Motion to disallow SAF Regulations: analysis of major potential impacts
On Thursday, 20 September 2018, Senator John Williams of the National Party tabled a notice of motion to disallow the Migration Amendment (Skilling Australians Fund) Regulations 2018 (the “SAF Regulations”).
Should this legislative instrument be disallowed, as of the date of disallowance there would be significant consequences for new and existing 482, 186 and 187 applicants and employers including the following:
- Payment of the nomination training contribution charge (NTCC) aka “SAF Levy” would no longer be required;
- Refund provisions under the SAF Regulations for NTCC charges already paid would be eliminated;
- Certain Training Benchmark requirements would be restored;
- Refunds of VACs and nomination application fees would be affected in certain circumstances;
- Availability of waivers of the full-time position and annual earnings requirements for subclass 482 visas would be eliminated.
The Senate can only disallow the SAF Regulations if it passes a resolution to that effect by 5 December 2018 (15 sitting days from the day the notice of motion to disallow was tabled). If the motion has been neither resolved nor withdrawn by 5 December 2018, the SAF Regulations will be taken to have been disallowed on that date by operation of law.
Of particular importance to practitioners may be the timing of the disallowance process. As reference in the migration legislation to legislative instruments refers to the instrument in effect at the time of decision, it is possible that waiver requests for the full-time position or annual earnings requirements lodged prior to the proposed disallowance would no longer be available at the time of decision, if the decision was made after the proposed disallowance occurs.
At the current time we anticipate strong resistance by the government and others to the motion to disallow, and as such it is not possible to currently predict the likelihood that the disallowance motion will be successful. However, as practitioners we have an obligation to remain informed about current and potential legislative events, and in this regard we present the following detailed analysis of the effects of the proposed disallowance on visa applicants and their employers.
Introduction
Section 140ZM of the Migration Act 1958 (Cth) (the “Act”) provides that a person is liable to pay a Nomination Training Contribution Charge (the “NTCC”) for prescribed nomination applications. According to the Migration Regulations 1994 (Cth) (the “Regulations”) as amended by the Migration Amendment (Skilling Australians Fund) Regulations 2018 (the “SAF Regulations”), the nominations that attract the NTCC are related to visa subclasses 482, 186 and 187.
The amount of the NTCC is set out by the Migration (Skilling Australians Fund) Charges Regulations 2018 (the “Charges Regulations”):
- Subclass 482 nominations: $1,200 per year of the proposed nomination period (for employers with less than $10M turnover); otherwise $1,800 per year of the proposed nomination period.
- Subclasses 186 or 187 nominations: One-time fee of $3,000 (for employers with less than $10M turnover); otherwise one-time fee of $5,000.
The disallowance of the SAF Regulations would prevent the NTCC from being required to be paid, as the Charges Regulations merely set out amount of the NTCC charges. It is the SAF Regulations that actually implement the NTCC charges and require them to be paid in combination with s 140ZM.
Which legislation applies
Before discussing the consequences of the proposed disallowance, we note the specific legislation that would apply according to a timeline with reference to the specific LegendCom stack that would operate at each relevant point time.
The changes brought about by the SAF Regulations are split into Schedules 1 and 2. Schedule 1 of the SAF Regulations commenced on 12 August 2018 and Schedule 2 of the SAF Regulations is planned to commence on 17 November 2018. If the disallowance takes place, the operative provisions of the Migration Regulations would change over time as follows:
- For matters covered by Schedule 1 of the SAF Regulations:
- Until 11 August 2018 (inclusive): the provisions contained in LegendCom, stack of 05/08/2018 to 11/08/2018;
- From 12 August 2018 (inclusive) until immediately before the disallowance takes place: the provisions contained in LegendCom until immediately before the disallowance. Currently, they are found in the stack of 21/09/2018 onwards;
- From immediately after the disallowance takes place: same as item ‘1.1’ above;
- For matters covered by Schedule 2 (insertion of Reg 2.73AA(3F)):
- Until 16 November 2018 (inclusive): the provisions contained in LegendCom as they will stand immediately before 17 November 2018. Currently, they are the ones contained in LegendCom, stack of 21/09/2018 onwards;
- From 17 November 2018 (inclusive) until immediately before the disallowance takes place: the provisions of Reg 2.73AA as amended by Schedule 2. If a disallowance takes place on or before 17 November 2018, Schedule 2 will never commence and thus Reg 2.73AA(3F) will never be inserted into the Migration Regulations;
- From immediately after the disallowance takes place: same as item ‘2.1’ above.
Readers should bear in mind the existence of transitional provisions under Part 76 of Schedule 13 of the Migration Regulations, as inserted by the SAF Regulations. In other words, the above timeline may not apply in some circumstances depending on the date of the nomination application and other factors.
Effect of the proposed disallowance on the NTCC Charge
Payment of the NTCC charge (Schedule 1 of the SAF Regulations)
Current law
A nomination application must be accompanied by the payment of the NTCC that the nominator is liable to pay in relation to a nomination for visa subclasses 482 (Reg 2.73(5A)) and 186 or 187 (Reg 5.19(2)(fa)).
Section 140ZM of the Act provides that a person is liable to pay the charge for prescribed nomination applications. Under Reg 5.42, the nominations that attract that charge are related to visa subclasses 482, 186 and 187.
If disallowed
Given that a disallowance would mean that the nominator would no longer be liable to pay the NTCC in relation to the nomination for the above subclasses, the nomination application would no longer need to be accompanied by the payment of the NTCC.
Note: The NTCC has nothing to do with the nomination application fee (ex: $540 for subclass 186 nominations, $330 for subclass 482 nominations) which would continue to be required.
Refund of the NTCC charge (Schedule 1 of the SAF Regulations)
Current law
The NTCC can be refunded in the circumstances described under Reg 2.73AA(2) to (3E).
If disallowed
It would appear that if the NTCC has been paid prior to the proposed disallowance, it would not be refundable under Reg 2.73AA. That is because the entirety of the SAF Regulations are proposed to be disallowed, which would include the NTCC refund provisions
Refund of the NTCC (Schedule 2 of the SAF Regulations)
Current law
The NTCC can also be refunded under Reg 2.73AA(3F).
If disallowed
It would appear that if the NTCC has been paid before the proposed disallowance, it would not be refundable under Reg 2.73AA(3F) as the entirety of the SAF Regulations are proposed to be disallowed including the NTCC refund provisions are part of them.
Recovery of the NTCC from nominee (Schedule 1 of the SAF Regulations)
Current law
An application by a person to become a sponsor, or to vary the terms of of an approved sponsorship, can only succeed if that person does not recover the NTCC, nor take action or seek to take action to that effect: see Reg 2.60S(2)(ba) and (bb), (3)(a)(ia) and (b)(ia), Reg 2.68J(2)(ba) and (bb), (3)(a)(ia) and (b)(ia).
If disallowed
Non-recovery of the NTCC would no longer be required to approve a person as a sponsor or to vary the terms of a sponsorship approval. After all, payment the NTCC would no longer be required. Recovery of the NTCC as described under Regs 2.60S and 2.68J would not be prevented, so long as the recovery occurs after the disallowance.
However, it would be reasonable to question whether recovery of the NTCC from the nominee could be a breach of ss 245AR or 245AS of the Act regarding providing benefits in return for sponsorship-related events.
Debt due by nominator (Schedule 1 of the SAF Regulations)
Current law
A nomination application cannot be approved unless any debt due by the nominator as per s 140ZO of the Act (recovery of the charge and late payment penalty) has been paid in full for nominations related to visa subclasses 482 (Reg 2.72(5A)) and 186 or 187 (Reg 5.19(4)(da)). Section 140ZO reads:
If an amount of:
(a) nomination training contribution charge; or
(b) a penalty in relation to the underpayment of such a charge;
is due and payable to the Commonwealth, the amount is a debt due to the Commonwealth and may be recovered by action in a court of competent jurisdiction.
If disallowed
Debts incurred by the nominator resulting from non-payment of NTCC would no longer be an impediment to the approval of a nomination application.
Providing the annual turnover (Schedule 1 of the SAF Regulations)
Current law
A person must provide the annual turnover (within the meaning of the Charges Regulations) as part of a nomination application for visa subclasses 482 (Reg 2.73(9)(da)) and 186 or 187 (Reg 5.19(2)(fb)).
If disallowed
Given that the payment of the NTCC would no longer be required, the requirements under Regs 2.73(9)(da) and 5.19(2)(fb) to provide annual turnover would no longer exist.
Further effects of the proposed disallowance
Refund of nomination application fee, not the NTCC charge (Schedule 1 of the SAF Regulations)
Current law
The Minister has the discretion to refund the nomination application fee in certain circumstances, including those described in Reg 2.73AA(3A)-(3E) and Reg 5.37A.
If disallowed
Disallowance would remove the refund provisions under Reg 2.73AA(3A)-(3E) and Reg 5.37A.
Refund of first instalment of VAC (Schedule 1 of the SAF Regulations)
Current law
Under Reg 2.12F(3B), the Minister may refund the amount paid for the first instalment of the VAC if, among other things, the visa applicant withdraws the visa application in writing for any of the reasons listed under Reg 2.12F(3B)(c), including (c)(viii), which reads:
if the nomination application was made on or after 12 August 2018—the nomination application is withdrawn in the circumstances specified in subregulation 5.37A(3), (4) or (5);
Reg 5.37A was inserted by Schedule 1 of the SAF Regulations and reads:
…
(3) This subregulation applies if:
(a) the nomination relates to a visa in a Labour Agreement stream; and
(b) the person is a party to a labour agreement; and
(c) the person withdraws the application for approval of the nomination before a decision is made under regulation 5.19 because:
(i) the person has identified an occupation in the application that is not specified in the labour agreement as an occupation in relation to which a position may be nominated; or
(ii) the number of nominations approved by the Minister under regulation 5.19 on application by the person is equal to or greater than the number of approved nominations permitted under the labour agreement for the year.
(4) This subregulation applies if:
(a) the person withdraws the application for approval of the nomination before a decision is made under regulation 5.19; and
(b) the reason for withdrawing the application is that the information in the application used to work out the amount of nomination training contribution charge in relation to the nomination was incorrect.
(5) This subregulation applies if:
(a) the nomination relates to a visa in a Labour Agreement stream; and
(b) the person withdraws the application for approval of the nomination before a labour agreement is entered.
If disallowed
The reason provided under Reg 2.12F(3B)(c)(viii) that references Reg 5.37A(3)-(5) would no longer be a basis upon which the Minister could refund a VAC.
Period of approval of nomination (Schedule 1 of the SAF Regulations)
Current law
An approval of a nomination in relation to visa subclasses 457 and 482 ceases on the earliest of a number of events, two of which are (Reg 2.75(2)):
(b) 12 months after the day on which the nomination is approved unless, at that time, there is a visa application made by the nominee on the basis of the nomination that has not been finally determined; and
(ba) if a visa application made by the nominee on the basis of the nomination is finally determined or withdrawn after 12 months after the day on which the nomination is approved—the day on which the visa application is finally determined or withdrawn.
If disallowed
The two events above would be replaced by a single event from the restored previous legislation, namely “12 months after the day on which the nomination is approved.”
Training Benchmarks and Ongoing Training Requirements (Schedule 1 of the SAF Regulations)
Current law
For subclass 482 visas: Since 18 March 2018 there has been no obligation to satisfy training benchmarks for the purposes of an SBS application. Since the commencement of Schedule 1 of the SAF Regulations, there has been no need for employers of TSS visa holders to provide ongoing training.
For subclass 186/187: There is no obligation to satisfy training benchmarks or meet training requirements for nomination applications.
If disallowed
For subclass 482 SBS applications, the requirement for meeting Training Benchmarks was eliminated on 18 March 2018. As a result, the proposed disallowance would not restore the training benchmark requirements for subclass 482 SBS applications. However the restoration of Reg 2.87B as a result of the proposed disallowance would restore ongoing training requirements for SBS sponsors.
For subclass 186 or 187 TRT stream nominations, Reg 5.19(5)(i) would be restored and would require meeting ongoing training requirements.
For subclass 186 DE stream nominations, Reg 5.19(10)(c) would be restored and would require meeting training benchmarks A or B.
Full-time position waiver (Schedule 1 of the SAF Regulations)
Current law
One of the criteria for the approval of a subclass 482 nomination application is that the position associated with the occupation be a full-time position (Reg 2.72(10)(b)), unless it is reasonable to disregard that requirement (Reg 2.72(10A)).
If disallowed
The ‘full-time position waiver’ for subclass 482 nominations would be abolished.
Annual earnings waiver (Schedule 1 of the SAF Regulations)
Current law
One of the criteria for the approval of a subclass 482 nomination application is that the nominee’s annual earnings in relation to the occupation will not be less than the annual market salary rate for the occupation (Reg 2.72(15)(e)), unless the Minister has waived the full-time position requirement (see above) and it is reasonable in the circumstances to also waive the annual earning requirement (Reg 2.72(16)(aa)).
If disallowed
The ‘annual earnings waiver’ would be abolished.
Disclaimer: the above is a mere tentative analysis of a disallowance motion. The views expressed in this article might not reflect the view of the Department, the AAT or the courts. The law or policies might have changed between the writing and reading of this article. The author of this article and Migration Law Updates disclaim any liability for any action (or omission) on their part based on any information provided (or not provided) in this article and are under no obligation to keep the general public nor practitioners informed about the matters discussed in this article or any other matters, or any future changes to any of those matters. It is the responsibility of each practitioner to obtain access to primary sources of law and policy by themselves and to carry out their own research and come to their own conclusions on legislation, case law, policies and more. This article is not intended for the general public.
Sergio Zanotti Stagliorio is a Registered Migration Agent (MARN 1461003). He is the owner of Target Migration in Sydney. He can be reached at sergio@targetmigration.com.au