Michell i just out LAFHA in to search.
LAFHA = Living Away from home allowance
You CAN NOT have LAFHA if you buy a house or apply for
PR.
You DO NOT need to have another home (say a house in the UK) to be able to get LAFHA.
You CAN HAVE LAFHA for the entire duration of your TEMPORARY VISA.
LAFHA is recognised by the ATO but is NOT a right, it must be offered (and administered) by the employer.
You should ask your prospective employer for it in advance, and preferably have it stated in the contract.
There are two elements to LAFHA:
1) House Rental. Your rent for accommodation is covered out of BEFORE TAX income and there is no other tax (such as Fringe Benefits Tax to pay).
Example: Annual income $70,000 (before Super); Annual Rent $20,000
Your rent is TAX FREE.
NET MONTHLY INCOME without LAFHA = $4383
NET MONTHLY INCOME WITH LAFHA = $4908
So $6000 a year better off in this example.
You tell your employer how much your rent (give them rental agreement) is and they adjust your NET pay accordingly.
2) Food allowance. There is a food allowance which is a FIXED amount that depends on the number of people in your family. Your ACTUAL food costs are irrelevant. Allowance is $42 per adult per week and $21 per child per week. This (I'm fairly sure) is income tax free and FBT free; that is it is not taxed.
Using same income info from above and assuming just two adults, the EXTRA income is (42*2adults*52 weeks) or $4368 year or $364/month.
So with LAFHA take home pay is now $4908+364= $5272/month.
Compared to WITHOUT LAFHA income of $4383 then you would be $889 NET a month better off.
Put it another way, your $70,000 annual salary WITH LAFHA provides a net monthly income equivalent to an annual salary of $87,500 WITHOUT LAFHA