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FY2026โ27 Federal Budget Updates and Skilled Migration Points Test Changes
Budget is released on 12 May 2026 7:30pm AEST. You can download key budget documents here.
1. FY2026-27 Planning Level Announcement
The Government will set the 2026โ27 permanent Migration Program planning level at 185,000 places (unchanged from last FY) and allocate 132,240 places (over 70 per cent) to the Skill stream.
Across both the Skill and Family streams of the permanent Migration Program, the Government will prioritise applications from onshore migrants, allocating 129,590 places to migrants already living in Australia, with an additional 300 places allocated to Special Eligibility.
The remaining 55,110 offshore places will predominately be allocated to highโskilled migrants that help address Australiaโs longโterm skill needs. This measure will place downward pressure on net overseas migration. This is roughly 30% of the total planning level of 185000. This is not a dramatic change as offshore is usually between 30% and 40% of overall planning level
What does this planning level means? Planning level of 185000 (and 132K for Skilled visa) remains unchanged from last FY. This is good news as this refers to the total amount of visas that will be granted in the FY, and there are no cuts. Now we have to wait for Subclass planning levels as well as State nomination allocation quota to get an idea as to the impact on visa processing times, as well how many new invitations one can expect in FY2026-27.
The 30% limit for offshore is not too worrying as historically offshore grants account for roughly 30% to 40% of total planning level anyways.
Read more on Planning Level and State Allocation here ๐
2. New Points Test System
The Government will reform the permanent migration points test to better identify migrants who drive productivity and Australiaโs longโterm prosperity. Almost twoโthirds of permanent skilled migrants are currently selected through points tested visas. The points test will be optimised to select better educated, higherโskilled and younger migrants overall. No further detail has been released by the government.
3. Net overseas migration
Net overseas migration (NOM) has declined by around 45 per cent from its peak in 2022โ23 and is forecast to continue declining through to 2027โ28. NOM is forecast to be moderately higher than previously expected in 2025โ26 and 2026โ27, which reflects that migrants on temporary visas are departing Australia at lower rates than in the past. Arrivals of New Zealand citizens are also expected to remain strong, reflecting Australiaโs relatively favourable labour market conditions. Migration policy changes in this Budget will place downward pressure on NOM.
Useful Resources
- FY2026-27 Budget Official Website
- ABC News on 11 May 2026
- Grattan Institute Points System Proposal (June 2024)
- Grattan Institute Points Calculator (June 2024)
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