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Immigration Daily News Employers risk losing sponsorship rights if their agents take commissions direct from the training fund
Employers risk losing sponsorship rights if their agents take commissions direct from the training fund
DIBP has made it illegal to offer commissions out of Training Benchmark A funds and is now conducting an audit of known training institutions allegedly misusing training funds.
Late last year, Sydney TAFE was reportedly under investigation for alleged fraud in its use of millions of dollars from a training program for students on 457 visas. “Sydney Institute of TAFE generated $3.3 million last year from migration agents who were paid $380,000 in commissions for recruiting students on 457 visas” according to a report in The Sydney Morning Herald.
Convenor of Migration Alliance, Christopher Levingston says:
"It is understood that following the investigation Sydney TAFE was given a clean bill of health and that the allegations in the SMH article were without foundation. It is understood that the allegations were made to the journalist by a former disgruntled TAFE employee. As far as MA is aware any commissions paid to RMAs by Sydney TAFE did not come out of training benchmark payments made by employers. 'Commission payments' were made from other general funds held and maintained by Sydney TAFE".
The Migration Alliance then published on this blog that that a full audit of Training Benchmark A should be undertaken by the DIBP or some other body to ensure that the funds are spent properly and not left sitting in accounts or even worse being improperly misdirected.
That audit is now well underway. DIBP has confirmed that it is currently conducting an audit of known providers in response to recent allegations of misuse of funds contributed for the purpose of meeting the subclass 457 training benchmark requirements.
What exactly ‘known providers’ means is not explained but surely they must start out with those offering a ‘40% commission’.
DIBP also requires Benchmark A funds are directed to an ‘industry training fund’. These are statutory authorities responsible for providing funding for training of eligible workers in certain industries. Therefore, no payments can be made to TAFEs, Universities or ‘recognised industry bodies’, where there are statutory industry fund operating in the same sector as the applicant. Contributions to private registered training organisations (RTOs) do not satisfy the requirements of Training Benchmark A.
DIBP has indicated that it is not concerned with the payment of commissions per se. Commissions just cannot be paid out from the funds received for the purposes of meeting the benchmark.
On a related issue, the Migration Alliance noted that the Victorian Training Market Half Year Report revealed that some TAFEs were at financial risk. Migration Alliance wrote to Senator Michaelia Cash, Assistant Minister, DIBP and Kim Vance, Director, Program Delivery DIBP with these facts and the concern that employers are being encouraged to send funds to institutions that may be at financial risk.
"As top any prohibition or threat to withdraw an approval of a Training Organisation by reason of the payment of a commission does not have any statutory basis and may well be a threat but nothing more". says Christopher Levingston.
Immigration blog
The change in Policy is interesting and is broadly indicative of a shift or a challenge to the old regime.
The problem right from the get go was the focus on Industry training funds which in effect authorised union controlled funds to receive monies from Employers in satisfaction of the statutory scheme. The union focus was only briefly articulated and the middle ground was populated by the Unis, Tafes etc.These approvals were in a sense defacto in that DIBP did not actually endorse anyone or create a register of approved "training organisations" but simply received their certification to the effect that monies had been received in satisfaction of the training benchmark requirement. Following the 457 Review and the recommendation that a single payment of $500 go into consolidated revenue, DIBP is now trying to make the case for adopting that recommendation by pointing to the conduct of the various "approved" entities and the focus on that is the commission issue.
I am personally of the view that if commission is prohibited, the prohibition can only be extended to Training benchmark funds which are in effect reserved. This actually make sense but there is no prohibition on the commission from being paid out of non earmarked funds.
Putting that aside I am personally of the view that commission payments are simply an incentive but that they do not exclusively drive the relationship. What the client ( sponsor) wants is ease of compliance.
By the way, did the 457 review people think through the $500 contribution? Why should BHP pay $500 and the local small business pay $500 the same as BHP, that doesn't seem very fair, don't they have different responsibilities concerning the size of their commitment to training? No wonder we have a skills shortage.