30 Oct 2015

Important Facts Every 457 Visa Holder Should Know

If you’re thinking of moving to Australia, you may be able to gain sponsorship as a temporary skilled worker. Overseas employees who work in Australia can enjoy the culture and lifestyle (not to mention the weather) via sponsorship on the 457 visa program or the Temporary Work (skilled) visa (subclass 457). However, there are some important requirements to adhere to. While an approved sponsor can enjoy unlimited nominations for a number of skilled positions, an employee under 457 visa must first comply with the health insurance requirements before they can see their career plans through.

The Department For Immigration and Border Patrol strictly requires 457 visa applicants to have health insurance in order to meet Condition 8501, which basically demands that a visa holder maintain adequate health insurance arrangements while in Australia.

Medicare Benefits Schedule (MBS)

The 457 visa health cover entitles a holder to a medical claim that is normally paid through an MBS. The amount received will be equivalent to what will be paid out to a permanent Australian resident who is in the public system. Most of the 457 health plan that can be obtained cheaply will pay 100% of the MBS, while the more expensive ones either pay 150% or the total cost of a doctor’s visit. It is important to note that an MBS does not necessarily pay the full amount of a doctor’s visit or treatment, which means the difference would have to be paid out of pocket.

Reciprocal Health Care Agreements

Australia has reciprocal health care agreements with other countries, such as New Zealand, UK and Italy. Under the agreement, passport holders are covered for necessary medical treatments should they fall ill or get injured while in Australia. If the passport holder is enrolled with Medicare, then they meet Condition 8501. They must provide proof in their application that they have a Medicare card.

Combination of health cover

A 457 visa holder can have either 457 visa health cover or reciprocal health cover. But when their income reach a certain threshold, they must hold a combination of both insurance cover to avoid paying the Medicare Levy Surcharge that is anywhere between 1% and 1.5%. Although you will not receive additional benefits if you have both reciprocal health cover and health insurance for 457 visa, you can have your tax in Australia reduced. This is why individuals from countries eligible for reciprocal health care agreements are advised to apply for Reciprocal health cover once they arrive in Australia. If their cover is approved and they make a tax claim, they can indicate in their tax return that they have the reciprocal health cover to avoid the Medicare Levy Surcharge.

Permanent Residency

A 457 visa holder can apply for permanent residency in Australia, in which case the associated health insurance is no longer a requirement for their stay, but it is against the rules to have the coverage cancelled. Doing so is subject to penalties, such as the Medicare Levy Surcharge and the Lifetime Health Cover. The latter requires that a holder pay an extra 2% on insurance premiums for each year after a visa holder’s 31st birthday, should they choose not to be covered. Considering that permanent residents with private health insurance can get a rebate of up to 30%, it is best to continue coverage through 457 visa health insurance rather than pay for penalties.

Sheila Woods

Posted by: Sheila Woods

A very experienced migration agent, Sheila has always been fascinated by this field. Her university degree thesis was on Australia’s post-war immigration history (and it earned her first-class honours).

Filed in: Visas


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