The federal government has announced a new temporary visa designed to attract and retain skilled workers and fill the nation’s critical labour shortages.

The Skills in Demand (SID) visa came into effect this month, replacing the Temporary Skills Shortage (TSS) (subclass 482) visa, according to the Department of Home Affairs.

The new visa is part of a raft of changes to skilled visa arrangements outlined by the government last year to modernise the system, with a focus on targeting skilled migration.

“As a government, we are focused on targeting skilled migration to address our workforce needs while promoting worker mobility,” Home Affairs and Immigration Minister Tony Burke said.

“The new visa programs reshape temporary and permanent skilled migration to drive long-term prosperity and support Australia to attract and retain the best and brightest.”

The SID visa allows an employer to sponsor an eligible skilled worker to fill a position where they can’t find an appropriately skilled Australian worker.

The government says it will provide a “streamlined pathway” for skilled migrants, promoting worker mobility while also offering a “simple process” for employers to access skilled workers.

Those who are eligible can stay in Australia on the SID for up to four years, while Hong Kong passport holders may stay up to five years.

The visa costs $3,115 for the main applicant and for each dependent aged 18 years and over, and $780 for dependents under this age.

However, additional costs are required, including for English language tests, health checks and police certificates.

The visa has three targeted streams: a Core Skills stream, a Specialist Skills stream and a Labour Agreement stream.

The first is designed to address skills shortages and fill workforce gaps across mid-income roles.

For this stream, eligible holders must be sponsored to work in an occupation listed on the government’s Core Skills Occupation List (CSOL).

They must meet the Core Skills Income Threshold, which currently sits at $73,150 and is expected to be indexed annually.

The CSOL covers 456 jobs, including in construction, agriculture, cyber security, health and education, based on those identified by government agency Jobs and Skills Australia as being in short supply.

The specialist skills stream is for highly skilled migrants and higher-income earners.

Employers can nominate any occupation from the Australian and New Zealand Standard Classification of Occupations listed in major groups, excepting trades, with a salary that meets the Specialist Skills Income Threshold. This currently sits at $135,000.

The third stream is for skilled workers nominated by employers to work in a specified occupation under the terms of a labour agreement.

The federal government said an ‘Essential Skills’ stream will replace the TSS Labour Agreement stream after further consultation with state and territory governments and other stakeholders.

A National Innovation visa has also replaced the Global Talent visa as an “invitation-only program for highly skilled migrants who will make a significant contribution” to sectors such as critical technologies, renewable energy and health.

It is a permanent visa for those with international recognition in an eligible area.

Minister for Industry and Science Ed Husic said: “There’s a global race to attract the best science and tech workers to give the industry an edge; these new visas put Australia in the best position to attract the right people to work hand-in-glove with our own world-class researchers.”