LAFHA changes?

[Joebloggs]

There are loads of examples of why this change in policy will affect people and how it could end up driving away and/or putting off skilled workers emigrating to Australia.

 

In fairness if you emigrate you wouldn't be entitled to LAFHA anyway (unless you employer send you interstate or something).

[Team Rennolds]

In fairness if you emigrate you wouldn't be entitled to LAFHA anyway (unless you employer send you interstate or something).

 

On a 457 visa you are currently entitled to claim LAFHA as it is a temporary visa provided you meet the criteria. On this visa you cannot claim education subsidies etc as you are a temporary resident. The debate is that these visa holders who are being actively recruited by companies looking to fill a gap in the market will be considerably financially worse off due to the gap between the cost of living and income. This gap has been filled by LAFHA ( albeit exploited by some people) and has made a viable option for all parties.

 

Therefore in my opinion it's a success for everyone with the immigrants coming in and striving to succeed with their industry relevant experience. This helps their new employer produce more profits, the economy benefit from taxes paid by the immigrant and the higher profits generated by the companies.

 

My thoughts here are straightforward. If a company want my skills and experience but I'm going to be considerably worse off by taking the role then I would not be doing the right thing for my family no matter how much better the lifestyle. I would expect to go home with the same amount or more financially each month. The question in some ways is do the recruiting companies pay more money to attract the workers from overseas or does the government keep LAFHA or other benefits to help keep the economy moving?

 

Lots of posts on this and other sites comment on how these visa holders are now questioning the ability to stay in Australia as the figures just don't add up. LAFHA could be scrapped but the educational and other subsidies that permanent residents get will then need to be applied across all residents. The government has got a major decision here that will not be taken lightly as they still want to attract skilled workers to Australia over other competing countries.

[Joebloggs]

On a 457 visa you are currently entitled to claim LAFHA as it is a temporary visa provided you meet the criteria. On this visa you cannot claim education subsidies etc as you are a temporary resident. The debate is that these visa holders who are being actively recruited by companies looking to fill a gap in the market will be considerably financially worse off due to the gap between the cost of living and income. This gap has been filled by LAFHA ( albeit exploited by some people) and has made a viable option for all parties.

 

Therefore in my opinion it's a success for everyone with the immigrants coming in and striving to succeed with their industry relevant experience. This helps their new employer produce more profits, the economy benefit from taxes paid by the immigrant and the higher profits generated by the companies.

 

My thoughts here are straightforward. If a company want my skills and experience but I'm going to be considerably worse off by taking the role then I would not be doing the right thing for my family no matter how much better the lifestyle. I would expect to go home with the same amount or more financially each month. The question in some ways is do the recruiting companies pay more money to attract the workers from overseas or does the government keep LAFHA or other benefits to help keep the economy moving?

 

Lots of posts on this and other sites comment on how these visa holders are now questioning the ability to stay in Australia as the figures just don't add up. LAFHA could be scrapped but the educational and other subsidies that permanent residents get will then need to be applied across all residents. The government has got a major decision here that will not be taken lightly as they still want to attract skilled workers to Australia over other competing countries.

 

You don't emigrate on a 457..... like you say its only a temporary visa which is just really a foreign worker work permit, if for instance you did emigrate then Australia would be your home so how can you claim to be to Living away from home?

 

The reason its being scrapped was some employers were exploiting overseas workers by reducing their Salary but increasing their tax free allowance. If they do scrap LAFHA then the employer will have to make sure that the employee is paid the same as everyone else.

 

http://migrationblog.immi.gov.au/2012/02/09/proposed-changes-to-living-away-from-home-allowance-lafha-benefits-for-subclass-457-visa-holders/

 

From the department’s perspective, if an employer committed to pay a subclass 457 visa holder LAFHA, it is expected this payment will continue. The only difference will be how the Australian Taxation Office (ATO) views such payments.

 

For example, if a sponsor committed to pay a subclass 457 visa holder a base salary of $75 000 plus a $10 000 LAFHA, the department expects the employee will continue to be paid a total of $85 000.

 

If a sponsor is unable to pay the amount equivalent to the LAFHA they may be failing their sponsorship obligations.

 

A sponsor may decide to lodge a new nomination application to amend the salary offered to the 457 visa holder. However, the sponsor must demonstrate that the new salary continues to be the market salary rate.

 

 

 

To some employers there will no longer be a financial benefit to sponsor an overseas worker, which means they might not bother sponsoring in the first place.

 

To those employers who are genuinely interested in skills & experience then they will have to be willing to pay more in order to offset the extra cost that 457 holders have to pay (ie school fees etc) which is fair enough.

[Team Rennolds]

You don't emigrate on a 457..... like you say its only a temporary visa which is just really a foreign worker work permit, if for instance you did emigrate then Australia would be your home so how can you claim to be to Living away from home?

 

The reason its being scrapped was some employers were exploiting overseas workers by reducing their Salary but increasing their tax free allowance. If they do scrap LAFHA then the employer will have to make sure that the employee is paid the same as everyone else.

 

http://migrationblog.immi.gov.au/2012/02/09/proposed-changes-to-living-away-from-home-allowance-lafha-benefits-for-subclass-457-visa-holders/

 

 

 

To some employers there will no longer be a financial benefit to sponsor an overseas worker, which means they might not bother sponsoring in the first place.

 

To those employers who are genuinely interested in skills & experience then they will have to be willing to pay more in order to offset the extra cost that 457 holders have to pay (ie school fees etc) which is fair enough.

 

Hi Joe

 

I agree with your points as I think we both agree that it needs to be financially viable for all parties involved. Good to read some open minded views which don't just dismiss people's concerns as a fuss about nothing.

 

Cheers

[Loopylu]

Hi Joe

 

I agree with your points as I think we both agree that it needs to be financially viable for all parties involved. Good to read some open minded views which don't just dismiss people's concerns as a fuss about nothing.

 

Cheers

 

I totally agree. I can't believe the speed with which the Aus government here makes changes to tax incentives/breaks which have far reaching effects on ordinary people's lives. For example, the latest move of taking away the private health rebate is a real kick in the teeth to middle Australia. This government seems to want to penalise hard working, well educated people and reward laziness and underachievement. It's getting as bad as or perhaps even worse than the UK in that regard. I earns roughly the same as what I did in the UK (and work longer hours) but my mortgage repayment (for equivalent house to what I had in the UK) is 3x what it was in the UK (and that's before the interest rate was slashed post GFC). Not to mention cost of clothes, food, electricals, books and the fact that you have to pay out for school equipment and expensive uniforms (yes even state schools have fancy uniforms) ....

 

Make sure you've done your research before heading over here as to the level of salary you'll need to have an equivalent standard of living here.

[fleabo]

The current federal government is trying its best to return to surplus before the end of next year, or at least be able to demonstrate that it will happen soon thereafter.

 

Mining tax, carbon tax, scrapping LAFHA for TR's and the private health insurance rebate are all efforts to do so. Some will say worthwhile efforts, others not.

 

 

I totally agree. I can't believe the speed with which the Aus government here makes changes to tax incentives/breaks which have far reaching effects on ordinary people's lives. For example, the latest move of taking away the private health rebate is a real kick in the teeth to middle Australia. This government seems to want to penalise hard working, well educated people and reward laziness and underachievement. It's getting as bad as or perhaps even worse than the UK in that regard. I earns roughly the same as what I did in the UK (and work longer hours) but my mortgage repayment (for equivalent house to what I had in the UK) is 3x what it was in the UK (and that's before the interest rate was slashed post GFC). Not to mention cost of clothes, food, electricals, books and the fact that you have to pay out for school equipment and expensive uniforms (yes even state schools have fancy uniforms) ....

 

Make sure you've done your research before heading over here as to the level of salary you'll need to have an equivalent standard of living here.

[Joebloggs]

The current federal government is trying its best to return to surplus before the end of next year, or at least be able to demonstrate that it will happen soon thereafter.

 

Mining tax, carbon tax, scrapping LAFHA for TR's and the private health insurance rebate are all efforts to do so. Some will say worthwhile efforts, others not.

 

Yeah but it wont save them, 2013 if not sooner Labor are gone.

[Ken]

Yeah but it wont save them, 2013 if not sooner Labor are gone.

 

Or put it another way there's going to be a whole new round of tax changes in 2013 where all sorts of new ways to take money out of your pocket will be thought up! There may be elections but the government always gets in.