LAFHA announcement in the budget ?

[ginger]

I also just received a call back from Rebecca Fanning. LAFHA is definitely gone on 1st July 2012 for those NOT maintaining a home in Australia.....payrises required alround?

 

ginger

[Guest Olibear]

If you're offering Ginger?

 

I have created a basic LAFHA cuts calculator which estimates from your current salary what your effective salary is if you are to keep your monthly take-home income.

 

For example, someone on 60k with 9% super and around 3k LAFHA food/accommodation allowance per month would take home the same as someone on 77k with no LAFHA. I would like to see which companies are willing to match that!

[AoifesMum]

Does anyone know for sure if the info Rebecca has given is actually correct? To be honest, I cannot see how you could interpret the announcement in that way from the actual statement. Also, everybody I have spoken with/read on the web has interpreted it as we did initially. I have also just spoken with the Department of Immigration and Citizenship and, having consulted a supervisor, was again informed that it was only applicable to new applicants (the post 8th May crowd). Surely everybody cannot be wrong? Also, why are people giving out such incorrect information on such a serious issue?

[ginger]

Does anyone know for sure if the info Rebecca has given is actually correct? To be honest, I cannot see how you could interpret the announcement in that way from the actual statement. Also, everybody I have spoken with/read on the web has interpreted it as we did initially. I have also just spoken with the Department of Immigration and Citizenship and, having consulted a supervisor, was again informed that it was only applicable to new applicants (the post 8th May crowd). Surely everybody cannot be wrong? Also, why are people giving out such incorrect information on such a serious issue?

 

Ha ha sorry I cannot meet that payrise promise..

 

Rebecca seemed clear on the changes and she works side by side with Swan so I'd 'assume' she correct. There are still alot of things to sort on the legal side of things though. I think it has been dealt with appallingly (don't know if that's a word) but we cannot do much about that. To cover what I have lost and based on the fact tax has increased to 32.5 % (or so I believe) I will need about 15k a year rise....don't think my bnoss will smile at that request but we'll see.

 

ginger

[Guest Olibear]

Does anyone know for sure if the info Rebecca has given is actually correct? To be honest, I cannot see how you could interpret the announcement in that way from the actual statement. Also, everybody I have spoken with/read on the web has interpreted it as we did initially. I have also just spoken with the Department of Immigration and Citizenship and, having consulted a supervisor, was again informed that it was only applicable to new applicants (the post 8th May crowd). Surely everybody cannot be wrong? Also, why are people giving out such incorrect information on such a serious issue?

 

Well all I can quote is what we have been told:

 

The Australian Federal Treasury has confirmed late afternoon (Wednesday the 9^th of May 2012), that “transitional period to 30 June 2014” mentioned in the 2012-13 Budget, only applies to employees receiving a LAFH concession as at 8 May 2012, where they maintained a home in Australia (for their use), were not currently living in it, and are receiving a LAFH concession for living temporarily in other city.

 

Accordingly, as a 457 Visa holder (or temporary resident), it would be highly unlikely you are maintaining a home in Australia (for your own use) and then receiving a LAFH concession whilst working in another city. Typically, you receive a LAFHA for living in a home that you currently occupy.

 

This means the LAFH concession you currently receive would likely no longer apply after 30 June 2012

[Guest SoloRenegade]

As for how accurate the response from Rebecca is, well I have some faith in it as I have heard the same and similar from a few people who did get through to her... so I think those who are making the incorrect statements have not read the fine print!! And it would seem that is the case for most... the doc published by KPMG could allow you to read it either way (http://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/Pages/2012-federal-budget-brief.aspx) so I am very interested to see what the response by the treasury is next week, although I am fearful that the writing is on the wall!

 

What people have also overlooked is the increase in tax on non-residents to 32.5% with no tax free amount... That's another factor which has a big impact on my bottom line.... :-(

[RockDr]

What people have also overlooked is the increase in tax on non-residents to 32.5% with no tax free amount... That's another factor which has a big impact on my bottom line.... :-(

 

Most people on a 457 ARE residents for tax purposes, that 32.5% shouldn't apply to them.

[fensaddler]

For the purposes of tax, most of us (ie those on 457s) are residents, if only temporary residents, so the changes in tax for non-residents do not apply, even if the withdrawal of LAFHA does.

[Dunwa]

*sigh* Resident for tax but not for concessions. :realmad:

[ginger]

For the purposes of tax, most of us (ie those on 457s) are residents, if only temporary residents, so the changes in tax for non-residents do not apply, even if the withdrawal of LAFHA does.

 

 

On news.com.au it clearly states ALL temporary residents will pay a blanket 32.5% tax. Read into that what you will but I believe the tax may be changing on a 457 visa too. I hope we are still classed as residents after 1st July but I am a little unsure. Does anyone have someone they can contact for a definite answer.

 

On the plus side for me my boss has shown what a great guy he is and told me I will not lose any money.

 

ginger

[Guest ctowna]

Ginger - don't believe everything you read. Especially if it's on a news website. Only information released on a Government website can be relied upon 100%, but only if you read it how they intended it too (cough cough "ALL"). If you're 457 then you are a resident for tax purposes (I am a tax accountant and our Human Capital team has assured me of this when I started).

[ginger]

thanks for that info it would be unfair to change the tax status of a 457 visa. We all appreciate replies like this.

 

ginger

[Guest ComingDownUnder]

I'm sorry to hear losing the LAFHA is going to make such an impact on so many of you, to the extent that some people may have to move back to the UK. We are on 457 visas and therefore will be affected by the changes too - before we applied and made the move we talked about how it might be abolished and the way we looked at it is that the LAFHA was a perk to being on a 457 visa (and let's face it there aren't really any others!) but it wasn't a deciding factor in coming to live in Australia, we had to make sure we could still afford to live our lives without the added bonus of LAFHA. My husband is on a good wage, by no means phenomenal, but good enough to pay our bills, look after our family and enjoy our weekends and although yeah sure, it would be great to continue to receive it, we aren't going to let losing it bring us down. We were going to stay on 457's for the full 4 years but have now just decided to apply for permanent residency as soon as possible, supported by my husband's employer.

 

 

I agree that the way the information has been given out by the Government is by no means the correct or helpful, with snippets being passed on here and there in the manner of a game of Chinese Whispers, leaving people confused and frightened about how they are going to make ends meet and scared that they will not be able to keep their heads above water. But I know for us, we would never had made the life changing decision to pack up of lives and move to the other side of the world if we knew there was even a possibility that something like a change in legislation or rules around our type of visa would put us in such jeopardy. I by no means mean to criticise anyone by what I say and I hope I cause no offence as it is certainly not intended, I am simply giving my opinion and perspective on the situation.

 

 

With or without the LAFHA we are still incredibly grateful to Australia for giving us the opportunity to be here and live the dream we have always wanted to live out.

[fensaddler]

I'm sorry to hear losing the LAFHA is going to make such an impact on so many of you, to the extent that some people may have to move back to the UK. We are on 457 visas and therefore will be affected by the changes too - before we applied and made the move we talked about how it might be abolished and the way we looked at it is that the LAFHA was a perk to being on a 457 visa (and let's face it there aren't really any others!) but it wasn't a deciding factor in coming to live in Australia, we had to make sure we could still afford to live our lives without the added bonus of LAFHA. My husband is on a good wage, by no means phenomenal, but good enough to pay our bills, look after our family and enjoy our weekends and although yeah sure, it would be great to continue to receive it, we aren't going to let losing it bring us down. We were going to stay on 457's for the full 4 years but have now just decided to apply for permanent residency as soon as possible, supported by my husband's employer.

 

 

I agree that the way the information has been given out by the Government is by no means the correct or helpful, with snippets being passed on here and there in the manner of a game of Chinese Whispers, leaving people confused and frightened about how they are going to make ends meet and scared that they will not be able to keep their heads above water. But I know for us, we would never had made the life changing decision to pack up of lives and move to the other side of the world if we knew there was even a possibility that something like a change in legislation or rules around our type of visa would put us in such jeopardy. I by no means mean to criticise anyone by what I say and I hope I cause no offence as it is certainly not intended, I am simply giving my opinion and perspective on the situation.

 

 

With or without the LAFHA we are still incredibly grateful to Australia for giving us the opportunity to be here and live the dream we have always wanted to live out.

 

I think we are broadly in your position CDU, and lucky to have been here only a short time, so not used to having LAFHA yet. We will lose an eye-watering amount of money, and we will have to tighten our belts to see things through, but we have more flexibility and room for manouvre than some on here. In that we are probably luckier than many - still feeling lucky to have the opportunity of living here, and lucky that this won't completely wreck our plans. But there are plenty who are less lucky - if you're in an expensive city (Sydney being the most painful), live in NSW and have to pay $5k a year for every child in state school, if you aren't on a huge wage, or if your partner cannot go out to work because of childcare responsibilities, or because their quals aren't recognised here (and I'm thinking of specific people I know when I cite each of these examples), then things may be very different, and very much bleaker. As for peoples' calculations about whether to come here, those are very complex, and I suspect very few of us had a clear idea before we arrived of exactly what our take home pay would be, or what that would be worth in real terms - we had to take a certain amount on trust and travel in hope. For some it was always a marginal call, but still perhaps better than the prospects they had back home - and its hugely difficult when government's summarily rearrange the terms of the deal so drastically (to think, I left the UK much because the UK government was messing with my stability and career in much the same way).

 

And what does really irritate is a. the manner in which this has been communicated, which was incompetent bordering (allegedly) on the deliberately deceptive and b. that it was the result of a cynical political decision to claw money back from a sometimes vulnerable group who have no vote, and therefore do not enter into the rather narrow calculations of benefit used by a government clinging on to power.

 

This affects everyone differently, and I am troubled by the serious impact this will have on some people on here, and on others I know.

[Guest Citizen Smith]

A rule (or the conditions of a rule) can apply equally to everybody but still be discriminatory if it effects one group more than another. Visit http://www.facebook.com/yourehavingalafha to register your support. If you have a complaint based on discrimination you can email complaintsinfo@humanrights.gov.au

[AoifesMum]

Hi all,

 

Just wondered if anyone had any advice for us? A lot of posters on here seem to be knowledgable about the recent LAFHA changes. We've been trying to have discussions with my partners employers but getting nowhere. We, like many on here, will loose the LAFHA on 1st July. My partners employers have indicated that they were looking into alternatives for those affected, but they have been ignoring our calls all week and we are left wondering what to do. I have spoken to my partner's boss who was supportive and understanding of our situation, but he had incorrect info and maintained that we would not loose the LAFHA until 2014, despite me stressing I had spoken with the Treasury. I contacted Immigration who also gave incorrect advice, despite checking with a supervisor. I feel I'm going around in circles and, come July, we'll be left unable to pay our rent. Any suggestions?

[Dunwa]

So what's your interpretation of the rule to offer residents a two year transition period but to offer non-residents a zero transition period ? Discriminatory or non-discriminatory.

[AoifesMum]

Almost certainly discriminatory. It's the lack of votes from those affected which makes it so cynical.

[Guest mcauleyl30]

We are most definitely being discrimated against, this does not make it "an even playing field" as stated by the government and some Australians, we are paying FULL tax and receiving NONE of the benefits, so we pay full tax and full school fees and child care too! it has/should be illegal! Shame on the australian government, very disappointed, feel like a second class citizen here, they have taken advantage of the vulnerable who can't vote or oppose them!

[NickyNook]

We are most definitely being discrimated against, this does not make it "an even playing field" as stated by the government and some Australians, we are paying FULL tax and receiving NONE of the benefits, so we pay full tax and full school fees and child care too! it has/should be illegal! Shame on the australian government, very disappointed, feel like a second class citizen here, they have taken advantage of the vulnerable who can't vote or oppose them!

 

LOL! Hate to say it but you're not any kind of citizen (not even a second-class one :wink:) - you're merely a temp worker, here for economic reasons.

 

And you do get some benefits from paying tax - you get maintained roads, clean water, access to public transport, hospitals, police, public libraries, rubbish collection and the like. All those things that taxes pay for and you can use.

[Rupert]

We are most definitely being discrimated against, this does not make it "an even playing field" as stated by the government and some Australians, we are paying FULL tax and receiving NONE of the benefits, so we pay full tax and full school fees and child care too! it has/should be illegal! Shame on the australian government, very disappointed, feel like a second class citizen here, they have taken advantage of the vulnerable who can't vote or oppose them!

 

Taxes are not paid purely to fund child care benefits and school fees. To say that you get NONE of the benefits is quite frankly absurd, taxes pay for a whole host of things. And note that not everyone has children so it is not just 457 holders who are paying taxes as a contribution towards infrastructure and other government provided services but not getting childcare rebates..

 

I can't see any discrimination myself. Only that in the past, 457 holders had this tax break that other people did not even though most were not maintaining a home unlet in their home country. I have seen people post about getting $2k a month through LAFHA, which would more than pay for any school fees and lets not forget that again not every LAFHA recipient even has children and in all but two states school is free anyway.

 

Also you seem to have misunderstood your visa. You are not a citizen, even a second class one; you are a temporary resident and it is up to you to understand what that means and whether it is acceptable to you.

[paisleylass]

TBH the 457 visa allows a huge benefit that sponsorship in other countries (am thinking USA) does not - the spouse can also work relatively unrestricted. I would have loved to have moved to California but couldn't face enforced unemployment so Aus it was )

 

It will be much harder for those on a 457 with children though, but I still wouldn't call it discrimination. We are just visitors here, it's like a long working holiday. We didn't even know about LAFHA when hubby accepted the job and didn't get it til Feb this year. But when I read claims of how it makes up a huge proportion of take home pay I think there must be a misunderstanding - it's a tax break, not a net allowance.

[Joebloggs]

If you are a temporary resident and you apply for PR you lose LAFHA allowance anyway because you are intending on making Australia your home, with so many people now coming to Australia on a 457 because they didn't meet the criteria for PR with the intention of Permanently migrating after the 2 years it just looks like an utter rort.

 

Maybe the Government should allow LAFHA if the recipient agreed never to apply for PR

[fensaddler]

True, we do get services for the taxes we pay, but not everything we would get as citizens. I can understand that, but do wonder how fair it is then to have to pay out everything as if we were citizens. As UK nationals we are fortunate to get reciprocal healthcare (but we would get that if we were merely backpacking tourists), and some of us in some states get largely free schooling on the same terms at citizens - but crucially neither of these benefits accrue automatically as a result of visa status - one is a benefit of our nationality, and the other depends on where you live. Meanwhile, if you are on a 457, maintaining private health cover, at $3-400 for a family per month, is required by the visa conditions. As someone on another forum pointed out, 457s run the risk of being sent home in 28 days if they lose their jobs, for which one could fairly argue some risk premium is due.

 

Then there is the bigger picture. For sure, the 457 is an excellent way to get to work in Australia for those who don't qualify for automatic PR, because of the employment rights it allows to partners (not just spouses, but also de facto partners, including same sex partners) and because of the route to PR it allows. But the Australian government would not have this in place unless it believed there were substantial advantages both to the economy and to employers. The withdrawal of LAFHA undermines this case, and I think will prove to be damaging to both benefiting parties when the non-mining part of the Aussie economy begins to swing upwards again, as it surely will do as interest rates, and hence also the value of the A$, fall. In two years, with a resurgent economy, they might find the message has gone out to potential migrants that a. you're not really that welcome and b. you'll not be very well off here, and that the supplies of skilled, English speaking, labour they had hitherto relied on might not be quite so willing to come and pitch their swag by the billabong.

[Guest RaoulDuke66]

And so the exodus begins...

 

http://winawer.org/blog/