Australia Points Test Reform: Review and Proposed Changes

For many skilled migrants, the points test decides whether a pathway to permanent residence is realistic or out of reach. Australia’s Points Test Reform has become an important topic because the Australian government has questioned whether the current system selects the right people.

In April 2024, the government released a discussion paper titled Review of the Points Test. It describes how the test works today, explains the problems it has identified, and raises questions about possible changes.

These are proposals and consultation questions. They are not confirmed law. This article explains the current settings, the concerns raised, and the reform ideas under consideration, so you can see clearly what is known and what is still being discussed.

Key Takeaways

• The April 2024 discussion paper is a consultation document. It outlines challenges, reform directions, and questions. It is not a final policy.
• The review is about who is selected for permanent residence through the skilled program. It is not about the size of the program.
• Under the current settings described in the paper, the points-tested visas are subclass 189, subclass 190, and subclass 491.
• The paper describes eligibility as a qualification and relevant experience in a listed occupation, competent English, being under 45, and at least 65 points. The total points available are 145.
• The paper says the current test may not separate candidates well, may add to permanent temporariness, and may not reflect education and English outcomes strongly enough.
• Areas under consideration include employment outcomes, education and English, work experience, skills needs, younger migrants, and partner skills.
• The paper discusses age, partner skills, and transition arrangements but does not set new points allocations.
• The paper supports regular review of the test but does not set a review timetable.

What Is the Australia Points Test?

The Australia points test is a system that gives points to a person’s characteristics, such as age, qualifications, skills, and English language proficiency. It then ranks prospective migrants by their overall points.

For skilled migrants, it plays a major role in how they compete for a place in Australia’s points-tested visa programs. The discussion paper describes it as perhaps the most important part of the permanent skilled migration system. It notes that some two-thirds of the permanent skilled intake occurs through points-tested visa programs.

Australia has used a points test since 1979. The paper says the last major change was in 2012.

The paper also explains that points-tested visas provide a permanent visa pathway for migrants who may not have a job in Australia and are therefore not eligible for employer sponsorship. Employer sponsorship is designed to meet immediate labor market needs. The points test is positioned as a complement to it.

Why Is Australia Reviewing the Points Test?

The review follows the Migration Strategy, released on 11 December 2023. The strategy named a reformed points test as an area for future reform. It also drew on the independent review of the Migration System, which found the test is not designed to identify applicants with the best potential to contribute to Australia over the long term.

The discussion paper says a reformed points test should:

• Focus on characteristics associated with migrants successfully finding skilled work
• Avoid driving permanent temporariness and give migrants greater certainty about their prospects for permanent residence
• Better target the skills Australia needs now and in the future
• Reflect that younger migrants will spend more years contributing to Australian workplaces
• Better recognize the potential contributions of partners

The paper makes clear that this is not a review of the size of the permanent program. It focuses on who becomes a permanent resident through the skilled migration program. It also does not address the family or humanitarian migration programs.

For readers following the Australia points test review, this is the key starting point. The question is not how many people migrate. It is how they are selected.

Which Visas Currently Use the Points Test?

According to the discussion paper, the points test currently underpins three visas. The figures below are the 2023 to 24 planning levels and settings the paper reports.

Skilled Independent Visa Subclass 189

The paper lists a planning level of 30,375 for 2023 to 24. Its current selection priorities are healthcare and teaching occupations, then ranked selection.

The paper lists 212 eligible occupations, an age limit of 45, and a minimum English requirement of Competent, which is IELTS 6 or equivalent.

Skilled Nominated Visa Subclass 190

The paper lists a planning level of 30,400 and a current selection priority of state and territory nomination. It lists 427 eligible occupations, an age limit of 45, and a minimum English requirement of Competent.

Applicants need a nomination from a state or territory government. The paper notes that states and territories set their own requirements. Examples include their own priority occupation lists, prioritizing graduates from local universities, or requiring a commitment to reside in the state or territory.

Skilled Work Regional Provisional Visa Subclass 491

The paper lists a planning level of 32,300. This figure includes the Skilled Work Regional (Provisional) visa and the Skilled Employer Sponsored Regional (Provisional) visa.

The current selection priority is state and territory nomination. The paper lists 504 eligible occupations, an age limit of 45, and a minimum English requirement of Competent.

Readers can find current visa requirements on the Department of Home Affairs website, which remains the official source for visa settings.

How Does the Current Points Test Work?

It helps to separate two ideas: eligibility and ranking.

To be eligible for a points-tested visa, the paper says a migrant needs:

• A qualification and relevant experience related to a job on an occupation list
• Competent English
• To be below the age limit of 45
• At least 65 points

Meeting these requirements does not guarantee a visa. The paper explains that prospective migrants submit an expression of interest and are then invited to apply. Invitations are based on a variety of criteria, such as having an occupation in a priority occupation, scoring highly on the points test, or receiving a state or territory nomination.

The paper also notes that applications are typically considered within an occupation. For that reason, higher raw points are not the sole determinant of an invitation to apply.

Current Points Test Criteria

The paper sets out the current points allocation in a table. The total available is 145 points. The sections below explain each criterion as the paper describes it.

Age

Age can provide between 15 and 30 points for individuals aged between 18 and 45 years. This is the largest single category, with a maximum of 30 points.

Skilled Work Experience

This category provides between 0 and 20 points for years of experience. Experience in Australia is weighted more heavily than overseas experience.

Education

Education provides between 0 and 20 points for the highest level of qualification. The paper gives examples: a PhD earns 20 points, a Bachelor’s degree earns 15 points, and a trade qualification earns 10 points.

English Proficiency

English proficiency provides 0 to 20 points according to the level of language proficiency. Points are awarded to migrants who must have at least competent English, which is IELTS 6 or above. Proficient English, which is IELTS 7, receives 10 points. Superior English, which is IELTS 8, receives 20 points.

Partner Skills

Up to 10 points are available for partners. The paper explains that 10 points are available for partners who speak competent English and have assessed skills on the same occupation list as the applicant. Five points are available for partners who speak competent English but do not have skills on an occupation list, or whose skills were unassessed.

Applicants without a recognized partner or with an Australian partner receive 10 points.

Australian Study

Five points are available for holding a degree, diploma, or trade qualification from an Australian institution.

Specialist Education

Ten points are available for an Australian doctorate or master’s research qualification in science, technology, engineering, and Mathematics, known as STEM.

Professional Year

Five points are available for completing a year of professional training in Australia. The paper says this is only available to graduates in accounting, engineering, and ICT.

Regional Study

Five points are available for Australian study outside Sydney, Melbourne, and Brisbane.

Credentialled Community Language

Five points are available for accredited language proficiency at a specified level. Migrants must apply through the National Accreditation Authority for Translators and Interpreters.

State or Territory Nomination

This category applies to Skilled Nominated and Regional Skilled Work Provisional visas only. The paper says 5 points are given for nomination by a state or territory government for the Skilled Nominated visa. For the Regional Skilled Work Provisional visa, 15 points are given for a regional nomination by a state or territory government, or where a family member sponsorship has been accepted by the minister.

What Are the Problems With the Current Points Test?

The discussion paper does not say the test has no value. It acknowledges that education, English language skills, and experience are important predictors of labor market success. The concern is that the test does not always reward those factors in the right way.

The test may not separate candidates well

The paper quotes the Migration Review, which said the test is not sufficiently calibrated to distinguish between candidates. Many applicants score the maximum points on the core criteria of skills, age and English proficiency. That leaves criteria of less obvious benefit, such as regional study and community language skills, to become the main factors that determine individual rankings.

Extra points may add to permanent temporariness

Many of these additional points are only available in Australia. The paper says this contributes to a growing group of permanently temporary migrants who remain in Australia trying to increase their points. Not all will be successful, and collecting extra points one after another can add years to a period of temporary residence.

The paper adds that these extra criteria make the test more complex and send confusing signals about what migrants should do to improve their chances.

The Professional Year is questioned

The paper notes that some experts question whether professional year programs improve labor market outcomes and that they can be expensive. It cites costs ranging from $8,500 to $15,000. Under the current test, a professional year and one to three years of local work experience are awarded the same number of points.

The paper gives an example. An international student who works for up to three years in an area of skill need after graduating gets 5 points. That is the same as a student who returns to study for two years in a regional area, or who pays to complete a professional year.

Education points may not reflect outcomes

The paper cites research showing that PhD graduates are more likely to be employed than bachelor graduates and that migrants with a PhD earn 20 per cent more over 10 years than migrants with a bachelor’s degree. Yet a PhD earns only 5 more points than a bachelor’s degree. The paper says that gap can easily be bridged by a professional year or regional study, which are worth 5 points each.

English language skills influence outcomes

The paper cites Australian National University research showing that, over 10 years, points tested migrants who report speaking English very well earn some 30 per cent more than those who report speaking English not well.

Work experience can create other risks

The paper says giving more points for a longer Australian experience could encourage migrants with limited prospects to prolong their stay. It also says this can make temporary skilled visa holders more vulnerable to exploitation if they stay with an employer who refuses to sponsor them in the hope of increasing their points.

Occupation lists and skills outcomes

The paper says occupation lists have historically been slow to change and respond to shifts in the labour market. It also notes that the points test does not require a job offer. It cites a figure that nearly a quarter of skilled migrants work in a job below their skill level.

Age points have sharp steps

The Migration Review considered that the Australian approach to age was not sufficiently nuanced, with significant cliffs between ages. The paper gives the example of the step between age 39 and age 40.

Partner points are limited

With a maximum of 10 of the 145 points available, the paper says even a skilled and qualified partner can contribute only a small fraction of the total points available to the primary applicant.

What Changes Are Being Considered Under the Points Test Review?

The discussion paper does not announce final reforms. It outlines key challenges, suggests reform directions, and asks questions on which the Government sought feedback through submissions.

The areas below are being considered. None should be read as confirmed changes.

Better Recognition of Skilled Employment Outcomes

The paper says a reformed test should prioritise characteristics that best predict a migrant’s capacity to find skilled work in Australia. Question One asks which criteria should be included or removed, whether weightings should change, and how points within criteria should be structured.

It also asks what the minimum eligibility requirements should be. One example it raises is whether an onshore migrant should be required to have a skilled job in order to apply for a points-tested visa. This is a question, not a proposal that has been adopted.

Greater Focus on Education and English

The paper’s discussion of education and English language skills points to a possible greater emphasis on both. It links them to employment, income, settlement and a lower likelihood of exploitation. Question One covers how weightings and points within criteria could change, without setting any new figures.

Better Recognition of Work Experience

The paper asks how the test should account for experience, how it should reflect the quality of experience, and how domestic and international experience should be treated.

It describes a balance. Overseas experience can bring fresh perspectives and innovation. Local experience in skilled work has proven to be a strong predictor of success over decades. The paper also raises concern about points for long periods of Australian experience contributing to permanent temporariness.

Targeting Australia’s Current and Future Skills Needs

The paper asks whether occupation lists are an appropriate way to target skills and how Australia can identify its long-term skills needs. This is covered in more detail later in this article.

Greater Focus on Younger Migrants

The paper asks how points for age should be redesigned to better select younger migrants. The next section explains the reasoning.

Greater Recognition of Partner Skills

The paper says there is an opportunity for a greater emphasis on partner characteristics associated with labour market success. It asks how partner points should be designed. A later section explains this further.

How Could Age Be Treated Under a Reformed Points Test?

Age is already the largest single category, but the paper argues the points do not reflect how age connects to the benefits Australia receives. These include budget impacts, delaying the effects of an aging population, and identifying migrants who will contribute most over their lives.

The paper links this to workforce trends. It cites the Intergenerational Report, which projects the overall participation rate to decline gradually from 66.6 per cent in the 2022 to 23 financial year to 63.8 per cent by the 2062 to 63 financial year. Young migrants spend more of their working lives in Australia.

The paper also cites Treasury modelling. A person who arrives at 30 and earns half as much as someone who arrives at 50 is said to have the same impact on government budgets over their lifetime.

The discussion paper points to Canada as a contrast. Canada provides the largest number of points at a sweet spot of early career migrants, and uses a sliding scale for younger and older migrants. This avoids the large jumps seen in the Australian approach.

The paper is careful on one point. A migrant’s fiscal contribution should not be the only, or even the primary, factor in deciding who becomes a permanent resident. It says that view would be one-dimensional.

Question Three asks how the points allocated to age should be redesigned. No new age points have been set out in the paper.

How Could the Points Test Better Target Australia’s Future Skills Needs?

The paper says occupation lists aim to ensure migrants bring skills in identified areas of need. However, it says these lists have been slow to change. It also describes how skills targeting influences behaviour.

It cites the 2022 International Student Experience Survey, which found almost 70 per cent of students rated the possibility of migrating permanently as an extremely important reason for choosing to study in Australia. The paper concludes it is reasonable to think many aspiring migrants consider the occupation list when choosing what to study.

It gives accounting as an example. The number of expressions of interest for a points-tested visa submitted by qualified accountants in 2019 and 2020 was equivalent to roughly one-fourth of the total number of accountants employed in Australia today. The paper adds that occupation ceilings apply to certain occupations.

On future needs, the paper says the challenge is to target transferable skills, where migrants can change jobs as needs evolve. It also points to skills where demand is expected to continue to grow, such as health care for an ageing population, and digital technology.

The paper also accepts a limit. Many barriers to skilled work, such as discrimination, registration requirements, and qualification recognition, cannot be solved by reforming the points test. It adds that migration should complement the domestic skills and training system.

Question Two asks whether occupation lists are an appropriate way to target skills, what should be considered in compiling them, and how long-term skills needs can best be identified.

How Could Points Test Reforms Affect Existing Migrants?

This is a question many readers will care about most. The discussion paper recognizes that many migrants make major life decisions based on their prospects for permanent residence, including where to live, what to study, and where to work.

It says reforms should try, where possible, to honour those decisions and give migrants certainty that their choices are not in vain. It also says this must be weighed against fairness and certainty for migrants who may be better off under a reformed points test.

The paper gives a sense of scale. At the beginning of the 2023 to 24 program year, there were around 80,000 expressions of interest from unique individuals seeking to migrate through the Skilled Independent visa subclass 189.

The paper does not set out specific transition rules. Question Six simply asks how transition arrangements for the points test reforms should work. Any real effect on individual migrants will depend on decisions that are not set out in the paper.

Will the Points Test Be Reviewed Regularly?

The paper says reforms to the points test should not be set and forget. It says the test should be regularly reviewed to confirm it continues to meet its objectives.

It gives several reasons. Reviews can help the test reflect Australia’s changing needs and a changing international environment. They can make sure it reflects the latest research and data on which characteristics are linked to migrants finding skilled work. They also allow lessons from past reforms and international experiences to be included.

Question Seven asks how regularly the points test should be reviewed, and what those reviews should consider. The paper does not set a review timetable.

Frequently Asked Questions

Need Help With Your Skilled Migration Options?

Australia’s points test can play an important role in skilled migration, and proposed reforms may affect how applicants are assessed in the future. Understanding your current points position, visa options and eligibility requirements can help you make informed decisions before changing your study, work or migration plans.

Book Confidential Consultation with Ghothane Lawyers to discuss your skilled migration options, assess your current points position and understand how the current rules and proposed points test reforms may affect your pathway to permanent residence.