New TSMIT and changes to Employer Sponsored Migration – the fallout

5 May 2023
Skilled Migration Service

By now, you will have heard on various social medial channels and websites, that there are new changes affecting Employer Sponsored Migration pathways in Australia.

Here is a summary of what’s happening based on a press release issued by the Immigration Minister Andrew Giles MP and Home Affairs Minister Clare O’Neil.

1. Temporary Skilled Migration Income Threshold (TSMIT) to increase to $70,000 effective 1 July 2023, the first time it has increased in approximately a decade. Around 90% of all full-time jobs in Australia are now paid more than the current TSMIT, undermining Australia’s skilled migration system. The new $70,000 income threshold is approximately where the TSMIT should have been if it had been properly indexed over the previous 10 years. This is the Government’s first action in response to the independent Review of the Migration System led by Dr Martin Parkinson, which found that Australia’s migration system is “broken”.

2. The Albanese Government is also announcing that by the end of 2023, Temporary Skill Shortage (TSS) short stream visa holders will have a pathway to permanent residency within our existing capped permanent program.

So, the question is, how does this affect Australian employers who wish to recruit overseas talent, and the employees who wish to be sponsored?
The short answer is, until such time there is detailed legislation and policy, it is hard to say conclusively.

The rationale for these changes can be gleaned from the approximately 200 page, ‘Review of the Migration System – Final Report 2023’ produced by former senior public servant Dr Parkinson, migration academic Professor Joanna Howe and businessman John Azarias. We read it so you don’t have to.

Broadly speaking, and with particular relevance to the Employer Sponsored Visa Program, there is a focus on preventing exploitation - both through the structure of the program and by unscrupulous employees.

There is also a focus on attracting genuine skilled workers and providing them with certainty of gaining permanent residency.

The report identifies that there is some worker exploitation and misuse of the program at the soon to be outdated $53,900 TSMIT level.

I cannot help but see this in the context of our current economic and political landscape, especially with interest rate hikes, the cost of living rises we have seen with high inflation, and increased pressure from employees and unions for the wages to keep pace.

Another key recommendation of the report, which has been adopted by the Government, is the provision of a path to permanent residency for 482 visa holders. This is good news for Businesses and Employees alike.

If legislation is enacted to offer a clear path to permanent residency, businesses win because there’s certainty and less administrative effort, and possibly less cost, to retain the talent they have already recruited.

From the employee’s point of view, there is peace of mind knowing that they do not have to pack their bags, often with their family, at the end of the 482 visa.

All this makes a 482 visa even more attractive to prospective employees.

But one possible hitch in the proposed reforms is that the relevance of TSMIT can vary across Australia. In Sydney, it reflects reality of the salary required to live in that particular city. But it may not translate to regional Australia.

With the new TSMIT, regional employers may struggle to fill a position due to this change, even when an overseas employee is perfectly content accepting a salary at $53,900.

Having said that, if the trade-off is an easier pathway to permanent residency, the changes may be worth it.

Filtering out reasonably highly paid migrants Australia needs and providing them and their employers with a clear pathway to permanent residency may be for the greater good.

But we really need to see how all this plays out in practice.


Dilini Uragoda LLB (London), MARN 1575346

Senior Manager, Skilled Migration

AMES Australia