TSMIT is short for "Temporary Skilled Migration Income Threshold". First introduced in 2009, the TSMIT is the minimum salary level required for employers to pay sponsored migrant workers. When used in conjunction with other market salary information, the purpose of the TSMIT is to ensure that sponsoring employers do not exploit visa holders and that the wages and conditions of Australian workers are protected.
In 2009, the TSMIT was set at AUD 45,220 per year. Subsequently, there have been four indexed increases to the TSMIT. On 1 July 2013, the TSMIT was set at AUD 53,900 and is the current level.
Since 2013, despite several calls to continue the indexed increases of TSMIT, it is only now, in 2023, the current government has announced an upcoming increase. On 27 April 2023, the Minister for Home Affairs, the Hon. Clare O'Neil, in her National Press Club address signalled the increase of the TSMIT, as of 1 July 2023, to AUD 70,000.
Although no legislative details have been released yet, given that the increase is significant, let's consider the potential impacts the change may have on pending and upcoming employer-sponsored visa applications.
Which visas are affected?
Employer-sponsored visas will be affected. Subclasses 482, 494, 186 and 191 visas intersect with the TSMIT requirements. Although the subclass 191 visa is not strictly employer-sponsored, it is a visa that applicants access through time spent on the regional employer-sponsored visa, subclass 494.
Legislative Framework
Using the subclass 482 visa as an example*, for a nomination of position to be approved, the sponsoring employer must propose a salary for the nominee (visa applicant) above the TSMIT, in addition to meeting annual market salary rates. The relevant legislation is:
Regulation 2.72
15(d) the annual market salary rate, excluding any non-monetary benefits, for the occupation… is not less than the temporary skilled migration income threshold specified by the Minister in a legislative instrument made for the purposes of this paragraph;
…and the 'legislative instrument' is:
IMMI18/033: Specification of Income Threshold and Annual Earnings and Methodology of Annual Market Salary Rate) Instrument 2018
6 Income Threshold
For the purposes of paragraph 2.72(15)(d) of the Regulations, the temporary skilled migration income threshold is AUD 53,900.
*Note: similar provisions for TSMIT apply to subclass 494 and 186 nominations.
How does changing the TSMIT to AUD 70,000 affect nomination applications pending a decision?
The key point is that the TSMIT requirement is a 'time of decision' requirement.
'Time of Application' vs.' Time of Decision' Criteria.
One of the confusing quirks of the Australian immigration legal framework is the concept of 'time of application' vs 'time of decision' criteria. A Delegate assessing an application will focus on various criteria at two points during the application process. These two points are:
i. when the application was lodged (i.e., 'time of application'); and
ii. when the Delegate makes a decision on the application (i.e., 'time of decision').
An example of a 'time of application' criterion is the age requirement for a subclass 186 visa. When the application is made, the visa applicant must be aged less than 45 years (unless exemptions apply). So, regardless of visa processing duration, if the visa applicant was younger than 45 when they applied, this requirement is met. It does not matter if the applicant turned 45 during processing.
An example of a 'time of decision' criterion is the TSMIT requirement. 'Time of decision' criteria can be a double-edged sword. In some cases, they can be an advantage to the applicant. In other cases, they can be like a ticking timebomb.
I believe a significant increase to the TSMIT is a ticking timebomb for many pending nomination applications.
Consider the following scenarios.
1. A nomination of position for a subclass 186 visa, lodged in March 2023, with a proposed salary for the nominee of AUD 60,000.
At the time of application, the TSMIT was AUD 53,900. Regarding the proposed salary, AUD 60,000 is well above the TSMIT and should meet the salary requirements.
However, what happens if the nomination application is not decided before 1 July 2023? This is a likely possibility, given that the processing time for ENS applications is over three months. The pending nomination application would then be assessed on a TSMIT of AUD 70,000, even though at the time of application, the TSMIT was AUD 53,900.
Further, the applicant and the sponsor had no forewarning of the proposed significant increase to the TSMIT, given that the application was lodged before the Minister's announcement on 27 April 2023.
2. A nomination for a subclass 482 visa, sponsoring employer intends to apply before 1 July 2023, with a proposed salary of AUD 60,000.
This scenario is similar to the first, except the applicant and sponsor are aware of upcoming changes in July 2023.
Now, the consideration is not only will the application be decided before 1 July 2023, but given the applicant has forewarning of the upcoming change, will the Department view this application any differently?
3. Current subclass 494 visa holders transition to a subclass 191 visa.
This scenario is not yet clearly understood to be a TSMIT issue. However, it has the potential to be such. I have previously written on the taxable income requirement for 191 visas.
To summarise, the subclass 191 applicant must demonstrate that they have earned a prescribed annual income as the holder of a 494 visa. This threshold has yet to be defined in legislation; however, a reasonable assumption is that the TSMIT will be the required level.
The subclass 494 visa has been in effect since 2019, so current visa holders were nominated under the current TSMIT (AUD 53,900). Will current 494 visa holders on a salary of, for example, AUD 60,000 need their salary to be raised to AUD70,000 to meet TSMIT requirements for a subclass 191 visa?
Possible approaches to pending nomination applications.
The following is speculation only but may reflect possible approaches taken by the Department to address issues raised in the scenarios above.
1. Inserting grandfathering arrangements into the new legislative instrument.
Changes to the legislative instrument which defines the TSMIT could include grandfathering arrangements that specify nomination applications lodged before 1 July 2023 are not subject to the raised TSMIT.
It may even be the case that the grandfathering arrangement specifies that applications lodged before the Minister's announcement on 27 April 2023 will be protected from the impact of the raised TSMIT. This way, sponsoring employers would not be 'rewarded' by any attempts to rush applications in before 1 July 2023 to avoid the new TSMIT level.
2. Opportunity for sponsoring employer to update the pending application with a new proposed salary.
Another approach may be to allow the sponsoring employers with pending nomination applications to increase the nominees' proposed salaries to meet the new TSMIT. In the same example, a sponsoring employer proposing a salary of AUD 60,000 maybe permitted to provide a new offer of at least AUD 70,000 during the processing of the nomination application.
This approach, however, may have unintended consequences. Namely, it may question the 'genuineness' of the proposed nomination. In other words, would it be reasonable for an employer to argue that they are suddenly willing to raise a nominee's salary by AUD 10,000 only to meet a baseline salary requirement?
3. Refusal
A stark possibility may be that the Department places a cohort of pending nomination applications on hold until 1 July 2023, then refuse them for not meeting the new TSMIT requirements.
Hopefully, the sense of fairness the Minister referred to in her announcement will be at the heart of any transition to a new framework.
In summary, the announcement to increase the TSMIT to AUD 70,000 has raised more questions than it has answered. I will update this post with any relevant information as it becomes available.
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The information provided in this article or anywhere on this website is of a general nature, it does not relate to your specific circumstance. This general information must not be used to form any assessment or opinion on individual visa eligibility. For an individual assessment contact us for a consultation session to confirm if you are eligible for any visa.
