EXPLANATORY STATEMENT
Migration Regulations 1994
SPECIFICATION OF INCOME THRESHOLD AND ANNUAL EARNINGS
(PARAGRAPH 2.72(10)(cc), SUBREGULATION 2.72(10AB) and PARAGRAPH 2.79(1A)(b))
- This Instrument is made under paragraph 2.72(10)(cc), subregulation 2.72(10AB) of Division 2.17 of Part 2A and paragraph 2.79(1A)(b) of Division 2.19 of Part 2A of the Migration Regulations 1994 (‘the Regulations’).
2. Item (1) of this Instrument revokes Instrument number IMMI 10/037 signed by the Minister on 17 June 2010 that specified the temporary skilled migration income threshold and annual earnings under the same provisions of the Regulations.
3. Item (2) of this Instrument specifies that for the purposes of paragraph 2.72(10)(cc) of the Regulations the temporary skilled migration income threshold is AUD 49,330. The purpose of this item is to provide for the annual indexation of the temporary skilled migration income threshold annually according to the Australian Bureau of Statistics Average Weekly Earnings data.
4. Paragraph 2.72(10)(cc) of the Regulations provides that the Minister must be satisfied that the base rate of pay (under the terms and conditions of employment mentioned in paragraph 2.72(10)(c)) that are provided, or would be provided, to an Australian citizen or an Australian permanent resident, will be greater than the temporary skilled migration income threshold specified by the Minister in an instrument in writing for this paragraph.
5. Item (3) specifies annual earnings of AUD 180,000 for the purposes of subregulation 2.72(10AB) of the Regulations and paragraph 2.79(1A)(b) of the Regulations. This figure remains at AUD 180,000 as it continues to align with the ordinary taxable income of a taxpayer required to pay the highest rate of tax under Part I of Schedule 7 to the
Income Tax Rates Act 1986.
6. Subregulation 2.72(10AB) provides that paragraphs 2.72(10)(c) and 2.72(10)(cc) do not apply if the annual earnings of the person identified in the nomination are equal to or greater than the amount specified by the Minister in an instrument in writing for this subregulation.
7. Paragraph 2.79(1A) of the Regulations provides that regulation 2.79, that provides the obligation to ensure equivalent terms and conditions of employment, does not apply to a standard business sponsor of a primary sponsored person if either:
- the primary sponsored person holds a Subclass 457 (Business (Long Stay)) visa or the last substantive visa held by the primary sponsored person was a Subclass 457 (Business (Long Stay)) visa; and
- the annual earnings of the primary sponsored person are equal to or greater than the amount specified by the Minister in an instrument in writing for this paragraph.
8. The effect of 2.79(1A)(b) is that the primary business sponsor does not have to satisfy the obligation, provided the primary sponsored person holds a Subclass 475 (Business (Long Stay)) visa, or their last substantive visa was a subclass 457 (Business (Long Stay)) visa and their annual earnings are equal to or greater than AUD 180,000.
9. Consultation was not necessary as, under section 18(1) of the Legislative Instruments Act 2003, the Instrument is of a minor or machinery nature and does not substantially alter existing arrangements.
10. The Office of Best Practice Regulation has advised that a Regulatory Impact Statement is not required (OBPR Ref 12611).
11. The Instrument, IMMI 11/041, commences on 1 July 2011.
Overview
The Migration Regulations 1994, as amended by the instrument F2011L01137, were enacted to address the need for periodic updates to income thresholds and annual earnings for temporary skilled migration. This legislative update was introduced to ensure that the income thresholds remain reflective of economic conditions, particularly in terms of wage growth and taxation rates. The enacting body for these regulations is the Australian government, and the policy objective is to maintain fair and competitive conditions for both local and migrant workers within the skilled migration framework. This regulation specifically targets the income threshold and annual earnings for temporary skilled migration, aligning these figures with economic indicators such as the Australian Bureau of Statistics Average Weekly Earnings data and the highest tax bracket under the Income Tax Rates Act 1986. By doing so, it aims to balance the needs of the economy with the requirements of skilled migrants, ensuring that the migration system supports economic growth while maintaining equitable standards for all workers.
Scope and Application
The Migration Regulations 1994, as amended by this instrument, primarily apply to temporary skilled migration under certain provisions, specifically paragraphs 2.72(10)(cc), 2.72(10AB) and paragraph 2.79(1A)(b) of Division 2.17 and Division 2.19 of Part 2A. The income threshold and annual earnings specified in this instrument directly influence the eligibility criteria for temporary skilled migrants who seek to enter Australia under a business sponsorship. The threshold income set at AUD 49,330, which is subject to annual indexation based on the Australian Bureau of Statistics Average Weekly Earnings data, ensures that the base rate of pay for Australian citizens or permanent residents is higher than that of temporary skilled migrants. Additionally, the annual earnings set at AUD 180,000 align with the highest taxable income bracket under the Income Tax Rates Act 1986, impacting the exemption criteria from certain employment obligations. This instrument revokes the previous threshold set in Instrument IMMI 10/037 and applies nationally across Australia, governing the conditions under which business sponsors can be exempt from ensuring equivalent terms and conditions of employment for sponsored primary persons.
Key Provisions
The legislative instrument IMMI 11/041, made under the Migration Regulations 1994, provides essential specifications for the temporary skilled migration income threshold and annual earnings. According to item (2), the temporary skilled migration income threshold is set at AUD 49,330 (section 2.72(10)(cc)). This threshold is intended to be adjusted annually in line with the Australian Bureau of Statistics Average Weekly Earnings data. It ensures that the base rate of pay offered to an Australian citizen or permanent resident is greater than this specified income threshold (section 2.72(10)(cc)).
Furthermore, item (3) specifies that the annual earnings threshold for certain conditions, as outlined in subregulation 2.72(10AB) and paragraph 2.79(1A)(b), is set at AUD 180,000 (sections 2.72(10AB) and 2.79(1A)(b)). This amount is consistent with the ordinary taxable income of a taxpayer who must pay the highest rate of tax under the Income Tax Rates Act 1986. The purpose of this specification is to align the migration regulations with tax requirements and ensure that the annual earnings of the primary sponsored person meet or exceed this threshold to exempt certain obligations.
Entities and individuals governed by these regulations must ensure that the income and earnings thresholds are met as specified. For example, under subregulation 2.72(10AB), if the annual earnings of the nominated person are equal to or greater than AUD 180,000, certain conditions do not apply (section 2.72(10AB)). Similarly, under paragraph 2.79(1A)(b), a primary business sponsor is exempt from the obligation to ensure equivalent terms and conditions of employment if the primary sponsored person holds or held a Subclass 457 visa and their annual earnings are equal to or greater than AUD 180,000 (section 2.79(1A)(b)).
Breach of these regulations could lead to various consequences. While the specific offences, penalties, and consequences are not detailed in the instrument itself, non-compliance with the specified income and earnings thresholds could result in administrative penalties, visa cancellations, or other legal actions as outlined in the Migration Act 1958 and associated regulations. Given that these income thresholds are critical for determining eligibility and exemptions, failure to adhere to them could have significant legal and administrative repercussions for those involved in the migration process.