AoifesMum Posted May 14, 2012 Share Posted May 14, 2012 Hello everyone (again). Well.... my partners employers have stated that they have no intention of making up the shortfall in my partner's wage to cover the LAFHA loss. Now, when I spoke to Rebecca last week she said that the Treasury 'expects' employers to meet this shortfall. I am waiting a return call from her. Does anyone know how this 'expectation' can be managed if the employer simply refuses to play ball? There doesn't appear to be anything the employee can actually do to compel them to meet the shortfall. As a result we will be returning home and I was also wondering what rights we have with regard to the cost implications of breaking the employment contract - any ideas? We received relocation expenses (flights and some money towards shipping costs). I know I've read on here that the employers are responsible for return flights. We'll be left hideously in debt after this and we've no jobs to return to either. Thanks for any ideas and I hope others have had more luck with renegotiations than we have! Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted May 14, 2012 Share Posted May 14, 2012 http://www.grattan.edu.au/people.html Those impacted by the LAFHA withdrawal to the extent they are departing Australia might want to contact Peter Mares (click on his name at the above link). Peter used to work for ABC Radio National (where I have heard several interviews with Immigration Ministers), has presented in Canberra on matters relating to migration, and may be interested in pursuing the issue. Best regards. Quote Link to comment Share on other sites More sharing options...
AoifesMum Posted May 14, 2012 Share Posted May 14, 2012 Thanks for that link, Alan. I've emailed Peter. It would be great to get the issue out there but I doubt it'll do any good - we can but try though! Quote Link to comment Share on other sites More sharing options...
fensaddler Posted May 14, 2012 Share Posted May 14, 2012 And so the exodus begins... http://winawer.org/blog/ The above piece, written by a Canadian academic, is spot on. However, its not just in the government that the 'other' Australia appears. Try comment 64 on this thread... http://mumbrella.com.au/two-year-lafha-reprieve-for-overseas-agency-staff-already-in-place-90593 No, its not the Australia I meet from day to day either, but its out there. Quote Link to comment Share on other sites More sharing options...
Freckleface Posted May 14, 2012 Share Posted May 14, 2012 Hello everyone (again). Well.... my partners employers have stated that they have no intention of making up the shortfall in my partner's wage to cover the LAFHA loss. Now, when I spoke to Rebecca last week she said that the Treasury 'expects' employers to meet this shortfall. I am waiting a return call from her. Does anyone know how this 'expectation' can be managed if the employer simply refuses to play ball? There doesn't appear to be anything the employee can actually do to compel them to meet the shortfall. As a result we will be returning home and I was also wondering what rights we have with regard to the cost implications of breaking the employment contract - any ideas? We received relocation expenses (flights and some money towards shipping costs). I know I've read on here that the employers are responsible for return flights. We'll be left hideously in debt after this and we've no jobs to return to either. Thanks for any ideas and I hope others have had more luck with renegotiations than we have! I think you have misunderstood the use of the word 'expects'. I think you will find it is a case that they are expecting some employers will increase salaries to cover the short fall rather than employers being expected (required) to. Quote Link to comment Share on other sites More sharing options...
AoifesMum Posted May 14, 2012 Share Posted May 14, 2012 Ok, thanks for that. Quote Link to comment Share on other sites More sharing options...
ldticp Posted May 14, 2012 Share Posted May 14, 2012 The government expect companies to make up the difference this is ridiculous. So here are 2 people doing the same job in the same situation on lets say $70k per year, 1 is Australian and 1 is a temp 457. The Australian gets 50% rebate on childcare the 457 doesnt. The 457 gets Lafha the Australian doesnt. In my case this means Australian: $70k paying $40k in childcare a year gets a 50% rebate so pays $20k 457 (me): $70k paying $40k childcare gets no rebate but gets Lafha amounting to $12k a year We pay exactly the same amount of tax otherwise yet with the scrapping of lafha I will be $20k worse off than the same Australian worker doing the same at the same money. So in order for me to get the same money as the Australian the company has to pay me somewhere near $97k to cover the difference. Not in a million years will this happen. In my opinion this change will hit families like mine the hardest with the execs who it was meant to hit just shrugging their shoulders and moving to another part of the world. Since arriving in australia we were thinking on the possibility of applying for PR after 2 years depending on how things go, however, the way it stands we won't be here for those 2 years as we cannot afford it. The net result here will be to discourage the families that Australia needs to migrate here from ever coming here in he first place and the families that are here to leave. Quote Link to comment Share on other sites More sharing options...
Guest RaoulDuke66 Posted May 15, 2012 Share Posted May 15, 2012 Concerned individuals who contacted the Treasury last week were told that a press release and exposure draft legislation in relation to LAFHA reform would be released on 14 May 2012 to clarify the chaos caused by Wayne Swann's less than transparent Budget Paper 2. This has not materialised, leaving worried 457 workers and their families in the dark once again. However, I have no doubt that this is as a result of various legal firms, accountancy firms and foreign offices, pointing out the obvious illegality of targeting 457 workers in an immediate salary grab whilst affording Australian workers the obviously required transitional period to re-arrange their existing unbreakable financial and employment obligations. The source of the illegality is the breach of Australia's tax treaties with other nations, all of which contain non-discrimination provisions applicable to the treatment of income tax and FBT. The wording in all such treaties is substantially as follows:- "Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected." The reforms breach all of these treaties because, for the first two years, only foreign workers under existing arrangements will be required to show that they maintain a home for their own use in Australia. Australians under existing arrangements will not be required to do this until July 2014. The point has nothing to with the benefits received or not received by foreign workers living in Australia. There has also been a spectacular failure to follow government guidelines in relation to consultation with stakeholders:"Policy agencies need to...provide feedback on how they have taken the consultation responses into consideration." Quote Link to comment Share on other sites More sharing options...
AoifesMum Posted May 15, 2012 Share Posted May 15, 2012 Thank for the information. Where does that leave people affected, do you know? Will the legislation be in place and pay packets reflect this come July 1st? We have to know in the next couple of days as, and I won't bore people with details, we have to make arrangements before 18th of this month. If it's definitely coming in July 1st then fine, we'll leave. If it's not, then we'll need to look into things further. Quote Link to comment Share on other sites More sharing options...
Rupert Posted May 15, 2012 Share Posted May 15, 2012 Hello everyone (again). Well.... my partners employers have stated that they have no intention of making up the shortfall in my partner's wage to cover the LAFHA loss. Now, when I spoke to Rebecca last week she said that the Treasury 'expects' employers to meet this shortfall. I am waiting a return call from her. Does anyone know how this 'expectation' can be managed if the employer simply refuses to play ball? There doesn't appear to be anything the employee can actually do to compel them to meet the shortfall. As a result we will be returning home and I was also wondering what rights we have with regard to the cost implications of breaking the employment contract - any ideas? We received relocation expenses (flights and some money towards shipping costs). I know I've read on here that the employers are responsible for return flights. We'll be left hideously in debt after this and we've no jobs to return to either. Thanks for any ideas and I hope others have had more luck with renegotiations than we have! Will you need to break your contract? i.e. not work notice. Your notice period won't be the same as your visa expiry date, it is probably a month? I *think* that the employer is obliged to pay for return flights, regardless of who gave notice. Perhaps upon resignation they will renegotiate terms anyway. Quote Link to comment Share on other sites More sharing options...
Guest RaoulDuke66 Posted May 18, 2012 Share Posted May 18, 2012 The positive news for temporary residents is that the relevant transitional elements as they are set out in the exposure draft legislation (Tax Laws Amendments (2012 Measures No.3) Bill 2012: deducting expenses for living away from home) are unlawful, as they breach all of Australia's double-taxation treaties. These treaties are incorporated into Australian domestic law through the International Tax Agreements Act 1953. This is because, in respect of existing LAFHA arrangements until July 2014, temporary residents and foreign residents will be subject to an additional restriction to which permanent residents will not be subject – namely the requirement to maintain a dwelling in Australia – in breach of the non-discrimination clauses in each treaty. Taking the UK as an example, this contravenes Article 25.1 of the UK/Australia Double Taxation Convention, because it is subjecting UK nationals to requirements connected with income tax/FBT which is "other" and "more burdensome" than requirements to which Australian nationals are subject in the same circumstances, "in particular with respect to residence". Further excellent news for UK nationals is that the Convention with the UK is the first Australian tax treaty to contain a non-discrimination article (Article 26) which gives taxpayers private rights of appeal. UK nationals have a direct right to appeal to the Australian Competent Authority, whose role includes assisting people who believe that the actions of Australia result or may result in taxation that is not in accordance with a particular tax treaty. In addition to posting this information on other forums to help people elsewhere, UK nationals who wish to oppose the discriminatory transitional arrangements, may wish to include the following material in their consultation responses (to fbt@treasury.gov.au), in their communications to the Australian Competent Authority (australiancompetentauthority@ato.gov.au), and in their communications to the further relevant contacts I've listed (see below)… "In respect of the Tax Laws Amendments (2012 Measures No.3) Bill 2012: deducting expenses for living away from home exposure draft (the "Exposure Draft"), proposed provisions in relation to Transitional – existing employment arrangements are in breach of the UK/Australia Double Taxation Convention (the "Convention") applicable to both income tax and fringe benefits tax, incorporated into Australian domestic law through the International Tax Agreements Act 1953. Article 25.1 of the Convention, states: Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. According to the ATO: Article 25 (Non-discrimination) is included to protect nationals of one country from tax discrimination in the other country. According to the HMRC explanatory memorandum: …this Article provides that neither country shall impose discriminatory taxes (or requirements) on the nationals, permanent establishments and enterprises of the other. In respect of existing LAFHA arrangements until July 2014, as set out in the Exposure Draft, "temporary residents" and "foreign residents" (which includes UK 457 visa holders) will be subject to an additional restriction to which Australian permanent residents will not be subject – namely the requirement to maintain a dwelling in Australia – in breach of the non-discrimination clause. The result is that on 1 July 2012, UK nationals already working in Australia on 457 visas under LAFHA arrangements, will overnight see a decrease in their take home pay of up to 40% and possible immediate financial ruin, whereas the Australian Government has seen fit to put full transitional arrangements in place for Australians with existing LAFHA arrangements. In his justifications, it is entirely disingenuous for the Treasurer (and those under his authority) to continually suggest that all 457 visa recipients of LAFHA are highly-paid executives. The Temporary Skilled Migration Income Threshold is $49,330, compared to the average Australian full-time salary of $68,791(Q3 2011). It is unacceptable for the Treasurer to continually suggest that foreign workers (including UK nationals) who receive LAFHA are "rorting" (Australian slang, meaning "cheating" or "defrauding") the system. The ATO website currently advises UK expatriate employees on 457 visas that they are entirely entitled to claim LAFHA if eligible under existing arrangements: Examples of employees on appointments of finite duration who will generally be living away from their usual places of residence are foreign nationals employed in Australia (expatriate employees)... In the case of expatriate employees having to reside in Australia for the term of their employment, each year we publish a tax determination outlining what we consider a reasonable food component. The proposed discriminatory transitional arrangements, based on the Treasurer's disingenuous and offensive characterisation of UK nationals claiming LAFHA in line with ATO guidance, breach Australia's obligations under the Convention and conflict with its International Tax Agreements Act 1953. Existing Australian domestic law and treaty obligations require that the transitional LAFHA arrangements applicable to July 2014, must be applied to UK nationals working in Australia on 457 visas in the same way as they will apply to Australians. In view of the Australian Government's failure (in breach of its own guidelines on public consultation) to demonstrate how previous consultation responses to the Assistant Treasurer's November 2011 consultation paper on LAFHA reform have been taken account of in the Exposure Draft (which responses explained inter alia that the Australian Government should not leave UK nationals who are tied into existing employment contracts and financial arrangements in Australia, to overnight financial ruin), it has been necessary to copy this consultation response to the following relevant parties: the Australian Competent Authority at australiancompetentauthority@ato.gov.au; Prime Minister, David Cameron, at camerond@parliament.uk; First Secretary of State, Secretary of State for Foreign and Commonwealth Affairs, William Hague, at haguew@parliament.uk; Deputy Prime Minister, Nick Clegg, at nick.clegg.mp@parliament.uk; Leader of the Opposition, Ed Miliband, at ed.miliband.mp@parliament.uk; Shadow Foreign Secretary, Douglas Alexander, at alexanderd@parliament.uk; the Foreign and Commonwealth Office, at http://www.fco.gov.uk/en/contact-us; Leader of the Australian Opposition, Tony Abbott, at Tony.Abbott.MP@aph.gov.au; and Australian Shadow Treasurer, Joe Hockey, at joe@joehockey.com." 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AoifesMum Posted May 18, 2012 Share Posted May 18, 2012 Thank you once again for such detailed and brilliant information. Does this mean that the legislation is unlikely to pass, or that it will pass and we can all appeal against it? Quote Link to comment Share on other sites More sharing options...
Rupert Posted May 18, 2012 Share Posted May 18, 2012 Thank you once again for such detailed and brilliant information. Does this mean that the legislation is unlikely to pass, or that it will pass and we can all appeal against it? Do you maintain a house in UK for your personal use? Because even if the bit of new legislation that states you have to maintain a house in Australia for your personal use was changed to say you have to maintain a house in the UK for personal use, most 457 holders I have come across would still not qualify. Some sell, some don't own one anyway and others rent it out. I have never heard of anyone leaving it empty and for their own use on the annual trip back. I think this argument is hopeful to say the least. Quote Link to comment Share on other sites More sharing options...
Guest RaoulDuke66 Posted May 18, 2012 Share Posted May 18, 2012 Do you maintain a house in UK for your personal use? Because even if the bit of new legislation that states you have to maintain a house in Australia for your personal use was changed to say you have to maintain a house in the UK for personal use, most 457 holders I have come across would still not qualify. Some sell, some don't own one anyway and others rent it out. I have never heard of anyone leaving it empty and for their own use on the annual trip back. I think this argument is hopeful to say the least. Ask yourself this. If they did change the legislation to say that, would it still breach Article 25.1? Just think about it. Second, it isn't an argument, it's a legally qualified opinion. If you want an unqualified argument, speak to the Fanning woman at the Treasury. Quote Link to comment Share on other sites More sharing options...
Guest RaoulDuke66 Posted May 18, 2012 Share Posted May 18, 2012 Thank you once again for such detailed and brilliant information. Does this mean that the legislation is unlikely to pass, or that it will pass and we can all appeal against it? Hopefully, the legislative process in Australia is robust enough to catch it. In the UK, we're lucky enough to have the House of Lords, which does the skilled technical job of properly considering the form of legislation before it passes. Legal challenges are hopefully a last resort. Quote Link to comment Share on other sites More sharing options...
AoifesMum Posted May 18, 2012 Share Posted May 18, 2012 I guess we'll find out in the coming weeks then? We've just calculated a drop in salary of 25%. Whatever happens with the legislation - and I truly hope it gets thrown out - I feel we'll probably leave anyway. The whole sorry saga has tainted my Australia experience to be honest and I just want to go home now. Fingers crossed for every who stays though. Quote Link to comment Share on other sites More sharing options...
Rupert Posted May 18, 2012 Share Posted May 18, 2012 (edited) Ask yourself this. If they did change the legislation to say that, would it still breach Article 25.1? Just think about it. Second, it isn't an argument, it's a legally qualified opinion. If you want an unqualified argument, speak to the Fanning woman at the Treasury. I am not sure what your point is. I have already stated my opinion, that even wth tweaked woding to move the discrimanation against house location, the 457 holder would still need to have a home elsewhere kept for their own personal use and I have not come across anyone that does. Genuinely interested in the legal argument, so if there is something I am missing, would be useful if you could explain rather than make patronising comments asking me to think about something because you can assume I have already done that. Edited May 18, 2012 by Rupert Quote Link to comment Share on other sites More sharing options...
Guest PatrickB Posted May 19, 2012 Share Posted May 19, 2012 See News Chat & Dilemmas, Australian Treasurer Swan's July 1 LAFA Reforms and take action! and heart........ PatrickB Quote Link to comment Share on other sites More sharing options...
AoifesMum Posted May 19, 2012 Share Posted May 19, 2012 I know this is a question without an answer, but anyway.......can anyone suggest ANYTHING we can do about any of this (apart from making our voices heard?) I feel like I'm going insane. I don't know what we're going to do - I really am not exagerating the problem when I say we could return to the UK to homelessness. I know it may sound hysterical, but the way the job market is over there I can't see us getting work and we will have massive debt here with no way of paying it off. Does anyone at all have any advice, anything we can do? I can't sleep for fretting about it and my partner's employers have basically ruled out a pay increase. We were only just managing with the LAFHA - has anyone had any success with anything? Or have any suggestions? Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted May 19, 2012 Share Posted May 19, 2012 If you have massive debt I think you should probably see a debt counsellor ... Best regards. Quote Link to comment Share on other sites More sharing options...
AJ Posted May 19, 2012 Share Posted May 19, 2012 I know this is a question without an answer, but anyway.......can anyone suggest ANYTHING we can do about any of this (apart from making our voices heard?) I feel like I'm going insane. I don't know what we're going to do - I really am not exagerating the problem when I say we could return to the UK to homelessness. I know it may sound hysterical, but the way the job market is over there I can't see us getting work and we will have massive debt here with no way of paying it off. Does anyone at all have any advice, anything we can do? I can't sleep for fretting about it and my partner's employers have basically ruled out a pay increase. We were only just managing with the LAFHA - has anyone had any success with anything? Or have any suggestions? I know you are loosing out on money here, but by going home are you not just cutting your nose off to spite your face! By your description you would be in a much worse off state by going home. At least where you are you have a job and some money coming in, if you go home you have nothing! What is the point of leaving, going back to no home, no job and even more debt?? Obviously if you are offered something you take it but is LAFHA not supposed to be for people living away from home, if you dont have a home to go back to should you really have qualified for it in the first place - not just you of course, I mean everyone in the same position. Quote Link to comment Share on other sites More sharing options...
AoifesMum Posted May 19, 2012 Share Posted May 19, 2012 We do have a home to go back to, it's whether we can afford to pay the mortgage on it that's the problem. So we did legitimately qualify for LAFHA - an allowance the employer sold to us with no mention of it's imminent withdrawal. I'm not sure I follow what you're saying? We cannot afford to live here with the loss of the LAFHA. We cannot make any additional income as we have very young children requiring child care, so we don't have the capacity to bring in extra to cover a quarter drop in salary (which actually may turn out to be a third). If we go home we MAY get jobs but at least we'd get benefits and assistance with the mortage until we could get any sort of job at all. Over here my partner won't get a better paid job for his profession and I can't work at all (I already work from home). I hope that makes sense. We are trapped because he's making as much as he can here and I can't add to that monthly income - certainly not the amounts we'll need to pay rent, car loan etc. so we don't have an option. I can't see our landlady having any sympathy when we consistently pay fail to pay the rent, or the gas company when we fail to pay the bill. Our income falls short of our outgoings EACH MONTH by many, many hundreds of dollars. Simple. Quote Link to comment Share on other sites More sharing options...
AJ Posted May 19, 2012 Share Posted May 19, 2012 Just dont depend on getting benefits when and if you come home. We were told we couldnt get family credit as they base it on last years salary and they said my OH earned too much in oz to qualify. Remember the exchange rate makes it look like you are earning much more. Its a big maybe - you maybe get jobs, may get help etc. I dont know where you are from but here where I am in Scotland, there are very few part time jobs for me, I got a weekend one in a call centre and only came out with 115 pound a week for that, hardly enough for shopping never mind anything else. good luck what ever you decide. Quote Link to comment Share on other sites More sharing options...
AoifesMum Posted May 19, 2012 Share Posted May 19, 2012 Thanks. I hope my post didn't come across as narky, it's just such an awful time for us at the moment. I need to get some proper advice before we decide anything. Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted May 19, 2012 Share Posted May 19, 2012 Are there any options for you in other places in the world - maybe Singapore, Dubai, etc? Some of these places are well worth spending time visiting/working in as part of life's journey ... Europe seems to be a basket case at the moment, so probably best avoided. Best regards. Quote Link to comment Share on other sites More sharing options...
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