AoifesMum Posted May 29, 2012 Share Posted May 29, 2012 Hello all! Due to the loss of the LAFHA (which I can't physically bring myself to write about any longer) it looks like our best bet is for me to return home to the Uk with the children and my partner to apply for work and follow on later. I know from previous threads and postings that the employer, under 457 visa sponsorship rules, is legally obliged to pay our fares back to the UK. Does anyone know the answers to the following? 1. Would they be obliged to pay our fares (me and the children) and then my partner's fare at a later date (we are moving as a sole consequence of the LAFHA changes) 2. Do they have to pay for shipment of goods? 3. Can they request we pay and they reimburse us or do they have to pay upfront? 4. If they refuse, who do I report this to, immigration? Not sure how the system works. 5. Are they responsbile for assisting my partner to relocate to a smaller apartment? ie. bonds, utilities etc. I don't mean this post to sound like we wish to bleed the company dry, though I suspect it sounds that way. The difficulty we have is that we can afford none of the above due to the loss of a quarter take-home pay (hence why we are going home). I need to find out where we stand legally and what to threaten them with if they don't honour their obligations as they have already refused to pay the flights and I know this contravenes their 457 obligations. I need to meet with them having prepared a worse-case-scenario list of what we are entitled to. Financially, following this whole hideous mess, we can't afford not to. Any help appreciated! Can't wait to get home..... Link to comment Share on other sites More sharing options...
Freckleface Posted May 29, 2012 Share Posted May 29, 2012 I wouldn't state categorically what I would be required to pay if one of my 457 staff left under these circumstances without checking with my legal team but my gut feeling is that I would only be required to pay travel costs. The company would book and pay for the airline tickets. I would not agree to pay for you and the children to go before your husband resigned (may cause other problems later if he or you changed your mind). I doubt I would be responsible for any of the other things on your list especially relocation costs for your husband to move into a smaller place. Be very careful about threatening your husbands employer or being perceived to threaten them. Link to comment Share on other sites More sharing options...
AoifesMum Posted May 29, 2012 Author Share Posted May 29, 2012 Thanks! I didn't mean 'threaten' in a malicious way - honest! To be fair, they have been ok so far (especially his immediate boss). What I meant was that I need to know what our rights are concerning all this if they do refuse to help at all. I really don't want to have to resort to quoting legalities - and if they'd just cover the flight costs that would be great - but we're in a real predicament and need to get home fast. Thanks for the advice. Link to comment Share on other sites More sharing options...
Freckleface Posted May 29, 2012 Share Posted May 29, 2012 Thanks! I didn't mean 'threaten' in a malicious way - honest! To be fair, they have been ok so far (especially his immediate boss). What I meant was that I need to know what our rights are concerning all this if they do refuse to help at all. I really don't want to have to resort to quoting legalities - and if they'd just cover the flight costs that would be great - but we're in a real predicament and need to get home fast. Thanks for the advice. This lists employer obligations but I'm no expert in this stuff as I don't deal with any of it personally. http://www.immi.gov.au/skilled/skilled-workers/sbs/obligations-employer.htm Link to comment Share on other sites More sharing options...
sussex boy Posted May 30, 2012 Share Posted May 30, 2012 Hi there, I was on a 457 for nearly 2 years before being moved onto a rms, we never claimed the lafha or new much about it, Are you really giving up life in oz for a couple thousand a year? Link to comment Share on other sites More sharing options...
AoifesMum Posted May 31, 2012 Author Share Posted May 31, 2012 It's not a couple of thousand a year, it's a couple of thousand a month (around 30K per year I think). It's almost a third of my partner's take home pay and I am unable to work to make up for it as we aren't entitled to child care assistance (unless someone wants to pay me upwards of 80K a year for a social work role - I think not). I already work a number of hours from home. We just about make ends meet at the moment and have a significantly worse standard of living, but thought we'd make the most of the experience of Oz (which we all love). We won't be able to afford basic living costs with a third reduction, could you? Link to comment Share on other sites More sharing options...
Rupert Posted May 31, 2012 Share Posted May 31, 2012 It's not a couple of thousand a year, it's a couple of thousand a month (around 30K per year I think). It's almost a third of my partner's take home pay and I am unable to work to make up for it as we aren't entitled to child care assistance (unless someone wants to pay me upwards of 80K a year for a social work role - I think not). I already work a number of hours from home. We just about make ends meet at the moment and have a significantly worse standard of living, but thought we'd make the most of the experience of Oz (which we all love). We won't be able to afford basic living costs with a third reduction, could you? Are you sure it will be as bad as that? To lose $30k a year benefit must mean you are getting $90k a year LAFHA or something is that correct? It is only the tax free benefit that is going, it doesn't mean your employer cannot pay the allowance any more, it just won't be tax free. Anyway to your questions. The employer is required to pay fares, but I don't think it will work you going first, as they only need to pay fares at the end of the visa. Otherwise you might come back and then they would still be on the hook to pay fares later, when perhaps the visa does come to an end. I think you would need to all leave together, when the job is coming to an end to get fares paid. They don't have to pay for shipment of personal effects. I cannot see any reason why they should have to assist your OH in moving to a smaller place. I cannot see any reference to whether you have to pay upfron tand get reimbursement or otherwise. Link to comment Share on other sites More sharing options...
NickyNook Posted May 31, 2012 Share Posted May 31, 2012 Completely agree with Rupert above. Your figures don't add up. You cannot (as a 2 adult, 2 child family) be getting more than $52988 LAFHA allowance. This would consist of $600 per week accommodation allowance (your actual rent as stated by you) and $419 per week (2 adult, 2 child weekly food allowance). It can only be a higher amount if you're claiming a greater rent figure than you actually pay. You currently get this amount tax-free. If you have to pay tax (post-LAFHA) on it, I'd estimate you'd probably be paying $19600 (37% of $52966?). Your tax rate won't be higher than that as you have to earn more than $180k a year to move to the next tax bracket. So you'd lose almost 20k a year (maximum). Your husband must be earning a minimum of $100k because the amount left after the LAFHA allowance cannot be less than around $47k. So, assuming he is on the minimum $100k: Before LAFHA is removed he would pay $7539 tax and take home $92461. After LAFHA is removed he would pay $26700 tax and take home $73300. A difference of $19161 and a reduction of 20%. If he's on more than $100k, then the reduction % is even smaller. :biggrin: Link to comment Share on other sites More sharing options...
robfromdublin Posted May 31, 2012 Share Posted May 31, 2012 A 20% reduction in pay is still a lot. I'd certainly be considering my options if $19k a year was taken off me Link to comment Share on other sites More sharing options...
Rupert Posted May 31, 2012 Share Posted May 31, 2012 A 20% reduction in pay is still a lot. I'd certainly be considering my options if $19k a year was taken off me Yes it is indeed still a lot, but it is not a third, it is 20% *maximum* (i.e. could be less) and it doesn't look like it could be $2k a month. I just wanted to make sure that Aofesmum was basing decisions on correct information; bearing in mind that this is not implemented yet so she will not have seen it in the bank balance yet. Link to comment Share on other sites More sharing options...
AoifesMum Posted May 31, 2012 Author Share Posted May 31, 2012 Thanks everyone, I do appreciate your posts as I could very well have it incorrectly worked out. BUT, I know how much he makes net per month at the moment and when I worked out his tax on his gross pay after LAFHA goes, the difference was indeed $2,000. These figures may indeed be wrong as we are yet to hear back from his employers with his net figure after July 1st, so we're not making any decisions yet. Have I calculated that correctly then? Following the withdrawal of LAFHA his pay will revert to gross pay per annum and his net pay can be calculated using the on-line calculator (for example, something like 25K on a 100K salary will be taken as tax). Maths not being my strong point and all. Link to comment Share on other sites More sharing options...
NickyNook Posted May 31, 2012 Share Posted May 31, 2012 I'm pretty good with figures :wink: and, yes, on $100k salary you would pay normally pay $25k in tax. I did some more number-crunching based on your projected $2k monthly loss, and I can only deduce that you currently get a whopping $65k a year in tax-free LAFHA. The food component is fixed at $419 per week so you must be getting a very large rental allowance of $43k - which far more than you pay ($31k). I always thought that the LAFHA rent allowance was based on actual rent but maybe it's not. I guess if the ATO is happy with it (are they?), it must be OK. Anyway, no-one's annual salary can be reduced to below $49330 by LAFHA - so if your husband is getting $65k tax-free and $49k taxed then his gross is $114k-$115k and he currently nets around $106k. When he pays tax on the $114k-$115k at the proper rate, he will net about $82k. This neatly fits with your stated $24k annual reduction in income. My figures are only based on what you have said here - they may be wrong (but I suspect not). Frankly I'm gobsmacked that anyone (regardless of who they are and where they come from) can earn well over $100k and yet only pay a miserly $8362 in tax. I know that this is not the topic here but I can well understand why the government want to close this little loophole. Link to comment Share on other sites More sharing options...
Joebloggs Posted May 31, 2012 Share Posted May 31, 2012 My figures are only based on what you have said here - they may be wrong (but I suspect not). Frankly I'm gobsmacked that anyone (regardless of who they are and where they come from) can earn well over $100k and yet only pay a miserly $8362 in tax. I know that this is not the topic here but I can well understand why the government want to close this little loophole Rort. Fixed that up for you. Link to comment Share on other sites More sharing options...
robfromdublin Posted May 31, 2012 Share Posted May 31, 2012 Now all Australia needs to do is fix the negative gearing rort and we might get a progressive tax system. Fat chance of that happening though. They're happy to pick on 457 holders but god help them if they pick on property speculators! Link to comment Share on other sites More sharing options...
AoifesMum Posted June 1, 2012 Author Share Posted June 1, 2012 Thank you very much for your calculations and to Joe Bloggs for pointing out that we are 'rorting' the system (with your accurate edit of the previous post). That was our intention when we came to Australia, obviously. We took complete advantage of the UK system for many years (hmmmm, don't think we ever claimed anything apart from child benefit and worked for three quid an hour at one point to avoid having to go on the dole) but we are, indeed, 'rorters' who knew, in depth, the Australian tax system before we came over, as I'm sure all expats do. We searched the world for a country we could exploit as we are freeloaders and would happily take without giving, have done all our lives. The actual truth of the matter was that we were legally offered a job which included LAFHA and did our sums based upon that. Ok, it's going and it may not have been fair but I resent the implication that we came over here to exploit anything at all, we did not and I find it offensive to us (and many others who were offered LAFHA and claimed it quite legitimately) to say we were 'rorting' the system. I'll certainly pass that on to my partner who works full time and puts in a good 3 hours unpaid overtime each evening, including weekends. Cheers. Link to comment Share on other sites More sharing options...
Rupert Posted June 1, 2012 Share Posted June 1, 2012 I am wondering if Joe meant the employer was rorting the system, i.e. using LAFHA to avoid having to pay a salary that was acceptable to you. Clearly the $115k or whatever it is, is not acceptable and it would have taken more like $150k plus to provide the take home pay and lifestyle you would like but the employer was not willing to pay that. Link to comment Share on other sites More sharing options...
robfromdublin Posted June 1, 2012 Share Posted June 1, 2012 I really don't understand why some people think it's a rort. It's just a feature of the tax system. Is child benefit a rort in the UK? Is negative gearing a rort? Is claiming tax back on work-related expenses a rort? None of these things are illegal as long as they are applied in the right way. Are they right and just? Well that's down to personal ideology as much as anything else. Link to comment Share on other sites More sharing options...
Rupert Posted June 1, 2012 Share Posted June 1, 2012 I really don't understand why some people think it's a rort. It's just a feature of the tax system. Is child benefit a rort in the UK? Is negative gearing a rort? Is claiming tax back on work-related expenses a rort? None of these things are illegal as long as they are applied in the right way. Are they right and just? Well that's down to personal ideology as much as anything else. I don't think getting $65k+ of earnings tax free is quite the same as claiming work expenses or child benefit. The rort is because it is not an intended feature of the tax system, it was intended as an allowance for people living away from home i.e. to compensate them for running two homes, however most 457 holders are not doing this and the employers were simply using it to make savings on their salary bill. Link to comment Share on other sites More sharing options...
AoifesMum Posted June 1, 2012 Author Share Posted June 1, 2012 Maybe he was referring to the employers, but hey-ho. It is what it is. My point is that we are not looking for a champaigne lifestyle or to get money for nothing. To be honest, I think the allowance should have been abolished BUT there should be something in place to assist people who made honest decisions to come to Australia based upon figures quoted by their employer, such as the transitionary period residents get. I think it's very unfair to do this at such short notice. Another point - if I didn't have very young children (which means I'm unable to work myself) I'd simply get a job. Whatever, this debate will go on and on, I just think it unfair that it's been passed so quickly and with such little notice (the Treasury say we have known about this since November last year but I don't know of any employers who made any provision for their staff prior to the May budget announcement). Link to comment Share on other sites More sharing options...
robfromdublin Posted June 1, 2012 Share Posted June 1, 2012 And if you were to claim $65k+ of earnings tax free because of negative gearing, that is different is it? It was an example. Whether it's $65k or $650 is neither here nor there. A rort is illegal. LAFHA for 457s is legal. Regardless of what was originally intended for LAFHA, the interpretation for 457 holders was looked at by ATO and they gave the thumbs up, so they are perfectly happy with it. Now the government of the day has decided they don't like it so they're getting rid of it. That's fine, I happen to agree with their approach. However, it still doesn't make it a rort or somehow defrauding the tax system. Link to comment Share on other sites More sharing options...
NickyNook Posted June 1, 2012 Share Posted June 1, 2012 Treasurer Wayne Swan thinks it's a rort :wink: '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.' http://www.treasurer.gov.au/DisplayDocs.aspx?doc=pressreleases/2011/148.htm&pageID=003&min=wms&Year=&DocType= However, I don't think for a moment that the OP (or her husband) is doing any rorting. The blame lies 100% with the employers here. Link to comment Share on other sites More sharing options...
robfromdublin Posted June 1, 2012 Share Posted June 1, 2012 Ha! Well if he thinks it's a rort, why did he allow it as treasurer for 5 years? I suspect his choice of words is mere populism. Link to comment Share on other sites More sharing options...
Joebloggs Posted June 1, 2012 Share Posted June 1, 2012 Yes I was referring mostly to employers as the Australian government eluded to it on this page. http://migrationblog.immi.gov.au/2012/02/09/proposed-changes-to-living-away-from-home-allowance-lafha-benefits-for-subclass-457-visa-holders/ Really it says employers exploited the use of LAFHA by offering a lower taxable salary than Australian citizens & residents and getting the ATO to foot the bill. On the other hand I don't buy into the whole extra cost of schooling, child care, no access to benefits, maintaining a house overseas etc for 457 holders. Firstly plenty of 457 holders don't have kids, don't pay school fees, don't own a home in their source countries and still claim LAFHA. And secondly 457 are not Australian citizens or residents, Australia is a sovereign country in its own right and it should not be frittering away money on foreigners like the UK and Ireland does. If an employer feels they need someone to fill the gap in skills then they should be paying above the going rate to compensate those for the additional cost of living as non-resident in Australia. Other wise the most simple solution is for the employee to apply for Permanent residency, then they can claim to be on the even playing field. Link to comment Share on other sites More sharing options...
robfromdublin Posted June 1, 2012 Share Posted June 1, 2012 457 holders are Australian residents, obviously. There are loads of extra expenses that 457 holders are subject to, and plenty of benefits that they aren't eligible for, whether you 'buy into' it or not. The employer should cover any shortfall though, not the government, so I agree with you there. I'm not sure what you mean by UK & Ire 'frittering away money on foreigners'. No LAFHA there. Link to comment Share on other sites More sharing options...
Guest guest36187 Posted June 1, 2012 Share Posted June 1, 2012 I got here on a 457. No LAFHA, no assistance from my sponsoring company. I had to fund everything myself. 457 holders are Australian residents for tax purposes Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.