Elevating the Temporary Skilled Migration Income Threshold (TSMIT) – Effective from July 1, 2023

As of July 1, 2023, the Temporary Skilled Migration Income Threshold (TSMIT) has seen an increase to $70,000. This adjustment marks a significant change in the skilled migration landscape, impacting various visa categories. Let’s explore the implications of this change and what it means for both employers and skilled workers.

Understanding the TSMIT The TSMIT serves as a crucial criterion for several skilled visas, including the Temporary Skill Shortage (subclass 482), Skilled Employer Sponsored Regional (Provisional) (subclass 494), Employer Nomination Scheme (subclass 186), and Regional Sponsored Migration Scheme (subclass 187). It establishes the minimum income that a skilled migrant must earn while working in Australia.

Transition Period For nominations submitted on or before June 30, 2023, the previous TSMIT of $53,900 still applies. However, nominations submitted after July 1, 2023, must meet the new TSMIT of $70,000 or the Annual Market Salary Rate (AMSR), whichever is higher.

Annual Market Salary Rate (AMSR) The AMSR reflects the industry standard salary that a worker typically earns for a particular occupation in Australia. It can vary based on factors such as location, years of experience, and an employee’s skills. The purpose of the AMSR is to ensure that overseas workers receive salaries on par with Australian workers performing similar roles in the same area. It can be determined through various means, including enterprise agreements, job advertisements, or advice from unions and employer associations.

Why the TSMIT Was Raised The primary motive behind raising the TSMIT is to ensure that the skilled visa program caters to highly skilled individuals who are less susceptible to exploitation. This change is intended to guarantee that migrants entering Australia under these programs have sufficient income to support themselves and their families. It’s important to note that this marks the first increase in the TSMIT since 2013.

Labour Agreements The new TSMIT of $70,000 also applies to labor agreement nominations submitted on or after July 1, 2023. Existing TSMIT concessions will still be applicable, but with adjustments corresponding to the new threshold. For instance, salary concessions of up to 10% for TSMIT at $53,900 translate to a minimum salary of $48,510, while with the new TSMIT of $70,000, the minimum salary increases to $63,000.

AMS Rate Flexibility While these new requirements may exclude lower-skilled occupations from certain programs, the Department offers some flexibility in considering the AMSR. Employers can justify their claims by providing suitable evidence for elements like equivalent work, AMSR determination, and non-monetary benefits.

Salary Assessments for Permanent Residence Pathways For six months, until December 31, 2023, the Department allows non-monetary benefits to contribute to the assessment of AMSR for the Temporary Residence Transition stream of the Employer Nomination Scheme (subclass 186) visa. This is a response to the substantial TSMIT increase, but it is a time-limited measure to prevent long-term wage stagnation.

Labour Market Testing (LMT) The requirements and concessions for labor market testing (LMT) remain unchanged. Advertised salaries in LMT must align with the nominated salary. If a nominated salary exceeds the LMT advertised salary, the LMT requirement is not considered met, as it may deter potential Australian applicants.

Skilling Australians Fund (SAF) In cases where nominations are withdrawn or refused due to a salary lower than TSMIT, there is no provision for a SAF levy refund. Employers are encouraged to ensure they meet the new salary requirements and conduct rigorous labor market testing before lodging their nominations.

These adjustments to the TSMIT are pivotal in aligning Australia’s skilled migration program with the evolving economic landscape, aiming to provide fair employment opportunities and safeguard the welfare of both migrants and the local workforce.