strengthen
accreditation pathways by late 2024, as noted in the
Migration Strategy.
34.s. 42(1)
PROTECTED CABINET
Page 5 of 8
5
PROTECTED CABINET
Document 1
35. Providing for the accreditation scheme to be established and maintained via the Migration
Regulations will require changes to the Migration Act. However, this approach will require
complex amendments to avoid inconsistencies with future regulations, other delegated
legislation or the work sponsorship framework in the Migration Act, as well as consideration of
how these legislative changes would interact with the existing framework for merits review
and judicial review.
s. 47C(1)
Proposed amendments to the Migration Regulations to align with enhanced mobility provisions
and ensure sponsorship obligations apply to the new Skil s in Demand (subclass 482) visa
37. From 1 July 2024, the Migration Regulations were amended to increase the time that certain
visa holders may cease to work in accordance with the normal requirements of visa conditions
8107, 8607 and 8608 that would otherwise restrict their ability to work outside of their
sponsorship arrangement (MS24-000809).
38. These amendments enhanced the labour market mobility for temporary migrants under the
Subclass 457 (Temporary Work (Skilled)), Subclass 482 (Temporary Skill Shortage) and Subclass
494 (Skilled Employer Sponsored Regional (Provisional)) visa programs.
39. Visa holders who cease work with their sponsoring employer will now have up to 180 days at a
time and a maximum of 365 days in total across the entire visa grant period to find a new
sponsor, apply for a different visa, or depart Australia.
40. While sponsor obligations have not changed, we are seeking your urgent approval to proceed
with further proposed changes to the Regulations to align with the enhanced mobility
provisions that commenced on 1 July 2024. These proposed amendments would provide that a
sponsor’s obligation to ensure the primary sponsored person works or participates in the
nominated occupation, program or activity ends when the primary sponsored person ceases
employment with the sponsor. See further details at
Attachment D.
s. 47C(1)
s. 47C(1)
s. 47C(1)
Consultation – Internal/external
44. Consultation was undertaken with s. 47F(1)
from the Tech Council of Australia in
relation to the policy intent in their submission to the Migration Review. DISR was also
consulted in relation to the eligibility requirements and processes of the ESVCLP program.
PROTECTED CABINET
Page 6 of 8
6
PROTECTED CABINET
Document 1
45. The Migration Reform Taskforce has been consulted on the changes outlined in this
submission, and has confirmed that the changes are in alignment with commitments under the
Government’s
Migration Strategy.
46. The Chief Financial Officer was not consulted in the development of this submission.
47. The Department’s Migration, Citizenship and International Law Branch, Legislation Branch and
the AGS have been consulted on the required policy and legal changes.
Consultation – Secretary / Associate Secretary Immigration / ABF Commissioner
48. The Secretary, Associate Secretary and ABF Commissioner were not consulted on the approach
in the submission.
Client service implications
s. 47C(1)
s. 47C(1)
Risks and Sensitivities
s. 47C(1)
Financial/systems/legal/deregulation/media implications
52. s. 34(3)
s. 47C(1)
54. Systems related changes also require the full scope to be determined as soon as possible to
allow for implementation by the target date of 23 November 2024.
55. The legal implications related to this policy change are outlined within the body of the
submission. Subject to your approval, we would seek your approval in a separate submission.
56. The information contained in this submission is classified and should not be publicly released
without the authority of the department. In accordance with our long-standing practices,
should you wish for unclassified media lines to be prepared in relation to this issue please
contact the Home Affairs Media Operations team – xxxxx@xxxxxxxxxxx.xxx.xx.
PROTECTED CABINET
Page 7 of 8
7
PROTECTED CABINET
Document 1
Attachments
Attachment A Tech Council submission to the Migration Review 2023
Attachment B Modernising the accredited sponsor pathways – Proposed criteria for a sixth
accreditation category
Attachment C Strengthened policy and messaging in relation to revocation of accredited
status – Proposed changes
Attachment D Aligning sponsorship obligations – Proposed changes
Attachment E Talking Points – Changes to Schedule 8 visa conditions
Authorising Officer
Cleared by:
Karin Maier
A/g First Assistant Secretary
Immigration Programs Division
Date: 27/08/2024
Mob: s. 22(1)(a)(ii)
Contact Officer: Patrick Bryson, A/g Assistant Secretary, Skil ed Visas Branch, Ph: s. 22(1)(a)(ii) / Mob: s. 22(1)(a)(ii)
Through
Group Manager Immigration Policy
CC
Assistant Minister for Immigration
Secretary
Associate Secretary Immigration
Group Manager Immigration Operations
Group Manager Legal
Chief Finance Officer
FAS Executive Coordination
Assistant Secretary Legislation
PROTECTED CABINET
Page 8 of 8
8
Document 1.2
PROTECTED // CABINET
Attachment B: Modernising the accredited sponsor pathways - Proposed criteria
for a sixth accreditation category
A proposed sixth category to be added to the existing accreditation framework:
Category 6: Australian start-up in a STEM-based field, which has received venture capital
funding from a registered Early Stage Venture Capital Limited Partnership (ESVCLP) fund.
Proposed eligibility criteria:
o your Australian start-up is in a STEM-based field
o you have received venture capital funding from a fund registered as an Early Stage
Venture Capital Limited Partnership (ESVCLP)
o be a standard business sponsor
o you have complied with all of your sponsor obligations
o you have no adverse monitoring outcomes
o you have paid all Australian employees in accordance with an Enterprise Agreement or
an internal salary table that reflects the current market salary rate
o you have a written contract of employment for al employer sponsored visa holders
that meets the National Employment Standards where they apply
Risks/Sensitivities
• s. 47C(1)
• s. 47C(1)
• s. 47C(1)
Page 1 of 2
Document 1.3
PROTECTED // CABINET
Attachment C: Strengthened policy and messaging in relation to revocation of
accredited status - Proposed changes The fol owing changes are proposed to ensure increased and effective messaging around
accredited status and the requirement for sponsors to comply with their obligations:
I. The following eligibility criteria for existing accreditation categories (which currently only apply
in full to categories 3 and 4 and partly to categories 2 and 5) will be applied across all
categories to ensure consistency:
o you have complied with all of your sponsor obligations
o have no adverse monitoring outcomes
o you have paid all employees in accordance with an Enterprise Agreement or an
internal salary table that reflects the current market salary rate
o you have a written contract of employment for al employer sponsored visa holders
that meets the National Employment Standards where they apply
II. Amend existing policy to specify that in circumstances where a sponsor is sanctioned (by
action taken under Section 140K of the Migration Act) for failure to maintain their
sponsorship obligations (as provided for in Division 2.19 of Part 2A of the Regulations), a
decision maker can revoke their accredited status.
III. Increase messaging to sponsors to advise that failure to satisfy sponsor obligations may
lead to revocation of accredited status and may impact future applications for
accreditation via:
o updates to existing sponsor approval ECS templates
o website updates and news item
o updates to existing fact sheets
s. 47C(1)
• s. 47C(1)
• s. 47C(1)
PROTECTED // CABINET
Page 1 of 2
Document 1.3
PROTECTED // CABINET
s. 47C(1)
• s. 47C(1)
PROTECTED // CABINET
Page
2 of
2
Document 1.4
PROTECTED // CABINET
Attachment D: Aligning Sponsorship Obligations with enhanced mobility
provisions - Proposed changes • From 1 July 2024, changes were made to the following Schedule 8 visa conditions which allow
for temporary employer sponsored visa holders who cease working for their sponsoring
employer to have more time to find a new sponsor, apply for a different visa or arrange to
depart Australia:
o Condition
8107: Not cease or change work;
o Condition
8607: Approved work only (Temporary Skills Shortage visa – subclass 482);
o Condition
8608: Approved work only (Skilled Employer Sponsored Regional
(Provisional) visa program.
• Visa holders who cease work with their sponsoring employer will now have up to 180 days at a
time and a maximum of 365 days in total across the entire visa grant period to find a new
sponsor, apply for a different visa, or depart Australia.
• Related to this, sub-regulation 2.86(3)(b) of the
Migration Regulations 1994 (‘the Regulations’)
will need to be amended to specify that the sponsor obligation to ensure the primary
sponsored person works or participates in the nominated occupation, program or activity ends
when the primary sponsored person ceases employment with the sponsor.
Subregulation 2.86(3) of the Regulations currently states the fol owing:
(3) The obligations mentioned in subregulations (2) to (2C):
(a) start to apply:
(i) on the day on which the Minister approves a nomination by the person that identifies
the primary sponsored person; or
(ii) if the primary sponsored person does not hold a visa mentioned in subregulation (1) on the
day the Minister approves the nomination — on the day on which the primary sponsored
person is granted the visa on the basis of being identified in an approved nomination by the
person; and
(b) end on the earliest of:
(i) the day on which the Minister approves a nomination under section 140GB of the Act by
another approved work sponsor in which the primary sponsored person is identified; and
(ii) the day on which the primary sponsored person is granted a further substantive visa that
is in effect and is:
PROTECTED /
Page 1 of 3
/ CABINET
Document 1.4
PROTECTED // CABINET
(A) if the last substantive visa held by the primary sponsored person was a Subclass 457
(Temporary Work (Skil ed)) visa—a visa that is not a Subclass 457 (Temporary Work
(Skilled)) visa or a Subclass 482 (Temporary Skill Shortage) visa; or
(B) in any other case—a visa of a different subclass to the last substantive visa held by
the primary sponsored person; and
(iii) the first day on which each of the fol owing has occurred:
(A) the primary sponsored person has left Australia;
(B) the visa granted to the primary sponsored person on the basis of being identified in
an approved nomination by the person has ceased to be in effect;
(C) if:
(I) the primary sponsored person held a Subclass 020 (Bridging B) visa when
the primary sponsored personleft Australia; and
(II) the last substantive visa held by the primary sponsored person was the visa
granted to the primary sponsored person on the basis of being identified in an
approved nomination by the person;
the bridging visa has ceased to be in effect.
Ensuring sponsorship obligations continue under the Skills in Demand (subclass
482) visa - Proposed changes
• Currently, sponsor obligations apply to specified visa subclasses, including the Temporary
Work (Skilled) (subclass 457) and Temporary Skill Shortage (TSS) (subclass 482) visa. With the
introduction of the Skills in Demand (SID) visa in late 2024, changes will need to be made to
the Regulations to ensure sponsorship obligations wil also apply to sponsors of those persons
holding a SID visa.
Proposed changes
• Amendments to the Regulations, including the sponsorship obligation specified at regulation
2.86 (and any other provisions that may apply) to specify that the obligation to ensure the
primary sponsored person works or participates in the nominated occupation, program or
activity ends when the primary sponsored person ceases employment with the sponsor.
• To ensure continuity, amend the Regulations to ensure sponsor obligations which are
applicable to standard business sponsors (including 457 and TSS sponsors) also apply to those
sponsors of persons holding a Skills in Demand (subclass 482) visa.
• Updated messaging to sponsors via website updates and news item.
PROTECTED // CABINET
Page
2 of
3
Document 1.4
PROTECTED // CABINET
Risks/Sensitivities
• s. 47C(1)
PROTECTED // CABINET
Page
3 of
3
Document 1.5
TALKING POINTS
Subject
Schedule 8 visa changes to visa conditions 8107, 8607 and 8608
Date
11 July 2024
Type
Agency
Media Officer:
Media Ph:
ISSUE
On 1 July 2024, changes commenced to enable temporary employer sponsored visa holders who
stop working with their sponsoring employer to have more time to find a new sponsor, apply for a
different visa or arrange to depart Australia.
TALKING POINTS OFFICIAL
- The
Migration Strategy, released by the Australian Government in December 2023, outlined
a commitment to provide worker mobility and build a migration system that is responsive to
labour market needs.
- From 1 July 2024, temporary employer sponsored visa holders who stop working with their
sponsoring employer wil have more time to find a new sponsor, apply for a different visa or
arrange to depart Australia.
- The changes wil enhance the labour market mobility of temporary migrants under the
Subclass 457 (Temporary Work (Skil ed)), Subclass 482 (Temporary Skil Shortage) and
Subclass 494 (Skil ed Employer Sponsored Regional (Provisional)) visa programs.
- Visa holders who cease work with their sponsoring employer have up to 180 days at a time
and a maximum of 365 days in total across the entire visa grant period to find a new sponsor,
apply for a different visa, or depart Australia.
- Visa holders wil have work rights during this time, ensuring they can support themselves
while they look for a new sponsor. They do not have to work in the same occupation
nominated by their previous sponsor.
- As outlined in the
Migration Strategy, these changes wil also become a feature of the Skil s
in Demand visa when it is introduced as a replacement to the Temporary Skil s Shortage
visa.
If asked
How wil this impact sponsors?
- Sponsorship obligations have not changed. Sponsors must continue to comply with their
sponsorship obligations. This includes ensuring the Department is notified when a visa
holder ceases work with them.
1
Page 1 of 3
Document 1.5
- Unless an exemption applies, visa holders must continue to work in their nominated
occupation when working for their sponsor. The mobility changes apply only when the
employment relationship with their sponsor ceases.
- The Department can impose penalties on sponsors found not to be complying with their
obligations.
As a sponsor, I am required to ensure the visa holders I employ work only in their nominated
occupation. What wil happen if they cease work with me and work in a different occupation?
- Sponsors must ensure that they notify the Department when a visa holder ceases work with
them.
- Under current sponsorship obligations, sponsors must ensure visa holders work only in their
nominated occupation. This applies until the visa holder obtains a new approved nomination,
is granted a different substantive visa, or departs Australia and their substantive visa or
bridging visa ceases to be in effect.
- The Department is currently reviewing sponsor obligations to ensure they remain consistent
with the revised visa conditions.
- A flexible approach to enforcing this obligation wil be applied and any changes to the
sponsor obligations wil be announced in due course.
Wil the visa holder be able to work in any occupation they want?
- Visa holders can support themselves through paid work in another occupation while they
seek a new sponsor, pursue another visa pathway or make arrangements to depart
Australia. They can only work outside of their nominated occupation for up to 180 days at a
time, or 365 days in total across their visa grant period.
Can visa holders work for an employer that is not approved sponsor?
- Visa holders can work for an employer that is not an approved sponsor during the periods
outlined in the revised conditions.
- Employers who are not approved sponsors may use the time period outlined in the visa
condition to apply to become a sponsor and lodge a nomination for the visa holder, if they
wish to do so.
What measures wil ensure that visa holders comply with their conditions and work in their
nominated occupation?
- Sponsorship obligations have not changed. Sponsors stil need to ensure that the
Department is notified when a visa holder ceases employment.
- Visa holders working without an approved nomination for more than 180 days at a time or
365 days in total during their visa grant period wil be in breach of their visa conditions and
may face visa cancellation. Any breaches of visa conditions can also impact further
temporary and permanent visa applications.
How wil the changes impact visa holders with licencing and registration requirements?
- Visa holders with a nominated occupation where licencing and registration is required must
not engage in work that is inconsistent with their licence or registration.
- This wil ensure that visa holders cannot work in breach of any conditions or requirements
their licence or registration is subject to.
- During the time periods outlined in the revised conditions, visa holders with licensing and
registration requirements are able to work in other occupations where these are not required.
2
Page 2 of 3
Document 1.5
How wil these changes prevent worker exploitation?
- The changes wil allow visa holders to support themselves while searching for a new
sponsor.
- The additional time wil also give visa holders greater confidence to leave an exploitative
workplace without fear of breaching their visa conditions if it takes time to find a new
sponsor.
3
Page 3 of 3
