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Dunwa

LAFHA announcement in the budget ?

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Reading in the Sydney Morning Herald today, they are expecting an announcement about LAFHA tomorrow. Unfortunately they are expecting it to be implemented as proposed with not alterations


22/02/11 First employer interview - 06/04/11 Second employer Interview - 13/05/11 Offer of employment - 05/06/11 Documentation submitted - 08/06/11 457 Visa application lodged. 28/06/11 - Applicant Approved 27/08/11 - Arrived Sydney, NSW.

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Does that mean it will no longer be available?


I just want PIO to be a happy place where people are nice to each other and unicorns poop rainbows

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Guest Guest31881
Does that mean it will no longer be available?

 

I believe it will be available to people who live in Australia and have to work /live away from home. The allowance at the moment is being paid to some temporary visa holders who are classed as living away form home because their permanent home is still classed as the UK. That is the part that is being stopped as far as I understand it. Some TR visa holders will be a lot worse off, some have employers who say they will make the difference up.

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Reading in the Sydney Morning Herald today, they are expecting an announcement about LAFHA tomorrow. Unfortunately they are expecting it to be implemented as proposed with not alterations

 

Federal Government politics dictate ... the Government has said it will return the Budget to surplus, and with the tax clawback from the LAFHA withdrawal factored into the Budget Estimates it is improbable there will be significant changes ... but a week is a long time in politics!

 

Best regards.


Managing Director, Go Matilda Visas - www.gomatilda.com

Registered Migration Agent Number 0102534; Registered Tax Agent (Australia)

Chartered Accountant (UK, and Australia)

T - 023 81 66 11 55 (UK) or 03 9935 2929 (Australia)

E - alan.collett@gomatilda.com and acollett@bdhtax.com

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Ouch .... If you are a non-resident worker…It's all bad news. Firstly, most of you will lose the Living Away from Home Allowance (see below), and from 1 July all non-resident workers will have to pay a blanket 32.5 per cent tax rate – regardless of whether they're low income earners.

 

http://www.news.com.au/money/cost-of-living/budget-story-1/story-fnagkbpv-1226350235644

Edited by Dunwa

22/02/11 First employer interview - 06/04/11 Second employer Interview - 13/05/11 Offer of employment - 05/06/11 Documentation submitted - 08/06/11 457 Visa application lodged. 28/06/11 - Applicant Approved 27/08/11 - Arrived Sydney, NSW.

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Ouch .... If you are a non-resident worker…It's all bad news. Firstly, most of you will lose the Living Away from Home Allowance (see below), and from 1 July all non-resident workers will have to pay a blanket 32.5 per cent tax rate – regardless of whether they're low income earners.

 

http://www.news.com.au/money/cost-of-living/budget-story-1/story-fnagkbpv-1226350235644

 

Regarding the second bit of that, non resident worker should not be confused with 457 worker of course. (Not saying you are not aware of this Dunwa, just thought I would point it out for anyone else reading that might).

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Regarding the second bit of that, non resident worker should not be confused with 457 worker of course. (Not saying you are not aware of this Dunwa, just thought I would point it out for anyone else reading that might).

 

 

Just to clarify the 457 workers won't be paying more tax than they are now?

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Got this info from the news.com.au website and was wondering if it is true i.e. Lafha will be stopped even if you own a property in the uk and are on a 457 visa

 

If you receive LAFHA…

You're not laughing anymore and will have to say cheerio to the lucrative Living-Away-From-Home-Allowance.

 

The new reforms mean it can only be used for the expenses of people who are legitimately maintaining a second home in addition to their actual home. So, Ireland or England doesn't count as a second home for most people who are here on a working holiday and 457 visas. It was good while it lasted - sorry guys.

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Further muddying the waters :

 

http://www.budget.gov.au/2012-13/content/bp2/download/bp2_consolidated.pdf

 

Page 24/25

 

"The Government will further reform the tax concession for living-away-from-home

allowances and benefits by better targeting it at people who are legitimately

maintaining a second home in addition to their actual home for an initial period. This

measure builds on the reforms announced in the 2011-12 MYEFO measure Fringe

benefits tax — reform of living-away-from-home allowances and benefits by:

 

• limiting access to the tax concession to employees who maintain a home for their

own use in Australia, that they are living away from for work; and

• providing the tax concession for a maximum period of 12 months in respect of an

individual employee for any particular work location.

 

These further reforms will stop employers from being able to give the tax concession to

employees who aren’t maintaining a second home, or are maintaining two homes

indefinitely.

 

This measure will not affect:

 

• the tax concession for ‘fly-in fly-out’ arrangements, as these employees will not be

subject to the 12 month time limit; or

• the tax treatment of travel and meal allowances, which are provided to employees

who have to travel away from their usual place of work for short periods (generally

up to 21 days).

 

The reforms will apply from 1 July 2012 for arrangements entered into after 7.30pm

(AEST) on 8 May 2012, and from 1 July 2014 for arrangements entered into prior to that

time.

The Government will consult with tax experts and employers on the technical detail of

the legislation.

 

The measure will provide savings to the Budget of $1,001.3 million over the forward

estimates period, including an increase in GST payments to the States and Territories

of $9.0 million.

 

This measure further progresses a recommendation of the Australia’s Future Tax System

review, and builds on the Government’s growing record of tax reform."


22/02/11 First employer interview - 06/04/11 Second employer Interview - 13/05/11 Offer of employment - 05/06/11 Documentation submitted - 08/06/11 457 Visa application lodged. 28/06/11 - Applicant Approved 27/08/11 - Arrived Sydney, NSW.

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Guest
Further muddying the waters :

 

http://www.budget.gov.au/2012-13/content/bp2/download/bp2_consolidated.pdf

 

Page 24/25

 

"The Government will further reform the tax concession for living-away-from-home

allowances and benefits by better targeting it at people who are legitimately

maintaining a second home in addition to their actual home for an initial period. This

measure builds on the reforms announced in the 2011-12 MYEFO measure Fringe

benefits tax — reform of living-away-from-home allowances and benefits by:

 

• limiting access to the tax concession to employees who maintain a home for their

own use in Australia, that they are living away from for work; and

• providing the tax concession for a maximum period of 12 months in respect of an

individual employee for any particular work location.

 

These further reforms will stop employers from being able to give the tax concession to

employees who aren’t maintaining a second home, or are maintaining two homes

indefinitely.

 

This measure will not affect:

 

• the tax concession for ‘fly-in fly-out’ arrangements, as these employees will not be

subject to the 12 month time limit; or

• the tax treatment of travel and meal allowances, which are provided to employees

who have to travel away from their usual place of work for short periods (generally

up to 21 days).

 

The reforms will apply from 1 July 2012 for arrangements entered into after 7.30pm

(AEST) on 8 May 2012, and from 1 July 2014 for arrangements entered into prior to that

time.

The Government will consult with tax experts and employers on the technical detail of

the legislation.

 

The measure will provide savings to the Budget of $1,001.3 million over the forward

estimates period, including an increase in GST payments to the States and Territories

of $9.0 million.

 

This measure further progresses a recommendation of the Australia’s Future Tax System

review, and builds on the Government’s growing record of tax reform."

 

If that's true you have absolutely made my day

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Existing arrangements (pre 8th may 2012) to remain until 1 July 2014. Everything else is a goner.

Unclear if existing arrangements will need to be backed up with proof in order to keep it. Best result possible for those already here. Serious knock for those just coming out and planning on getting it. To be fair, it has been earmarked since Nov 2011.

 

 

---

I am here: http://tapatalk.com/map.php?bjkhsk

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Existing arrangements (pre 8th may 2012) to remain until 1 July 2014. Everything else is a goner.

Unclear if existing arrangements will need to be backed up with proof in order to keep it. Best result possible for those already here. Serious knock for those just coming out and planning on getting it. To be fair, it has been earmarked since Nov 2011.

 

 

---

I am here: http://tapatalk.com/map.php?bjkhsk

 

I think this is fantastic news. Yes, it will be scrapped for new arrivals but, as you point out, this has been in the pipeline for some time and so I suspect most people have not based their budget on receiving it. For those of us who are already here and had no idea this was proposed until we'd up sticks to the other side of the world, at least this gives us time to make arrangements, plan etc. It's the fairest way to implement it. We were in a situation where we would have had to return to the UK had this gone ahead on 1st July (2 young children, no child care assistance = I would be paying to work). This is such a relief for us, but obviously a disapointment for people planning to come out.

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So far as I can see this is excellent news for those of us already here and claiming. TBH, LAFHA had no bearing on our decision to come here, but you do get used to it, and it does help as you are settling in and having to set yourself up in a new country. In two years time most of us on it will have chosen to move to PR and lose it voluntarily anyway, and those coming in will set their budget on the basis of what they get without out. It was a profoundly cynical budget (take money from those who won't, or can't, vote for us, give it to those who can and will - a 'core vote' strategy if ever there was one) but at least on this issue someone did some useful lobbying and pointed out the impact on existing 457 visa holders. I'm not sure, in the big picture, what difference it will make to Australia's ability to secure overseas talent, but LAFHA was always an easy target, for the simple reason that no one who votes gets it, and Aussie voters were never likely to be sympathetic to tax concessions aimed at non-citizens.

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So far as I can see this is excellent news for those of us already here and claiming. TBH, LAFHA had no bearing on our decision to come here, but you do get used to it, and it does help as you are settling in and having to set yourself up in a new country. In two years time most of us on it will have chosen to move to PR and lose it voluntarily anyway, and those coming in will set their budget on the basis of what they get without out. It was a profoundly cynical budget (take money from those who won't, or can't, vote for us, give it to those who can and will - a 'core vote' strategy if ever there was one) but at least on this issue someone did some useful lobbying and pointed out the impact on existing 457 visa holders. I'm not sure, in the big picture, what difference it will make to Australia's ability to secure overseas talent, but LAFHA was always an easy target, for the simple reason that no one who votes gets it, and Aussie voters were never likely to be sympathetic to tax concessions aimed at non-citizens.

 

Exactly, well put! I think this si the best it could get for people already claiming. PR looks very appealing after this.

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Guest haunted1234

hubbys employers have stated they will make up his salary OR sponsor him for PR, so its a win win for us really......:wink:

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Bad, bad news. I suggest anyone claiming LAFHA ring Rebecca Fanning (02) 6277 7340 at the Teasury. Spoke to her and used my situation as the example and she said all 457 visa holders will lose it as of July 01st 2012. The extension will only apply to Australian residents who are already in an agreement.

 

Talk about an emotional rollercoaster :mad:


22/02/11 First employer interview - 06/04/11 Second employer Interview - 13/05/11 Offer of employment - 05/06/11 Documentation submitted - 08/06/11 457 Visa application lodged. 28/06/11 - Applicant Approved 27/08/11 - Arrived Sydney, NSW.

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Bad, bad news. I suggest anyone claiming LAFHA ring Rebecca Fanning (02) 6277 7340 at the Teasury. Spoke to her and used my situation as the example and she said all 457 visa holders will lose it as of July 01st 2012. The extension will only apply to Australian residents who are already in an agreement.

 

Talk about an emotional rollercoaster :mad:

 

That was NOT what was announced.

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Guest Olibear

 

Have just posted this in another thread so will duplicate here.

 

I'm sorry to say that even if you are on LAFHA already, the liklihood is that it will stop come July. You need to have a home in Australia AND be living away from it in order to qualify:

 

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
, based on what was announced in the Australian Budget on 8 May 2012 and subsequently clarified by Australian Treasury late on the 9
th
of May 2012.

 

Please note that this information is based on the Federal Budget announcement only
. The actual LAFH Legislation that has to be passed by Australian Parliament has not yet been created.

 

I have done my own calculations and based on my current LAFHA allowances, I will loose $1000 a month cash. To maintain the same pay after tax etc, then I will need a payrise of around $14,000 (and not 12x$1000).

 

I have to say that although I wholeheartedly agree that it should be taken away, I'm going to be a bit in strife without it...wife and two kids on an already comparitively low salary.

 

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I have just spoken with OnCore who deal with my LAFHA and they have confirmed it's business as usual. They have a sector that specialises in this. They are still in talks with the treasury etc.. but he was happy to state that it will continue until 2014. Only Australians will be allowed to apply for it from now on though (well people who maintain a home here)

 

If I do lose this I am sure alot of 457 visa holders will be in trouble. People talk about returning to the UK but that isn't even anoption for me as I have not saved enough money in my 9 months here to even do that and definitley won't be able to in my remaining 3 years if this is taken away in July 2012.

 

My boss would not be able to increase my wage by 14k as I feel I am on the money for this salary as a draftsman. If they do remove it I can personally say moving here will be the worst mistake of my life...I have 3 kids to support which is already harder here than I thought.

 

ginger

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So the government say one thing, change their mind the next day - and the whole thing needs to go out for consultation anyway even though the changes may be implemented in less that 2 months. What a mess!

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I've just called Rebecca Fanning at the treasury and am waiting for her to call back. Hopefully I will get some solid info for us all rather than hearsay as this is messing with my head....

 

ginger

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Look forward to your sharing your response ginger.

 

Lisa

 

 

I've just called Rebecca Fanning at the treasury and am waiting for her to call back. Hopefully I will get some solid info for us all rather than hearsay as this is messing with my head....

 

ginger

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If I do lose this I am sure alot of 457 visa holders will be in trouble. People talk about returning to the UK but that isn't even anoption for me as I have not saved enough money in my 9 months here to even do that and definitley won't be able to in my remaining 3 years if this is taken away in July 2012.

 

ginger

 

If you did have to return and you're on a 457, your employer would be responsible for your airfares.

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I have just spoken with OnCore who deal with my LAFHA and they have confirmed it's business as usual. They have a sector that specialises in this. They are still in talks with the treasury etc.. but he was happy to state that it will continue until 2014. Only Australians will be allowed to apply for it from now on though (well people who maintain a home here)

 

If I do lose this I am sure alot of 457 visa holders will be in trouble. People talk about returning to the UK but that isn't even anoption for me as I have not saved enough money in my 9 months here to even do that and definitley won't be able to in my remaining 3 years if this is taken away in July 2012.

 

My boss would not be able to increase my wage by 14k as I feel I am on the money for this salary as a draftsman. If they do remove it I can personally say moving here will be the worst mistake of my life...I have 3 kids to support which is already harder here than I thought.

 

ginger

 

Hi Ginger, let us know how you get on. We're in exactly the same situation and I'm so angry I could scream. I can't work away from home (though I do some home-based work) as we can't afford childcare. If we lose LAFHA we will have to go home, but have no money to get home and no jobs. This absolutely stinks.

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