The Department of Home Affairs has announced that the Skilling Australians Fund (SAF) levy is to be introduced in the 1st Quarter of Financial Year 2018-19. From this date, it is expected that the existing Training Benchmark system will be removed. This will impact all existing Business Sponsors.
There is no official confirmation at this stage if compliance with the Training Benchmark system will be a requirement post-abolition but early indications suggest past compliance will cease to be a requirement.
Training Benchmark Obligations
The Training Benchmark system requires sponsors to demonstrate expenditure of:
- an amount equivalent to 2% of gross payroll towards a training fund, such as a donation to a TAFE college or University; or
- an amount equivalent to 1% of gross payroll on training Australian staff.
Existing sponsors are required to meet the Training Benchmarks either on the anniversary of their sponsorship or in each financial year. Many organisations have used financial year arrangements given their greater convenience. An explanation of the Benchmarks can be found here.
Background
Compliance with this requirement was necessary to obtain a further Standard Business Sponsorship for 457/482 visas or to sponsor staff for the Employer Nomination Scheme 186 Temporary Residency Transition stream.
An updated Training Benchmark B was released on 1 July 2017. This new Benchmark was much more restrictive than the previous Benchmark B and limited expenditure to a narrow set of areas.
Given the Department’s expressed intention to introduce the SAF Levy the new Benchmark B was not expected to have a major impact as the Department announced that there would be no assessment against a ‘part year’ and there was an intention to introduce the new SAF Levy before the end of the financial year 2017-18.
Obligation to meet Training Benchmark requirement in 2017-18 Financial Year
Businesses who have previously relied on the financial year to determine their Training Benchmark obligations may need to meet the Benchmark requirement in the 2017-18 financial year. This can be done using either the new Training Benchmark B requirements or through Training Benchmark A. All expenditure must be made prior to 1 July. If the sponsorship approval anniversary date falls in the second half of the calendar year, businesses may also opt to use this period which will allow more time or may mean no training compliance is required should the anniversary date be after the SAF levy implementation.
The Current Requirement
The table below shows three common scenarios where businesses had to consider or still need to consider the Training Benchmarks:
| Application/Obligation | Pre-18 March requirement | Current requirement |
|---|---|---|
| Application for a new Standard Business Sponsorship | Must demonstrate training benchmark compliance for approval | No requirement to demonstrate training expenditure but failure to comply with training benchmark may be considered as ‘adverse information’ |
| Application for Employer Nomination Scheme (186 visa) Nomination | Must demonstrate training benchmark compliance for approval | Must demonstrate training benchmark compliance for approval |
| Obligation to make training expenditure | Must demonstrate training benchmark compliance to satisfy obligation | Must demonstrate training benchmark compliance to satisfy obligation |
Get in touch
For any questions relating to the above and your business’ sponsorship obligations, please contact Roam Migration Law on 03 9044 9265.
