How July 1 visa changes will impact skilled migrants, international students and permanent residents

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A raft of immigration policy and visa changes will be implemented in the new financial year 2021-2022 – which will impact international students, skilled migrants, partners of Australian citizens or permanent residents, or those looking to live and work in Australia permanently.

Below is an overview of immigration policy and visa changes that will be implemented in 2021-2022:

Migration Program planning levels:

The Morrison Government has retained the planning ceiling for 2021-2022 at 160,000 including 79,600 places for the skill stream and 77,300 places for the family stream.

Priority to employer-sponsored, global talent and business visas:

In 2021-22, the Migration Program Skill stream will continue to focus on visa categories that will help Australia’s economy rebound from COVID-19, with priority given to visa cohorts that drive economic growth, job creation and investment into Australia.

The three priority categories within the Skill stream for 2021-22 are:

  • Business Innovation and Investment Program (13,500 places)
  • Global Talent Visa Program (15,000 places)
  • Employer Sponsored Program (22,000 places)

These visa categories provide investment, talent, and critical skills to Australia, and are well positioned to assist Australia’s economic recovery.

Changes to Priority Migration Skilled Occupation List (PMSOL):

As Australia’s international borders remain closed, the federal government has announced that it will fast-track visa applications for more occupations on the Priority Migration Skilled Occupation List (PMSOL) to support the country’s post-coronavirus economic recovery.

As part of this process, employer-sponsored nomination, and visa applications with an occupation on the PMSOL will be given priority during processing. This will apply to existing and future applications and will allow businesses and migrants to have certainty that eligible nominations and applications will be assessed ahead of other applications.

Revealing the new list on 22 June, Immigration Minister Alex Hawke said the government consulted with employers, business leaders and industry bodies to determine the changes.

Focus on onshore applicants:

While the department plans to prioritise economic visa cohorts, as the borders are likely to remain closed until at least early 2022, the top priority will be given to those who are currently onshore.

Business migrants: increase to financial thresholds and reduced staying in Australia requirements.

On 17 December 2020, the Australian Government announced that it will be eliminate the direct to Permanent Residence pathway of the Business Talent 132 visa. There are now only four business and investor visas:

  1. Business Innovation
  2. Investor
  3. Significant Investor
  4. Entrepreneur

As part of the changes, the requirements for a Business Innovation visa – which allows successful applicants to operate a new or existing business in Australia – will now be increased and are deemed to be proportional with rises in wealth and economic prosperity.

Business Innovation visa applicants will now be required to hold personal and business assets of $1.25 million, up from $800,000 and need to have an annual business turnover of $750,000, up from $500,000.  These increases are not expected to have any impact on demand.

Investor Visa holders can no longer invest $1.5 million into Government bonds.

The new Investor visa rules require applicants to make a complying significant investment of at least $2.5 million with an approved Fund Manager.  Investors can choose to work with proven Australian Fund Managers who manage high net worth capital for non-migration purposes.

Investing $2.5m with a Fund Manager with a proven track record will be attractive for some investors who migrate and do not want to work, but rather they are seeking a passive income of around 3% per annum plus capital growth of 5% over the medium term.  Getting 8% combined income and capital returns far exceed the less than 1% returns delivered by investing in Government bonds.

Significant Investor Visa holders are still required to make a complying significant investment of $5 million.

The new rules require both the Investor Visa and Significant Investor Visa holders to invest as follows:

  • 20% in venture capital & private equity fund
  • 30% in emerging company fund
  • 50% in balancing investment fund

Previously, only 10% was required to be invested in venture capital & private equity funds.  This new setting of 20% may not be as unattractive as people may first think.

For those applicants who qualify for either the Business Innovation visa or the Investor visa they will be considering the risk of losing capital.  Under option 1 the Business Innovation visa, the investor has the risks of doing business in a foreign country for the first time, language barriers, competitive markets, etc.  Whereas under option 2 the Investor visa, the investor is effectively outsourcing these risks of investing in private companies to an experienced and proven funds manager.

The Entrepreneur visa now has a different assessment process.  Previously, the Entrepreneur needed to secure funding of $200,000 from a Venture Capital organisation.  That requirement has been scrapped.  Applicants will need to submit their entrepreneurial business plan to a government-approved “Innovation Hub/ Incubator” organisation.  Each state will have set different priorities and have slightly different processes.  What is clear is that businesses that create jobs and create new technologies that may bring advantage to the state will be favoured.

Perhaps the lesser talked about changes are the staying requirements of the business or investor visa applicants, i.e. the time they must stay in Australia on a temporary visa (first stage) in order to progress to the permanent visa (second stage).

The Business Innovation now only requires an applicant to stay in Australia for 1 year out of 3 years.  Previously, this was 1 in 2 years.  So, whilst it may take longer to wait for a PR application, the staying requirement has moved from 50% to only 33%.

The Investor visa requires an applicant to stay in Australia for 2 years in the last 3 years before the PR application.  Whereas previously this was 2 years in the last 4 years.  In effect, the staying requirement has increased for the Investor visa from 50% to 67%.

There are no changes to the staying requirement for the Significant Investor visa – only 40 days per year.  But this is now required for 5 years, instead of 4 years before the PR application.

The Entrepreneur visa requires the PR applicant to have been in Australia for 2 years in the 3 years.

These changes have come into effect on 1 July.  More information about the Entrepreneur visa assessment criteria is expected to be released by states during July and August 2021.

Family visa concessions:

In November, the Morrison Government announced temporary changes to the Family visa program to support applicants impacted by the COVID-19 pandemic.

As part of the temporary arrangement, select family visa applicants who have lodged visas offshore no longer have to go overseas to receive their visa grants, enabling applicants to continue their visa pathway despite their inability to travel offshore in the wake of the current border restrictions.

Announcing the changes on 30 November, Minister Tudge said these “common sense” temporary visa concessions will benefit about 4,000 applicants currently in Australia, predominately those who have applied for offshore partner visas (Subclass 309/100).

“Importantly, this will allow a foreign national who is a partner of an Australian citizen to progress their visa, without having to leave the country,” he said.

The temporary visa concession applies to the following Family visa subclasses:

  • Partner (subclass 309) visa
  • Prospective Marriage (subclass 300) visa
  • Child (subclass 101) visa
  • Adoption (subclass 102) visa
  • Dependent Child (subclass 445) visa

These concessions which commenced in early 2021 will continue to remain in place until further notice.

New English language requirement for Partner visas:

In a bid to maximise employment opportunities for newly arrived migrants, the government in October 2020 announced that migrants and their permanent resident sponsors applying for a partner visa will be required to have functional-level English or will have to demonstrate that they have made reasonable efforts to learn the language.

Partner visa is a two-stage process – applicants get a provisional visa for two years after which they are eligible to apply for a permanent visa.

Applicants and their sponsors will NOT be required to demonstrate their English language competency at the time of lodgement of a provisional visa (309/820) but will have to demonstrate it at the time of applying for a permanent visa (100/801)

The requirement which applies to both the applicant and their sponsor if they are a permanent resident rather than an Australian citizen will come into effect in 2021-2022.

International students can work for over 40 hours a fortnight in select sectors:

In a bid to address labour shortages, the government has temporarily removed the cap on the working hours for international students employed in the hospitality and tourism sectors.

This change is in addition to similar allowances available to overseas students working in critical sectors, including health, aged care, disability care and agriculture.

Australian citizenship fee to increase from 1 July:

Immigration Minister Alex Hawke on 24 June announced that the Department of Home Affairs will update citizenship application fees to reflect the cost of delivering the program more accurately.

As per the change, the standard citizenship by conferral application fee will be raised from $285 to $490.

“The new fees are commensurate with the comprehensive approach to end-to-end processing of citizenship applications and reflect inflation costs, staffing costs and the increased complexity of applications, which take longer to process,” Mr Hawke said in a press release on 24 June.

Administrative Appeals Tribunal fee to increase from 1 July:

From 1 July 2021, application fees for the review of most migration decisions will also be raised.

The fee to review migration decisions in the Administrative Appeals Tribunal (AAT) will increase from the current $1764 to $3000, an increase of nearly 70 per cent. In cases where a 50% fee reduction is granted, the reduced fee payable will be $1,500.

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