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Review of skilled migration points test

The Minister for Immigration and Multicultural Affairs, Philip Ruddock, announced today that copies of the discussion paper on the review of the points test, used to assess Independent and Skilled - Australian Linked visa categories, are now available.

"A review of the points test used to assess skilled migrants is being conducted to ensure we select skilled migrants who will make the greatest net economic contribution to Australia," Mr Ruddock said.

"The Independent and Skilled - Australian Linked visa categories are extremely important to Australia's future as the people will make a long-term addition to Australia's skills base and society.

"Applicants entering under these categories are generally under 40 years of age, highly skilled and with English language ability. These are important factors in enhancing the contribution migrants can make to Australia."

The Minister said that a thorough review of the Independent and Skilled - Australian Linked visa categories points test is timely.

The current version of the test was initially established in 1989 after a report of the Committee to Advise on Australia's Immigration Policies, which undertook its deliberations in 1987 and 1988.

Mr Ruddock announced the availability of the discussion paper following his first meeting today in Canberra with the External Reference Group and Departmental officers undertaking the review.

The External Reference Group is chaired by Mr Roger Shipton, principal of Shipton Consulting Group Members of the Group are:

. Mr Joseph Assaf, Managing Director of Ethnic Communications Pty Ltd in Sydney;

. Ms Sally Webster, a lawyer with Global Immigration Services in Melbourne;

. Mr Michael Costa, Assistant Secretary, Labour Council of NSW; and

. Mr Robert Gerard of Gerard Industries in Adelaide.

Copies of the paper can be obtained by phoning 02 6264 1135 or by faxing 02 6264 1399. A copy of the Executive Summary of the report will be available on the Department of Immigration and Multicultural Affairs' home page,

Media Enquiries: Steve Ingram, 02 6277 7860


Chapter 1: Introduction

The Independent and Skilled-Australian Linked Categories

The Independent and Skilled-Australian Linked (formerly Concessional Family) categories are the largest component of the skilled stream of the Migration program. Selection under these categories is based on a points test introduced in 1989 in response to the recommendations of the Committee to Advise on Australia's Immigration Policies (CAAIP). The Committee was strongly of the view that the skill levels of the migration program were critical if immigration was to contribute to enhanced economic performance and improvements in living standards in the longer term.

Based on the comments of the current and past Ministers for Immigration, the objective of the Independent and Skilled-Australian Linked categories is to select young, highly skilled and readily employable migrants who would quickly make a positive contribution to Australia's economic development.

The Review

While adjustments have been made to the points test since its introduction, it has not been subject to a thorough evaluation. The Review will examine the effectiveness of the points test in selecting migrants who best meet the objectives of the categories. The efficiency of the points test will also be evaluated.

The Review will be undertaken by officials from the Department of Immigration and Multicultural Affairs (DIMA) supported by an External Reference Group chaired by Mr Roger Skipton. DIMA will report to the Minister on the findings and recommendations of the Review in March 1998.

Chapter 2: Overview

Skilled migration prior to the current points tested categories

During the 1980s, the Government introduced a number of migration categories to provide greater focus on the skills of migrants to Australia. These included the Occupations in Demand category which was later replaced by the Occupational Shares System. The intention of these categories was to target skilled migration to medium-term labour market needs. However, factors such as the long lead times associated with migration processing, the dynamic nature of the labour market, the failure to match the location of the shortage with the settlement location of the migrant and the non-identification of the extent of the shortage in any particular occupation all inhibited the desired matching of skills.

The Current Points Test

The current points test was developed by the National Population Council based on a model proposed by CAAIP. It was based on a numerical rating system with the size of the program to be managed by use of an adjustable "pass mark".

Since its introduction, the most significant modifications to the points test have been the adoption of the Occupations Requiring English list, changes to pass and pool marks, the introduction of points for English in the Skilled-Australian Linked category and the use of an objective English language test.

Recent Changes

The Coalition Government has taken a number of steps to enhance the skill level and employability of migrants under these categories in response to concerns about unemployment rates experienced by these migrants, particularly those entering under the former Concessional Family category. The pass mark for both categories has been raised to an unprecedented high of 115 points. Consequently, applicants have been required to demonstrate a higher level of skill or a stronger employment history or be significantly younger to be eligible for a visa. Other changes recognise the important role English language skills play in a migrant's ability to gain employment. Since 1 July 1997, Skilled-Australian Linked applicants have been able to be awarded points for their English skills and the ORE list has been expanded to cover approximately 80% of occupations.

Program Size

The level of migration under the Independent and Skilled-Australian Linked categories has varied with the size of the Migration Program. In 1997-98, it is planned that 68,000 migrants will enter Australia under the Migration (Non-Humanitarian) Program including 14,700 Independent and 8,000 Skilled-Australian Linked migrants. These categories therefore account for over 30% of the Migration Program and approximately 65% of the Skilled Stream.

Source Countries

There has been relatively little change in the key source countries for migrants under these categories since 1989. For both categories, the United Kingdom has remained the single largest source of migrants. Hong Kong, India and the Philippines have also been important sources, with interest from the People's Republic of China and South Africa increasing in recent years.

Occupational Profile

In recent years there has been relatively little variation in the most frequently occurring occupations under these categories. For both categories, the most commonly held occupation has been that of computing professional. A large number of accountants, nurses and school teachers have also entered Australia under both categories.

Chapter 3: Operation of the Categories

In order to be eligible for migration, applicants under both categories must meet the points test, be of working age and, where their occupation is on the Occupations Requiring English (ORE) list, demonstrate a high degree of English language proficiency. Skilled-Australian Linked applicants must also be sponsored by an Australian relative.

Under the points test, Independent applicants are awarded points for their skill (up to 70 points), age (up to 30 points) and English language ability (up to 20 points). In addition to these factors, Skilled-Australian Linked applicants are able to be awarded points for their relationship to the sponsor (up to 15 points) and the citizenship (up to 10 points), settlement (up to 10 points) and location of the sponsor (up to 5 points). The pass mark for both categories is 115 points.

Applications for the Independent and Skilled-Australian Linked subclasses are assessed by DIMA officers, including locally engaged staff, at Australian missions overseas. The first step in assessing an application is the determination of the applicant's usual occupation. This is relevant both to the assessment of the applicant's skills and identification of whether their occupation is on the ORE. The decision-maker then identifies the relevant authority for skills assessment in relation to that occupation. Presently, up to 70% of skills assessments are completed by DIMA officers. Other assessments may be performed by the National Office of Overseas Skills Recognition (NOOSR), Trades Recognition Australia (TRA) or a range of professional and industry bodies. The relevant assessing authority determines whether the applicant's qualifications and experience meet the Australian standard for their occupation.

An applicant's English language proficiency is assessed for the purposes of points allocation under the language factor of the points test and, where their occupation is on the ORE, to determine whether they have vocational English. English language skills are assessed on the basis of either educational qualifications, where the medium of instruction was English, or performance in an English test.

Once all assessments have been made, the applicant is awarded points for each of the factors of the points test. If the applicant meets the prevailing pass mark, their application will be processed against other requirements such as health and character. Applications that meet the pool mark but not the passmark are held in reserve for up to 12 months and may be removed from the pool and further processed if a new, lower pass mark is set during that period.

Chapter 4: The Economic Impact of Independent and Skilled-Australian Linked Migrants

The Review will evaluate the effectiveness of the points test in selecting migrants who meet the objectives of the Independent and Skilled-Australian Linked categories. The overarching objective of the categories is to select migrants who will be of net economic benefit to Australia. This has been articulated and re-iterated by successive Ministers and commentators.

The objective of these categories suggests that selected migrants should contribute to broad economic goals such as:

. per capita economic growth;

. job creation;

. enhanced international competitiveness; and

. a positive Budget outcome.

The Review will examine whether the identified objectives and indicators for the categories are still appropriate and will assess performance against these indicators.

Per Capita Economic Growth

Migrants can potentially contribute to per capita economic growth in two main ways:

. by adding to Australia's productive capacity through the human and financial capital they bring; and

. by increasing demand through the goods and services they purchase.

There is considerable research which suggest that skilled migrants are more likely to make a positive contribution than less skilled migrants.

In terms of adding to Australia's productive capacity, a key indicator is the speed with which new migrants obtain employment. Employment data from the Longitudinal Survey of Immigrants (LSIA) indicates that migrants under all categories experience some difficulty gaining employment within the first few months of arrival in Australia. However, 18 months after arrival, unemployment rates for Independent migrants had fallen to the relatively low level of 11%, with a participation rate of around 90%. The experience of migrants in the former Concessional Family category was less positive. The unemployment rate in this category 18 months after arrival was 19%, similar to that faced by Preferential Family migrants who were selected solely on the basis of their family relationship.

Job Creation

CAAIP was of the view that increases in productivity and economic growth had 'multiplier effects' which lead to job creation. Highly skilled migrants are also able to contribute to job creation through increased consumer demand. Data from the LSIA indicates that points tested migrants have higher incomes and expenditure patterns than migrants entering under the Family and Humanitarian streams.

Enhanced International Competitiveness

Skilled migrants can contribute to Australia's international competitiveness through the utilisation of the diversity of language and cultural skills they bring to Australia. Reports such as the 1995 report of the Industry Taskforce on Leadership and Management Skills ('The Karpin Report') have recognised the benefits to Australian business of the language and negotiation skills, cultural and market knowledge and business networks of skilled migrants.

A Positive Budget Outcome

A further objective of the points test is to select migrants who will make a positive contribution to the Commonwealth Budget or at least will not have a negative impact. Data from the LSIA has been used to estimate the short term impact of migrants entering under different categories. The results indicate that Independent migrants have a positive impact from their first year of arrival. Concessional Family migrants had a negative impact on the Budget in the first year after arrival but improved after that. Recent changes to this category (now re-named Skilled- - Australian Linked category) should help reduce the negative impact in the first year.

Chapter 5: Desired Attributes of Independent and Skilled-Australian Linked Migrants

Given the economic focus of these categories, the ideal points tested migrants might be expected to:

. obtain a job soon after arrival that uses their skills and experience;

. bring fresh ideas and approaches to the job;

. have a lengthy working life;

. assist with international contacts and networks;

. become quickly established in the community;

. not require social welfare or support;

. and inject capital into the economy.

A key issue for the Review is whether these are the correct expectations of the ideal Independent and Skilled-Australian Linked migrant. If so, the Review will also look at the degree to which these migrants have, in the past, met these expectations; what aspects of the points test have contributed most to the realisation of these expectations and how the test could be improved to deliver on these expectations more effectively.

The key expectation of points tested migrants is that they be highly employable. The employability factors of the points test are skill, age and English language ability. Issues for the Review will be whether the degree of emphasis on these factors is correct or whether they should be adjusted.


The greatest weighting in the points test is given to the skill factor. This factor is intended to select migrants who are highly skilled and readily able to gain employment in their pre- migIation occupation or which utilises their skills. The level of points an applicant may score is determined by the level of qualification required to work in their usual occupation in Australia and whether they hold skills that meet the Australian standard for that occupation.

LSIA data shows that 60% of Independent and 47% of Concessional Family migrants who had gained employment were employed in the same occupation as in their former home country. The data also indicates that Independent immigrants have been significantly more successful than Concessional family arrivals in obtaining employment which utilises their skills. A much larger proportion of Concessional Family migrants have only been able to find employment in low and unskilled occupations.

The points tested categories are intended to select people from a diversity of occupational and employment backgrounds who are able to supplement the skill level of the Australian labour force. Ideally, they would also assist in overcoming skill shortages in the Australian labour market.

Attempts have previously been made to address labour market shortages through these categories and their predecessors. However, because of concerns about the accuracy of quantitative data available on occupational shortages, the highly regional nature of skill shortages in Australia and the long lead times between the identification of occupational shortages and the processing and arrival in Australia of migrants with these skills, the mechanisms used have not been regarded as being wholly effective.

The Review will examine whether the points tested categories should take greater account of the labour market situation (both undersupply and oversupply of skills) for particular occupations and, if so, what options are available for greater targeting.


The Australian economy benefits most from selecting migrants in their early working years. On a lifetime basis, this maximises an individual's contribution to the economy and more than offsets the costs of old age. Under the age factor, greatest points are awarded to younger applicants. Applicants must also be of working age (defined as under 65 for men and under 60 for women) in order to be eligible for a visa. Departmental data indicates that the great majority of points tested migrants are under 35 years of age.

The LSIA provides data on the labour market experience of migrants in various age groups. This data shows that the proportion of migrants unable to find work increased with age and that more than 60% of those aged over 55 years were unable to gain employment.


LSIA data on employment outcomes according to Independent and former Concessional Family migrants' assessment of their English language ability indicates that a close correlation exists between the level of their English language ability and their ability to gain employment. Information from the LSIA also indicates that former Concessional Family migrants regard their English language difficulties as the main problem faced in obtaining employment.

Possible Additional Factors

A number of possible additional factors that may enhance the employability and economic impact of points tested have been suggested, including bonus points for links with Australia, spouse skills and high levels of settlement capital. The Review will consider the appropriateness of including such factors in the points test.

Sponsorship Factors under the Skilled-Australian Linked category

Skilled-Australian Linked applicants are able to be awarded up to 40 additional points on the basis of the family relationship. The availability of these points is intended to recognise the assistance Australian family members are able to provide in the settlement of newly arrived migrants. However, the points available in relation to these factors has the effect of lowering the employability requirements under this category. The Review will examine whether the overall level of points awarded on the basis of family relationship are appropriate given the economic objectives of the categories.

Access to Social Security Benefits

Independent and Skilled-Australian Linked migrants are subject to a two year waiting period before they can access social security benefits. The Review will examine the possible strengthening of measures for ensuring that these migrants are able to support themselves and their families if they are unable to gain employment within the first two years of arriving in Australia.

Chapter 6: The Operational Efficiency of the Points Test

The Review will examine the operational efficiency of the points test in delivering a service to clients that is cost effective for both clients and Government, timely and results in lawful and equitable decisions. Indicators that the administration of the points test is meeting these objectives include:

. reduced costs to the Department and to clients;

. reduced processing times and pipelines;

. increased approval rates as a result of better informed applicants;

. increased client satisfaction; and

. a reduction in the number of applications overturned on review.

The indicators suggest that the ideal processing of a case might involve a well informed client who is able to accurately conduct a self-assessment on their likelihood of success. The client would be able to provide all necessary documentation and information, including a skills assessment, when they lodge their application.

The Review will consider whether these are the right indicators and the right features of the ideal points-tested case. It will also consider performance against each of the suggested indicators.

Pre-application Skills Assessment

DIMA has been trialing a pre-application skills assessment scheme (PASA) which allows prospective applicants to seek a skills assessment before deciding whether to lodge a migration application. The scheme is intended to result in better informed applicants, higher approval rates and reduced processing times. The take-up rate for PASA has, to date, been relatively low. The Review will look at options for increasing use of PASA.

Assessment Arrangements

The Review will also examine issues relating to the assessment arrangements for aspects of the points test, including the assessment of an applicant's usual occupation, of their skills and of their English language proficiency.