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Found 83 results

  1. Guest

    Advice on LAFHA

    I am in the final stages of negotiation on inner role in Australia. It is a senior role and at this stage I have no idea under what visa they are thinking of employing me. First question is can I influence this? Second question is what then do I need to do to benefit from LAHFA and is it worth it? As I am still in negotiations there may be some leverage I can use here but obviously although Tax advice is being offered as part of the package this won't happen until I have accepted the offer....... Any guidance appreciated.......
  2. Hi everyone, After receiving our 457 spouse visa 18 months ago things could not be any better back here in Oz. All the pressure and stress of the process has long gone but a new visa issue has risen back through the cracks again. At the moment my partner is receiving the Lafha allowance as we are looking to move back to the UK sometime next year after we receive her PR visa. My question is will Immigration look at the allowance and hold that against her when they go to upgrade her Temporary visa to Permanent Visa status? Any feedback would be appreciated.
  3. Everyone who is affected by the Treasurer's proposed LAFHA reform from July 1, 2012 might like to attempt some action of their own to resist this unfair treatment, rather than sitting by and wringing their hands. I have just sent this email to the British High Commissioner in Canberra, asking for action on behalf of all affected British nationals. You are welcome to copy and paste the bold text below into a note of your own, which you might like to send to feedback.consular.services@fco.gov.uk Dear Sirs As a UK national temporarily resident in Australia on an E457 visa, I request the High Commissioner take urgent action in the form of a formal complaint to The Governor of Australia, Ms Gillard and Mr Swan with regards to the inequitable summary removal of non-taxable Living Away From Home Allowance benefits from British nationals who hold E457 visas. This "LAFHA" system has enabled employers to offer tax free payments to cover both accommodation and living expenses to foreign temporary residents in Australia on E457 Visas, by treating such payments as non-taxable fringe benefits. Under currently prevailing tax legislation, the fact that an E457 temporary residence visa holder is “living away from his normal place of residence “ (ie his prior foreign address), and does not intend to remain in Australia, was adequate grounds for entitlement to the LAFHA benefit. Such entitlement ceased if the individual applied for a Permanent Residence visa. This enabled Australian employers to attract foreign nationals (many of whom are British) to come and work in Australia, for a lower total remuneration package than if these payments were included in taxable (assessable) income. The Australian Treasury’s proposed changes to LAFHA mean that many UK nationals who are currently on E457 visas will no longer be entitled to non-taxable LAFHA benefits which were offered by their Australian employers as an integral part of their total remuneration package. This could mean a loss of after-tax income of $2000 per month on taxation as assessable income of a previously non-taxable LAFHA fringe benefit of $50,000 per annum. It is most unfortunate that the Australian Treasurer, Mr Wayne Swan, has seen fit to accuse individuals of “rorting” the tax system by claiming ever-increasing benefits annually under this system. What he fails to acknowledge is that (a) it is employers who offer the LAFHA benefit and administer it, the employee has no ability to claim the benefit himself, and (b) it is Australian employers who are “rorting” the system, as they are able to offer a lower total remuneration package to attract expatriates to work in Australia, and © there are more and more E457 visa-holders in Australia than previously, as this country desperately needs foreign workers to staff its mining and resources boom, let alone to provide services throughout the Australian economy. It is also most unfortunate that Mr Swan and his staff believe that employees on E457 temporary residence visas will be able to renegotiate their terms and conditions of employment with their employers. The employees in this situation have no voice and no bargaining position : many have indeed attempted such negotiation and have been rebuffed by their employers for various arbitrary reasons, e.g. on the basis that it is not the company’s responsibility to shield employees from changes in national taxation law, or more risibly, that such action would be unfair to Australian employees. Clearly, employees on E457 employer-sponsored temporary residence visas have no sound negotiating position, which fact is 100% obvious to both employers and employees alike, and should also be to the Treasurer. In actual fact, it is our Australian employers who have actually benefited most; they have been able to use the LAFHA system - which they both “offer” to the employee during package negotiation and administer after arrival - to pay to E457 visa holders lower total remuneration packages than they would if the LAFHA element had been taxed. And to pay less into Superannuation on their behalf as well. Accordingly, they should be forced by Treasury to make up the difference as Fringe Benefits Tax payable by the Employer, and to ensure that E457 temporary employees’ take-home pay remains the same after July 1 as it is currently. Kindly be advised that urgent action is necessary on your part, as Mr Swan and his Treasury colleagues are currently drawing up legislation to make this change to LAFHA effective on July 1, 2012. Yours faithfully Name & (Employer’s) Address If you do consider doing the same, then how about also getting all your affected British E457 visa holder contacts, and also those of other nationalities that you may have contact with, to do likewise! Anyone may copy the bold section above and paste it into their note to their country’s representative. Why should we let Swan get away with "rorting" us? We also deserve a “dinkum fair go”! We do not have a vote, but perhaps we can enlist a “Voice”!
  4. http://assistant.treasurer.gov.au/DisplayDocs.aspx?doc=pressreleases/2012/055.htm&pageID=003&min=djba&Year=&DocType=0 In response to the submissions received, the Government has taken the decision to defer the start date of the reforms from 1July 2012 to 1 October 2012. LAFHA changes to be deferred to 01/10/2012, it seems ... Best regards.
  5. LABOR faces a growing backlash over its planned crackdown on living-away-from-home allowances for skilled-migrant workers as resources companies warn it will lead to wage blowouts. Adding pressure to the Gillard government over its handling of the skilled-migration debate, the sector warned the plans would make it harder for them to attract skilled foreigners and drive up the costs of projects. The Australian Mines and Metals Association said there was insufficient detail about the proposed changes to the LAFHA, which take effect on July 1. "The resource industry will continue to need to source highly skilled workers from overseas to fill urgent positions on key projects," said AMMA executive director of industry Minna Knight. "The changes to the LAFHA will be a further impediment for resource employers by further driving wage costs up in an already inflated wages environment." The most influential people in Sport Under changes proposed last year, the allowance will no longer be exempt from income tax and fringe benefits tax if the workers do not maintain a home for their own use in Australia. It was revealed in the budget last month that the requirement to maintain a home in Australia would be extended to Australian citizens and permanent residents -- not just temporary foreign workers -- and the concessions would be limited to 12 months. Santos, which has been recruiting for multi-billion-dollar LNG projects in Queensland, told Treasury it would need to spend $6 million to compensate workers losing the allowance. Assistant Treasurer David Bradbury's office defended the measures, saying the tax concession would now be better targeted.
  6. Guest

    Lafha - so confused!!

    I have trawled the previous posts on LAFHA and I guess I am looking for some confirmation or contradiction of what info I have gleaned from reading the other posts.... The facts - I am on a 457, earning $78k + Super, in Darwin, renting on my own for $500pw (deemed to be suitable for job/location etc). My employer has agreed to arrange the LAFHA but I think what they have calculated is way too low. They have offered $13k taken off pre-tax, leaving a taxable amount of $65k - therefore only a $200-$300 amount different every month in my hand. Not much I don;t think. I calculate more like this: $2k monthly, (rent) + $350 ish monthly (food) = $28k annually taken off pre-tax, therefor taxable on $50k. This gives a significant increase in take-home pay. However, is this right roughly? I don't want to go to them demanding things I'm not able to claim and upset them but at the same time don't see the point on missing out on tax benefits if I am eligible. Any experts out there? Thanks
  7. Hi Poms, I am very confused about my eligibility for LAFHA and need some help................!! I shall give you my Oz life story so hopefully all the facts are there: I arrived in Perth in Dec 2010 on a working holiday visa, where I stayed with friends until Jan 2011. I then travelled the East Coast for a few weeks and arrived back in Perth on Feb 5th. I had decided to settle in Perth and try to find gainful employment with sponsorship on a 457 visa. After a week and 2 interviews I was offered a job with a 4 year 457 sponsorship visa. I have since looked into LAFHA and my basic understanding seems to tell me the following key points: 1. I am temporarily employed in Oz by my employer for 4 years whereby it is intended I return to the UK or apply for residency 3. I am obviously not an Australia citizen 2. My usual place of residence is England Given the above, am I not eligible for LAFHA allowance? I have not yet signed my contract so contacted my HR Manager querying my eligibility and she quite simple said "You do not qualify as we do not require you to work away from home" basically saying that the office is in Perth, and Perth is my usual place of residence.............?? Can someone please shed some light on this for me as I need to understand what I am entitle to before I sign my contract. Also, the actual funds that are awarded in the form of LAFHA, are they paid out of my employer's pocket? or are they received essentially from the government in the form of a tax break? i.e would my employer be having to fork out more money to me, or would they simply be undertaking a paper exercise with regard to my taxation Any help on this would be greatly appreciated : )
  8. Hi Folks I've been in Sydney hills district for a year and half now. Wife and I have decided to go for PR after our 2 years in January. Thing is I'll loose LAFHA as soon as I apply We have 3 kids so when we get PR it will mean we will save $13.5k in school fees, however we went for the big house with pool etc as LAFAH pays 40% of it. Our rent is $900 a week. Anyway as soon as we apply we loose LAFHA and will need to down scale our life a bit (House and big Car) My question is - Do we move away from the hills area and go up or down the coast to get a cheaper rental ( Eg $500-$600pw for a 4 bed ). I've always wanted to life near the beach. The compromise would be that I work in Eastern Creek / Rooty Hill area so would have a big drive from the coast and the kids would need to move school. Any ideas on good areas that are close to a beach and within 1.5 - 2 hours of Rooty Hill that rentals are cheap and we would have more of a beach life ? Cheers G
  9. fleabo

    LAFHA changes?

    Well, Wayne Swan delivered his mid-year review of the Government finances and it is not great. One proposed area of cuts is to do with LAFHA. Anyone know any more?
  10. Hi, I have dual nationality, born in Australia but have an English father, so hold both British and Australian passports. I'm about to accept a job in Sydney and will be moving to Australia as an Australian citizen. I will be keeping my house in the UK and renting it out, with the intention to move back to the UK eventually. I haven't allowed for LAFHA in my finance sums so it won't affect the move, but was considering, in light of the proposed changes, whether I would be eligible?? Any thoughts would be appreciated. Thanks
  11. domestic goddess

    Lafha to be abolished 2012

    Hi all my OH brought this info home about LAFHA so anyone on a 457 read on. Changes for Living Away from Home Allowance (LAFHA) 01-Dec-2011 The Living Away from Home Allowance (LAFHA), once a lucrative incentive for highly paid migrants to linger in the twilight zone of temporary rather than permanent residency, has been reformed in a controversial government move to prevent tax fraud. The Australian Treasurer, Wayne Swan, confirmed the changes to LAFHA on 29 November 2011. The allowance, claimed by many 457 holders, provides for cash payments to cover the costs of living away from home, interstate and overseas travel. After reports that some foreign workers were receiving up to 90 per cent of their salary tax-free, and as part of the budget-cut program, the government decided to reform LAFHA to specifically prevent overseas workers from claiming back tax. In order to continue claiming the LAFHA one must maintain a home for their own use in Australia (rather than their home come country) from which they are living away from for work. For example if a 457 holder owned a home in Sydney and their company sent them to Melbourne for work. In addition individuals claiming the allowance need to demonstrate their actual expenditure on accommodation and food beyond a statutory amount rather then simply claiming “reasonable costs” as is currently the case. Some possible effects include: - highly paid skilled overseas workers/senior executives may be deterred from working in Australia if there are better tax incentives from other countries; - more 457 workers will now be attracted to become a permanent resident as there is no more tax incentives for them to remain a temporary resident. If you are currently holding a 457 visa and claiming the LAFHA for tax reasons and wish to now apply for permanent residency contact your migration agent in order to set the ball rolling. My apologizes if I've posted under the wrong thread.
  12. Guest

    LAFHA and rent

    I'm trying to get my head around LAFHA. Does my net salary stay the same if my rent decreases? E.g. if I earn 125k per year, and pay 950 per week - will my monthly take home pay be affected if I increase my rent, or if I decrease my rent? Thanks
  13. ukdcsengineer

    Proposed changes to LAFHA

    Hi Guys, I am just in the process of negotiating/ finalising my T&C's for my 457 visa and had asked for LAFHA. The sponsoring company confirmed they would give me LAFHA, but have in the last couple of days stated that they have been informed that LAFHA will change significantly from July 1st 2012 and the key issues that will likely apply to me are:- LAFHAs to become subject to income tax in the employees’ hands Temporary residents of Australia (eg. visitors on 457 visas, working holiday visas, etc) only eligible for concessions if they maintain a home in Australia that they are then living away from (eg. fly in fly out scenario) Deductions to be allowable for actual expenditure on accommodation and food costs (subject to a statutory limit). (At this point I am assuming no. 3 above refers to a fly in fly out situation only). Has anyone else heard of these changes? This means i will be issued with 1 contract until end June the re-issued with another from 1st July. Also if they are going to be changes to LAFHA does anyone have any ideas to around them?
  14. Now they have announced the withdrawal of the LAFHA will this alter your decision on whether you come or stay in Australia? Almost all temporary residents in Australia will lose access to the Living Away From Home Allowance (LAFHA) under plans unveiled by the Australian government today. The Treasurer Wayne Swan announced the changes as part of a package of measures aimed at boosting government revenue. The new rules will come into force from July 1, 2012. LAFHA is widely used by temporary residents to boost their take-home pay. Some employers pay their foreign workers a LAFHA which comes off their gross wage. They then pay income tax on the lesser amount. Under reforms announced today: access to the tax exemption for temporary residents will be “limited to those who maintain a residence for their own use in Australia, which they are living away from for work purposes, such as ‘fly-in fly-out’ workers”. This will effectively close off the option for most temporary residents who claim the allowance because they are living away from their original home ie Ireland. That will no longer be allowable, according to the release from Treasury. “The Government will introduce reforms to stop individuals from being able to exploit the tax exemption for living-away-from-home allowance and benefits,” the Treasurer said. “This tax exemption is being increasingly misused by a narrow group of people, particularly highly-paid executives and foreign workers, at the expense of Australian taxpayers. “Rorting of this tax exemption was one of the issues raised at the Tax Forum, and has seen the total amount of tax-free living-away-from-home allowance reported by employers to the Australian Taxation Office increase from $162 million in 2004-05 to $740 million in 2010-11. “No permanent resident legitimately using this tax exemption for accommodation and food expenses will lose any entitlements. These reforms will not affect other tax concessions, such as those that apply to travel and meal allowances, and remote area fringe benefits. The reforms will apply from 1 July 2012.
  15. Katkat

    LAFHA to go?

    Don't want to panic anyone, but did I just hear correctly on the news that the government has decided to get rid of LAFHA in the up coming budget review? Does anyone know more?
  16. My husband has just started work and LAFHA was agreed as part of the package. They have said that he needs to earn above $48,000 before LAFHA can 'kick in'. Is this correct. Any help greatly appreciated.
  17. Hi, I see many people mentioning this allowance, but what makes someone eligible for it ? Thanks Stereo
  18. Dear Everybody, I hope everything goes fine to you. I am Mario and I ma writing from Italy. I won an ANU University position (Research fellow) for 2 years and the superannuable salary per annum is $85,733 + 17% of Supetannuation. I got a 457 Visa and I have a de facto relationship (she also got the 457 VISA). I have a question on my 457 VISA status and also some questions regarding Australian taxation, Superannuation, RHCA (Reciprocal Health Care Agreements) and LAFHA (Living Away From Home Allowance). 1) 457 VISA Health Insurance My and Lucia' 457 VISA has been granted from 31 August 2011 and it will be valid for 2 years. Since for some problems we are still in Italy and we will be in Australia at the end of the year, I would stop to pay our Private Insurance. I read on the DIAC web site on this link (http://www.immi.gov.au/skilled/457-h...isa-holder.htm) that: "The condition requires visa holders to maintain adequate arrangements for insurance for the duration of their stay in Australia" So this means that if I am NOT IN AUSTRALIA I can stop to pay the insurance, restarting it, when I will be in Australia? Is my understanding right? If not, can I do something different like do not cancel our Health Insurance but request to be moved on a latter date in a way to move also the payment? I am really sorry to bother you also with other questions, but as you could understand all this certainties are important for our staying in Austalia. So i need your help. Please help me, trying to clarify my doubt. 2) LAFHA As I told you, I got the 457 VISA just for 2 years (from 11 August 2011 to 31 August 2013) and I know from the ANU that I can apply for getting the LAFHA. My maximun LAFHA will be (85,733-47,480)=$ 38,253, right? So this menas that all the tax that eventually I have to pay (Salary Tax, MediCare and my part of 7% of the Superannuation), will be applied on this $47,480, right? See calculation below. Suppose that i will then get an extension of my ANU position for other 4 years, will be possible to get a new 457 VISA and so the LAFHA? 2) RHCA My understanding was that i just had to have a private Health insurance for getting the 457 VISA, but once I will be in Australia, I can get for sure the MediCare card for the RHCA. Moreover I read that the MediCare is sufficient to meet the health insurance required by the 457 VISA and so it should not be necessary to make the private health insurance. Is it right? Moreover, a friend of mine is working in Melboune, not with 457 VISA because he is working in Australia but not paid by the Australian, and he said that he got the card for FREE just going to the Medicare office, since Italian. When he leaves Australia and return he can ask for another MidiCare card. He just went to the MediCare office and asked for a Card. If so, my doubt is, SHELL I have to pay the 1.5% of the Medicare levely or since the RHCA i can get it for free? What about my de facto relationship? She got the 457 VISA too, thanks to my one, but she is without INCOME. Do she will pay the Medicare levys? Is for the Austalians the definition of a family also a couple in a de-facto relationship? Because if it is like this, i read that, even if I have to pay the Medicare levys (that I still did not understand), since our two incomes are given just by my one ($85,733) and since is less of $160,000, i do not have to pay the 1 % for the surgery. Is it right? If I should pay the MediCare levels (1.5% + 1%), Could I do a private health insurance and avoid to pay them? 3) Australian Taxation With the 457 VISA and with 2 years position, I am an Australian resident for taxation purposes (http://www.ato.gov.au/content/12333.htm)? And then, if I will stay longer (4 year ANU extension)? 4) Superannuation Suppose that I stay with the 457 VISA in this 2 years (and for the 4 year ANU extension), can I claim (bring with me) my superannuation benefits (both the university (17%) and my one (7%))? Which part is taxed at 35%? Will be the university one (17%) calculated on the $ 85,733 gross salary or on the $47,480 if i will apply for the LAFHA? What about the 7%? Can I decide to reduce my 7% to 0%? And then, if I will get the 4 year ANU extension, it will be the same? In any case I should not apply for getting an Australian permanent resident, otherwise I will be not able to claim them, right? SO FOR SUMMARIZE, let me estimate my salary without the LAFHA: Gross salary: $85,733 Tax: $19,671 (If Australian resident for taxation purposes) Net salary: (85,733-19,671)= $66,062 -> $ 5,505 per month. - If with MediCare Net salary – 2.5% of Gross Salary: (66,062-(0,025*85,733)= $ 63,918 -> $ 5,326 per month - If with my superannuation of 7% Net salary – 7% of Net Salary: (66,062-(0,07*66,062) = $ 61,437 -> $ 5,119 per month - If with my superannuation of 7% and MediCare Net salary - 7% of Net Salary – 2.5% of Gross Salary : (66,062 - (0,07*66,062) - (0,025*85,733) )= $ 59,294 -> $ 4,941 per month - If with a Private INSURANCE (estimate $1100 per year) Net salary – 1100 = $64,962 -> $ 5,413 per month SALARY with LAFHA: New Gross salary $ 47,480 Tax on $ 47,480: $7,794 Merdicare 2.5% on $ 47,480: $1,187 Superannuation of 7% on (47,480-7,794) : $2,778 SO the Net salary will be (85,733 - 7,794) = $ 77,939 -> $ 6,495 per month. or SO the Net salary will be (85,733 - 7,794 - 1,187 - 2,778) = $ 73,974 -> $ 6,164 per month Could you tell me which of them will be realistically my Salary? My gross salary when i have recieved my contract (before the 7/07/2011) was at $82,834, but now the rate is increased to $85,733. Shell I have to make all the calculation on the new rate ($85,733), as I did ? I apologise for those questions but they are really important to me and LUCIA. My warmest regards Mario
  19. fattony

    Cant see LAFHA difference

    Hi Guys , after a bit of to and fro my employer has agreed to give me LAFHA ...so now after my second paycheck (monthly) I'm confused ..pre LAFHA (1st Month ) I had $x amount of dollars paid into my account ..so now employer agree to pay $650 a week LAFHA and $15k a year for food coming to approx $47K a year in LAFHA for our family ..great or so I thought ...so my salary goes into my account (2nd month) and it clearly states LAFHA but hey its only $200 more than my last month pre LAFHA salary ..and my original contract definitely does not mention LAFHA and I had to fight to get it put on ..Am I imagining or have they simply added up my LAFHA as $xx dollars and taken that much of my salary and then added the LAFHA in and it remains more or less the same ..hoe does LAFHA work should I not get my pre LAFHA salary +LAFHA so my salry now should be annual slary +LAFHA /12 ? I'm really confused and think the company may now be benefitting at my expense any LAFHA experts out there please help?? Thanks
  20. Dorsetgirl1

    LAFHA - Minimum Salary Level

    Anyone know if the amount that your salary can't go below if you claim LAFHA....I think it's $50,000 but not sure
  21. Hi, I am completing an internal transfer (London to Sydney) with my company - although to a new role and different subsidiary. I would be moving over on a business sponsored long stay visa. When I asked about LAFHA (as no mention was made in my offer letter) I was told: 'LAFHA is only available to those employees who have a contract for a defined period of time and have the intention to return home at the end of their assignment. You have been made a permanent offer of employment and the LAFHA does not apply in your circumstances. Does this make sense? I have no idea if I will return to the UK following my period of working in Australia. I believe that LAFHA offers me significant incentives re food and rent rebates which I should try and get included in my contract but can anyone recommend a course of action? If I inform my company that although my intentions are long term I dont want to rule out a return to London and therefore request that LAFHA be considered in my offer letter? Thanks in advance for your advice. Tim
  22. Guest

    Nurse LAFHA

    Hi I am due to start work as a nurse in Perth. They don't seem to know what LAFHA is. I would like to know if any other nurses have been able to sort out LAFHA and if it has saved then tax, Thanks Lisa
  23. Dorsetgirl1

    Any LAFHA experts??

    Can you advise how much LAFHA i would get on rent of £850
  24. Another LAFHA question... Sorry to sound stupid but am I correct in assuming that someone on a 457 with an ongoing position who received some relocation money does not need to apply for LAFHA? I am not sure if I got that right but from what I read and understood so far LAFHA is only for people who do not have an ongoing position/do not intend to stay in Australia "forever"? Any advice would be much appreciated. Thanks.:wubclub:
  25. Guest

    LAFHA Help

    Hi I am looking for some help, I have just been granted my 457 visa and have been told of the LAFHA which I can believe I can apply for. I wondered if someone can give me the idiots guide on what i need to do. Can I apply for it straight away, and I am currently living with a friend until i get my own place, does this mean I can't apply for it? Thank you. Lynz:wink:
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