marta Posted September 20, 2011 Share Posted September 20, 2011 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: Link to comment Share on other sites More sharing options...
Ian Lindgren Posted September 21, 2011 Share Posted September 21, 2011 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: Hi Marta, Happy to assist! Let me clarify: If you are on a 457 Visa and you intend to remain in Australia, have told your employer and applied for PR, you are unfortunately not eligible for LAFHA. The type of position, temporary or ongoing has no bearing on it; just intent. Therefore if you are in what an employer calls an ongoing position, but you do intend to return home at the end of your 457 period, then you may be eligible for LAFHA, in fact it’s very likely that you are. Regards, Ian Link to comment Share on other sites More sharing options...
marta Posted September 21, 2011 Author Share Posted September 21, 2011 Thanks for your help! I am actually asking on behalf of my partner who has an ongoing position at Melbourne Uni. I am only sponsored by him and looking for work. So the problem we now seem to have is: the position is ongoing but there was no talk about PR, however, we got the impression that the department literally expects us to stay on ("forever"?) as soon as my partner's probationary period is over which will be in 2014, the year our visa is about to expire. I don't know what to make of this... Shall we ask the employer about PR directly, or is this something they should offer us in their own time? Thanks again! Link to comment Share on other sites More sharing options...
Ian Lindgren Posted September 21, 2011 Share Posted September 21, 2011 OK, well that sounds a lot simpler! So from what I read, your partner has not applied for PR. Therefore he is on a 457 Visa and that ends at a specific date. All things being equal, if he intends to return home at this moment in time, and the next year or so, then he is very likely to be eligible for LAFHA. Of course as you will read below it is not that simple, every case must be considered on its merits, and then you have to get the employer in the knowledge loop so they say yes, not no. No one can force your partner to apply for a PR, and even if they want him forever, he is the sole person that decides if he wants to stay permanently. If he still wants to go home at the end of his Visa, then he will. As for asking about a PR through his employer, well that’s not my subject area, I’m not sure how to apply for PR, but Alan Collett from Go Matilda writes regularly in these columns and many people are very happy with his services. He may be able to assist on the PR side and certainly on any UK Tax issues. His details are below: __________________ Managing Director, Go Matilda, http://www.gomatilda.com Registered Migration Agent Number 0102534 and Chartered Accountant (England & Wales, and Australia) Offices in the UK and in Australia The other things you need to know about LAFHA are that most employers are unaware of it and in my opinion LAFHA is the most misunderstood and underutilised allowance in Australia for three reasons: The first reason is that there is no one repository of current knowledge on the ATO web site, The second reason is that LAFHA has the word "Allowance in it". This means to most people, that they have to pay you more! When in fact your taxable salary is reduced by the LAFHA amount you claim, so there is no more for your employer to pay. They pay less tax on you, and you get in the hand what they do not pay. The other reason is that LAFHA is administered under the Fringe Benefits Tax (FBT) Act, and because people (including accountants, CFOs and payroll officers do not know all there is to know about LAFHA), they automatically take a defensive stance and say "No to LAFHA" because they think it attracts FBT. It does not as long as it is paid correctly. The major thing to remember is that LAFHA is not an entitlement; it is only paid if the employer agrees to pay it. If you are eligible for LAFHA and do not receive it, then you lose between $6,000 and $15,000 cash in hand per year. LAFHA can continue for the whole 4 years you are on a 457 visa, so long as you intend to return home. The moment you decided not to return home and apply for PR, LAFHA must stop. The major things to remember about LAFHA are that: Each case must be considered on its own merits You must intend to return home at this moment (you can change your mind) your accommodation costs must be “reasonable”, ie not a penthouse unless you are on $300,000 per year and a senior employee, but also not a hovel! Your meals costs are fixed by the ATO each year on 1 April. Never let anyone tell you to claim anything that is blatantly illegal or double dipping; You've got to ask yourself, hand on heart, if I was questioned by the ATO, could I win because I was truthful? Never let anyone contact your employer about providing you with LAFHA. That will get your employer off side (as you have already mentioned), so always control the communications yourself. It does not cost your employer any more money, and does not attract Fringe Benefits Tax is paid correctly. You can also claim things like: Removal and insurance of household effects to Australia and back home Temporary accommodation at home before you leave, and in Australia, and the same on the way home Storage of furniture at home Telephone, gas and electricity connection Leasing of household goods Return flights back home during your temporary stay in Australia Never be afraid to seek assistance from a LAFHA adviser because the last thing you want to give the employer is a problem...instead you want to give them an issue and a solution. Once your employer is certain that they “know they can legally pay you LAFHA at no additional cost and with no FBT, then you are usually on your way to being paid LAFHA correctly. I hope I have helped. Regards, Ian Link to comment Share on other sites More sharing options...
marta Posted September 22, 2011 Author Share Posted September 22, 2011 Many thanks for your extensive comments! That's been extremely helpful! Link to comment Share on other sites More sharing options...
Guest Emily82Surf Posted September 24, 2011 Share Posted September 24, 2011 Oooooh, I think I fit into this category ) How do I go about starting the negotiations with my employer? (Queensland Health) Emily Link to comment Share on other sites More sharing options...
Ian Lindgren Posted September 25, 2011 Share Posted September 25, 2011 Oooooh, I think I fit into this category ) How do I go about starting the negotiations with my employer? (Queensland Health) Emily Hi Emily, Now I don’t know your circumstances, but as a rule the first thing I’d say is to approach Queensland health. Being a government agency they are very likely to know about LAFHA, and in fact on a Google search I have found the reference here: http://www.health.qld.gov.au/qhpolicy/docs/pol/qh-pol-126.pdf. I have had a read, and it’s 90% correct, 10% not correct, specifically when it mentions incidentals, because there are no incidentals in LAFHA. But I do understand what they are saying, however most people will just get confused because it has been placed in the wrong context. So go and ask I would say, you probably have a good chance if you are a 457 visa holder who is intending to return home at the end if the visa (at this point in time). Regards, Ian Link to comment Share on other sites More sharing options...
Guest Emily82Surf Posted September 25, 2011 Share Posted September 25, 2011 Thanks very much Ian. I read that article, but it further confused me!! I will go and ask them this week I think. It's definitely worth a try! Thanks again for your input. Emily Link to comment Share on other sites More sharing options...
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