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Understanding the Skilling Australians Fund (SAF) Levy and Refund Scenarios

Dec 6, 2024 | AUS | 0 comments

Crystal Migration has been working with businesses navigating Australia’s skilled visa sponsorship for years. Often, there are lots of inquiries about the Skilling Australians Fund (SAF) levy, which is one crucial element that employers must pay when nominating an overseas skilled worker. 

This article explains what the SAF levy is, why it is required, and the limited circumstances in which employers may be eligible for a refund.

What is the SAF Levy?

The SAF levy is a training contribution charge that employers must pay when they nominate an overseas worker for a Temporary Skill Shortage (TSS 482), Employer Nomination Scheme (ENS 186), or other relevant visas (e.g 494 Visa).

  • Purpose: The levy supports the broader skills development of Australians by funding training initiatives, ensuring the local workforce benefits from improved opportunities.
  • Management: Funds collected through the SAF levy are managed by the Department of Employment and Workplace Relations (DEWR).
  • Calculation and Payment: The Department of Home Affairs calculates the levy amount based on the two factors – the annual turnover of the business and the number of the years for the sponsorship. The full payment must be made when the nomination is lodged.
  • Important Rule: Employers cannot pass this levy cost onto the visa applicant under any circumstances.

Since the SAF amount usually is a big portion of the total cost for sponsoring staff, the business owners are always keen to know if there will be any refund if the sponsoring events did not go well. 

SAF Levy Refund Scenarios

In most cases, the SAF levy is non-refundable once paid. However, there are specific scenarios where a refund (or partial refund) may be granted. Here are the circumstances:

  1. Visa Holder Does Not Commence Employment
    • If the nomination and visa are approved, but the overseas skilled worker does not arrive in Australia or fails to start employment, the employer may request a refund.
    • Example: the potential employee is overseas, but decided not to come in and give up the employment opportunity
  2. Visa Refused on Health or Character Grounds
    • If the Department of Home Affairs refuses the visa application based on the worker’s health or character, the SAF levy may be refunded.
    • Example – The nomination was approved, but the employee’s Visa application was refused based on providing false information (failed to meet the character requirement)
  3. Incorrect Information Provided in the Nomination
    • If the employer withdraws the nomination due to errors in the details provided (e.g., incorrect turnover or proposed employment period), a refund can be requested.
  4. Withdrawal Before Labour Agreement is Finalized
    • For employers in the labour agreement stream, withdrawing the nomination before entering the agreement can make them eligible for a refund.
  5. Visa Holder Leaves Early
    • For TSS or SESR visa holders who leave the employer within the first 12 months of employment (and the visa duration exceeds 12 months), employers may be eligible for a partial refund for unused years of the SAF levy.
    • Example – the employee got granted a 3-year 482 Visa but left the business after 6 months after the grant. The business then can get a refund for the remaining 2 years’ SAF levy amount. 
    • Note: This does not apply to ENS (186) or RSMS (494) visa holders who leave employment early.
  6. Concurrent Sponsorship Refused or Withdrawn
    • If the nomination application is withdrawn due to a concurrent sponsorship application being refused or withdrawn, a refund may be available.
  7. Stream or Occupation Errors in Nomination
    • If the nomination is withdrawn because the employer selected the wrong stream or occupation (e.g., ENS TRT, SESR), a refund may be issued.

What Employers Need to Know About Refunds

  • Refunds are not automatic and must be applied for with evidence supporting the claim.
  • The Department of Home Affairs reviews refund applications on a case-by-case basis.
  • Employers should carefully review nomination details before lodging applications to avoid unnecessary costs or errors.

Conclusion

The SAF levy plays an essential role in fostering Australian workforce development while enabling businesses to meet their skilled labor needs. However, employers must be aware of their obligations and the limited situations in which refunds may be granted. By understanding these rules, businesses can plan their workforce strategies effectively and avoid unnecessary financial losses.

If you have any questions about the SAF levy or your obligations as an employer, feel free to contact me for expert guidance. Together, we can navigate these requirements smoothly and efficiently.