General Skilled Migration (GSM) cap and cease strikes again!

A migration agent will tell you that the profession has its challenges. Sometimes, it is because they have to explain government policy to affected clients and deal with the subsequent emotional trauma after telling them bad news.

As part of the Department of Immigration and Border Protection (DIBP) powers, the Minister can determine the number of visas for most visa subclasses that can be granted in any given programme year. These powers assist the government in providing certainty on how a pipeline of that subclass can be adequately managed. In general, any leftover applications in any given year are queued, processed, and hopefully granted the following year. Aside from this mechanic of “capping and queuing”, the DIBP also has the power to cap and cease, meaning once a visa limit has been reached, no more visas of that subclass will be processed…ever.

On 22 September 2015, a new instrument came into effect that capped and ceased a number of offshore GSM visa applications for subclasses that were validly lodged and awaiting processing. The DIBP set a number of visas that can be granted in the current programme year (1 July 2015 to 30 June 2016) for the following:

• Subclass 175 Skilled – Independent visa: 219 visas
• Subclass 176 Skilled – Sponsored visa: 36 visas
• Subclass 475 Skilled – Regional Sponsored visa: 29 visas

As all of these visa subclasses were repealed when the new SkillSelect visas (subclasses: 189, 190 and 489 visas) were available on 1 July 2012, this has the effect of capping and ceasing.

Obviously due to the date these subclasses closed, any affected visa applicants will have waited years for this visa to be processed. So what happens to the applications that were in the pipeline and will now not be processed? Well, any application affected is considered to have never been made. When this happens, the visa applicant is entitled to a refund of any visa application fee paid to the DIBP at that time, and the DIBP will be contacting these applicants in due course to facilitate this refund. All other fees that may have been paid in association with these applications, such as skill assessments, medicals, etc., will not be refundable.

This has not been the first time the GSM programme has been affected by cap and cease provisions. Migration agents with long memories will tell of similar times. Sadly, many agents may find it hard to explain to a client that they appeared to be eligible for a visa, but will now not even be entitled to have that application assessed at all. Unfortunately, those applicants that are affected will need to re-evaluate their options, and apply for current visas and under current migration law.

The rationale behind this move from the DIBP as reported in the media is that these occupations are no longer in demand. GSM visas have fallen out of favour rather quickly and there is good reason why: GSM visas do not make economic sense when compared to demand driven migration through employer sponsored visas. GSM visa holders may be skilled in their nominated occupation, however, they are not required to work in their occupation once they arrive in Australia, and some possibly never will depending on the labour market conditions for their occupation: think of the current resource downturn and the GFC's effect on the availability of relevant occupations in Australia. Naturally, this would leave inefficiencies in matching the skills of the visa holder to their occupation in Australia’s labour market. The reason why employer sponsored visas are more economically viable is because the visa holder “hits the ground running” by working in their skilled occupation and contributing to society from day one through, at the very least, their taxable income.

The ballooning use of employer sponsored visas may be seen as a result of the considerable narrowing of the Skilled Occupation List back on 8 February 2010, which has maintained far fewer occupations to be eligible for certain GSM visas under the new SkillSelect model.

Should people fear the capping and ceasing provisions in the future? In general, no. Such actions are no doubt detrimental to the confidence overseas nationals would place in Australia's visa programme.