Australia Introduces New Migration Reforms and Skilled Visa Processing Priorities

On 17 September 2026, Australia’s Minister for Home Affairs and Immigration announced the next stage of the Government’s migration program reforms, directed at reducing net overseas migration to 245,000 in 2026-27 and 225,000 from 2027-28. Net overseas migration for the year to March 2026 was reported at 292,100

The measures target temporary, demand-driven pathways, in particular student, graduate, visitor and working holiday visas, together with compliance action against unlawful non-citizens. No eligibility changes were announced to the employer-sponsored program (Subclasses 482, 186 and 494), however the processing priorities that had an immediate effect on processing outcomes from July, were broadened and replaced by two separate Directions, 121 and 122. These took effect 18 September 2026.

Access to skilled migration pathways has not been adversely affected by these reforms. Business sponsors can continue to use employer-sponsored and skilled visas to attract and retain global talent, and the Government has expressly linked the reforms to the labour needs of construction, health care, education and primary industries. Processing timeframes remain a practical challenge, as Ministerial Direction 121 currently places most offshore-lodged skilled applications at lower priority. The Government’s commitment to honour free trade and international trade obligations, and its stated intention to extend the order of priority of processing to a wider range of industries, are positive developments for employers.

Employers should review recruitment and assignment timelines that rely on working holiday, student, graduate or visitor pathways, and consider employer-sponsored alternatives where a longer-term need exists. It is important to lodge sponsored applications as early as possible, particularly where onshore lodgement is available, and confirm the visa status of any existing workforce engaged on temporary visas. Where roles fall within the expanded priority sectors, timing decisions should be revisited once the amended Ministerial Direction is published.

• Case Assessment has been re prioritised according to the new order, processing times have changed as a consequence while the Department of Home Affairs works on the backlog of cases generated by the July Directions.
• Processing times are inconsistentbut are expected to be more predictable, over time, once the processing priorities settle
• Specialist Skills pathway for SID 482 applicants have returned as an assessment priority. Applicant location is irrelevant to the assessment (may be on or offshore at time of lodgement of an application).
• Direction MD 119 removed the priority assessment benefit for Accredited Sponsors and has continued under the MD 121. This means, Accredited Sponsors will be subject to standard processing times unless applications slot into the new five tier structure.
• The defined prioritysectors are governed by the nominated occupation code against ANZSCO, not the sector alone.
• The effect on Regional applications continues. The standalone priority previously given to applications connected with designated regional areas is removed.

Second and third year Working Holiday visas will move to a ballot system with annual caps of 45,000 and 5,000 places respectively, compared with approximately 57,000 and 31,000 people who qualified in the current year. Existing regional work requirements are retained

United Kingdom passport holders remain exempt from these arrangements under the Australia-UK Free Trade Agreement

Delays are being experienced for primary Working Holiday applications

Condition 8503 (No Further Stay) will be imposed on all future Visitor visa grants, restricting onshore applications for most other visas. Current Visitor visa holders are not affected. The condition is expected to be added to Electronic Travel Authorities by the end of 2026

Most new Student and Graduate visa applicants will no longer be able to include family members. Exceptions are expected for postgraduate research (including PhD) candidates and certain Pacific and ASEAN nationals. Family members already holding a dependent visa retain their status

Course changes will be permitted only to a qualification at an equivalent or higher level, addressing repeat onshore applications described by the Government as “visa hopping”. Exemptions are limited

From 2 October, a student visa holder applying for a further student visa must generally apply offshore

Compliance capability will be expanded with approximately 100 additional compliance officers, 250 additional detention places and Australian Border Force field operations directed at an estimated 77,700 unlawful non-citizens

The Code of Conduct for registered migration agents will be amended so that agents who lodge or encourage non-genuine protection claims may be sanctioned or deregistered

Australia’s temporary skilled 482 visa program, enables employers to fill genuine skill shortages when suitably qualified Australian workers are unavailable. MD 121 assists to ensure that the skilled migration program is targeted to support key industries and strategically important occupations that are in Australia’s national interest

The Direction provides priority processing to occupations in relation to Construction, Healthcare, Teaching, Agriculture, Aquaculture, Fishing, and Resources sectors, and in Australia’s law enforcement and defence interests. It further prioritises highly skilled migrants who deliver significant economic benefits to Australia via the Specialist Skills stream. Priority in remaining sectors is afforded to primary applicants already contributing to Australia before all other applicants.

The Direction does not change the composition of the skilled migration occupation lists. Applicants must continue to meet the requirements set out in the Act and the Regulations in order to be granted a visa

Tier	MD121	Factors
1	Priority sectors, onshore or offshore	Determined by ANZSCO occupation in one of the following areas: Construction, Healthcare, Teaching, Agriculture, Aquaculture, Fishing, and Resources sectors, and in Australia’s law enforcement and defence interests (Priority Processing Occupations*)
2	Specialist Skills stream	Base salary of at least AUD$146,576
3	Other onshore applicants	Applicants who applied while physically in Australia
4	Offshore primary applicant, no combined family application	Applicants offshore where no family member is included
5	All other applications	All other applicants

Australia’s provisional and permanent skilled migration visa programs enable employers to attract migrant workers with the skills to make a positive contribution to the Australian community and economy. This Direction covers the following 10 Visa Subclasses

1	Employer Nomination Scheme (subclass 186)
2	Regional Sponsored Migration Scheme (subclass 187)
3	Skilled Independent (subclass 189)
4	Skilled Nominated (subclass 190)
5	Permanent Residence (Skilled Regional) (subclass 191)
6	Skilled Regional (Provisional) (subclass 489)
7	Skilled Work Regional (Provisional) (subclass 491)
8	Skilled Employer Sponsored Regional (Provisional) (subclass 494)
9	Skilled Regional (subclass 887)
10	Business Innovation and Investment (Permanent) (subclass 888)

Under this Direction, priority processing is given to occupations in relation to Construction, Healthcare, Teaching, Agriculture, Aquaculture, Fishing, and Reterests, ensuring the skilled migration program is targeted to support key industries and strategically important occupations that are in the national interest

Tier	MD122	Factors
1	Priority sectors, onshore or offshore	Determined by ANZSCO occupation in one of the following areas: Construction, Healthcare, Teaching, Agriculture, Aquaculture, Fishing, and Resources sectors, and in Australia’s law enforcement and defence interests (Priority Processing Occupations*)
2	All other visa applications where the applicant is a primary applicant who is in Australia at the time the application is made	Applicants who applied while physically in Australia
3	Offshore primary applicant, no combined family application	Single applicant
4	All other applications	All other applicants

This alert is intended for informational purposes only and does not constitute legal advice. Please contact Newland Chase directly for case-specific guidance

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Source: newlandchase.com