What Are the Impacts of the Skilled Migrant Category Changes?

It will be another year of change for NZ Immigration and our skilled migrant workforce.  

The Skilled Migrant Worker Visa that has been traditionally the leading residency visa for migrant workers wanting to move to New Zealand shores is currently being reassessed by the Government.

The Government's final decision on this visa’s proposed criteria changes will be released in early 2023, after a consultation period with the public and industry leaders. 

How these changes will impact New Zealand’s immigration and job sector will start to be known in the later part of 2023. However, how well they will support the Government's long-term plans to support more economic growth and our industries will take some time to bear fruit. 

In this article, we’ll discuss the impact the changes to the point system will have on New Zealand employers and our migrant workforce. 

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What Is the Skilled Migrant Category?

The Skilled Migrant Category is a residence pathway for migrants holding skilled job offers from New Zealand employers. Under this category, it awards migrants with points based on their education, work experience, job offers, and personal attributes. 

Learn more about the category and its residence pathway in our Skilled Migrant Resident visa guide. 

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Rebalancing the Skilled Migrant Category

The Government is rebalancing New Zealand's immigration system by implementing a shift in the future migrant workforce to increase New Zealand business productivity, a higher wage threshold and rebalance the skills gap to support our economy's growth. The long-term view is to move New Zealand into a more valuable economy that can hold its own on the global stage. 

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Skilled Migrant Category Reopened

INZ announced the reopening of the Skilled Migrant Category in October 2022. The Skilled Migrant Category (SMC) visa was reopened and resumed (under the same settings previous to April 2020) on 9 November 2022. However, new and continuous changes are expected, as the Government's proposal has been submitted for consultation before it is implemented. 

Starting with the first change with an increase in the points threshold from 160 to 180 in December last year until the time at which the final changes are rolled out by the Government later this year.

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What Are the Skilled Migrant Category Proposed Changes?

The Skilled Migrant Category has previously processed the largest volume of residence visas in NZ. At its peak in 2018-19 it saw 242,364 visas approved. However, it closed to new applications in April 2020, when the NZ border closed in response to the Covid-19 pandemic. 

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The proposed changes are:

1. The introduction of a simplified point system. The criteria is based on one of three categories; professional registration, qualifications, or high income, as well as 3 points for up to three years of skilled work in New Zealand.
2. No caps to the level of applications processed, meaning a higher proportion of migrants potentially will gain residence every year. 
3. Special requirements for people in specified occupations to support immigration and labour market risks 

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Simplify the Points System

INZ has proposed a simplified points system that sets a clear, fair, and transparent eligibility threshold for skilled residence.

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What Does the Proposed Simplified Point System Look Like?

The simplification will increase the certainty for migrants of whether they can or can not apply. In addition, the criteria is more straightforward, removing the non-skilled "bonus points" for where migrants are located and if they study in NZ or have a partner that does. This is because the previous "bonus" points did not bring enough value to the criteria, and the Government proposes to promote regional employment in other ways. 

The point system proposal is as follows:

Applicants will need to have at least 6 points to be eligible, which can be made up from:

• 3 to 6 points based on professional registration, qualifications, or income. People can choose the skill category that offers the most points based on their circumstances; and
• 1 point per year of work in New Zealand in a skilled job, up to a maximum of 3 points.

The simplified system is proposed to take income as just one way of providing points and illustrating their skill rather than a qualifier. 

The changes to the Skilled Migrant Visa are such that migrants will need to have worked in New Zealand for a period of time to qualify. The length of time a migrant works in New Zealand helps to increase their chances of success.

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What Does the Points Threshold Increase Mean for Migrants

Within the proposal, the new higher points criteria is suggested to drop the number of applicants, reducing the visa processing waiting time for those successful applicants. 

If you have a degree or professional registration you can benefit from this change. If you rely on your income alone you need to meet the income threshold of at least 1.5x the median wage to be accepted under this criteria. Without the additional support of the previous ‘bonus points scheme’ the criteria for the visa is very clear. 

Those who hoped to gain extra points by having highly paid partners or employed in locations outside Auckland will need to rethink their options or return to study to increase their chances of qualifying. 

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The Impact of A Simplified Points System on Migrants

While the proposed changes aim to provide migrants with certainty about their eligibility for skilled residence, it may be challenging for some migrant applicants. It may be more difficult for migrants to meet the points threshold in specific occupations, especially where the training is primarily on-the-job, and there is no associated registration scheme. 

Most applicants for the Skilled Migrant Category are individuals that are already onshore on temporary work visas (94% in 2019). Changing to this simplified points system may leave some of these migrants with little option but to seek other shores or rethink their long-term settlement strategy. 

If they are relying on the income criteria for example and the income threshold rises above affordability for their employers this could leave them in vulnerable position. 

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Malcolm Pacific Immigration are licensed Immigration Advisers, who are here to help guide you through the process of visa application. 

We are here to help guide you on the best visa for your situation and help support you each step of the way.  

Get in touch with us today.

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The Impact of the Points System on Employers

The point system changes are proposed to maintain tension in the labour market to encourage employers to lift wages and conditions or shift to technological solutions or more productive business models rather than relying on access to large numbers of low skilled migrant workers. These changes also align closely with the Accredited Employer Work Visa (AEWV) introduced in July 2022.

Through the new points system proposal, some employers may need to substantially increase their hourly rates to meet a higher income threshold in order to employ migrant workers. Would this wage increase flow on to New Zealand citizens is another question.

The employers offering work within the ANZSCO 4-5 roles which require lower training levels, will need to pay 1.5x the median wage. The median wage calculation is taken across a wide range of industries which means if the changes are confirmed some may need to pay migrants higher than the industry average for their sector. 

The Government believes that this income threshold increase will ensure that the migrants have more financial security. However the impact of this rise in cost could reduce the bottom line for New Zealand business. This could have a flow on effect, increasing the prices New Zealanders pay in order to fulfill the services employing migrant workers. 

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What will the Changes to the Point System Mean for Immigration?

The benefits of simplifying the points system should reduce visa approval time, by reducing the volume of applications that qualify.

The volume of visas approved suffered under the previous rules due to the volume of applications. Even though the amount of visas approved is uncapped, only 40% of eligible applications in 2019 were processed. 

The Government says the new system should make eligibility clearer in the long term, allow New Zealand to retain the talent brought in via the new Accredited Employer Work Visa, and complement the New Zealand Green List.

New Zealand Immigration will still continue to prioritise critical occupations with the use of the Green List which sits alongside of the Skilled Migrant Visa, to offer pathways to residence for roles New Zealand needs to sustain its growth. 

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As licenced immigration advisers, Malcolm Pacific Immigration we have 35 years of experience helping thousands of migrants and their families discover a great new life in New Zealand. We are here to simplify the process and help guide you to find the best visa for your situation.  

Get in touch with us today.

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The Benefit of the Simplified Points System for NZ

The Government proposal would aim to help population growth remain within New Zealand's capacity to absorb people.  To support their long-term goal of a higher-productivity, higher-wage economy, the Government’s proposed changes mean there will be an alleviating of the pressure on infrastructure, especially housing. 

The Government expects the country to also benefit economically with fewer Skilled Migrants but a better quality of experience and higher pay rates.

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Additional Proposed Changes 

The Government proposes to make the Job Search visa redundant. This type of visa application is often the most challenging and time-consuming for INZ to assess. Technology and the popularity of online meetings has improved people's ability to job hunt from offshore. Visitor visas can also supplement this process allowing migrants to look for work before transitioning to a work or residence visa. 

Removing this type of visa can benefit New Zealand employers and our immigration process, as INZ can control the prioritisation and process of the most valuable visas for the country's growth.

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What Next for the Skilled Migrant Proposal?

In this article, we have discussed the impact the proposed changes could have on the Skilled Migration Visa when it is eventually rolled out in late 2023. 

The public consultation period could see revisions to this policy based on advice from industry leaders and public feedback. 

The final decision will be released in early 2023, meaning we will not have to wait for long to understand the finalised policy. 

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Need to Know More About Your Options?

Get advice from the licensed advisers at Malcolm Pacific Immigration.

Understanding the Skilled Migrant Category visa options and INZ's changes can be stressful, but we can help! Reach out to our experienced immigration advisers for advice and guidance on the process.

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