LAFHA - Some advice needed...

[AoifesMum]

Hello all,

 

Just hoping someone can offer some advice regarding the Living Away From Home Allowance? We've heard that it is to be stopped from July 1st 2012. I've read some discussions on here about this but they haven't really related to our particular circumstances. I really don't want to sound like I'm moaning about this but I honestly can't believe the government can introduce this measure when people have based their decision to emigrate on receiving the LAFHA. We are a family of 4 on a work sponsored 457 visa (my partner is a civil engineer). We've been over since June, love the country, daughter settled in school etc. When my partner was offered the job we worked out our finances, budget etc and decided to go for it, thinking what a fab experience it would be for us all. We were not told that the LAFHA was under threat. On arriving here we found that the cost of living was way higher than anticipated, so I now work from home (15 hours per week) to make ends meet. It is not financially viable for me to work full time as we would need to pay for child care for our one year old and before/after school for our 6 year old (child care per day is $100 plus $25 per day for my daughter, minimum and we're not entitled to any help). I worked in the UK but had lots of family and grandparents to help, none of which I have here.

 

My partner has been talking to his works about this, as it affects a number of employees there, but they've not really been very helpful. If we loose the LAFHA we will not be able to afford to live here. But we've given up jobs in the UK to come over and, with the economy the way it is over there I doubt we'll get anything there.

 

Does anyone know the current situation with this? I just can't believe that this can be morally right. I know I am speaking from a very personal perspective and there must be reasons why this is being abolished - but how can you offer a job to someone which entails them uprooting their whole family, then simply say 'well, the goal posts have changed, sorry'? If we didn't have the baby I could work and, yes we would be a bit peeved but we'd manage, but we really are trapped as we have no capacity to make additonal income. I am really concerned about what we'll do and really angry that nobody seems to be assisting us at all! Thank God for this site as I've found out all I know about this from PIO.

 

So, does anyone at all have any ideas? They would be sooo welcome. Also, I really don't want this thread to turn into a 'merits of scrapping the LAFHA' and a general slagging off of people who claim it. I really don't care about the rights and wrongs of the policy, just how we can salvage something from this mess. We never came over to Australia to make a pile of money, we are worse off here actually, even with the LAFHA, but I really would rather avoid having to go home to unemployment and house repossession! Apologies that this post has turned into a bit of a negative rant!

 

Helen

[NickyNook]

The people you should be talking to are your husband's employers. If the job was sold to you with the premise that you would receive a certain amount including LAFHA, then you need to negotiate a pay increase to make up the difference.

 

If employers want to bring people in from overseas, they should pay them sufficiently - the taxpayer should certainly not be subsidising employers in this way.

[wakeboard1980]

The people you should be talking to are your husband's employers. If the job was sold to you with the premise that you would receive a certain amount including LAFHA, then you need to negotiate a pay increase to make up the difference.

 

If employers want to bring people in from overseas, they should pay them sufficiently - the taxpayer should certainly not be subsidising employers in this way.

 

 

Agree, if the employer 'dangled the lafha carrot' then I would be hitting them up for the shortfall. If they are unwilling to help you out then I would suggest that your OH look for another higher paying job.

[frostie]

Hello all,

 

Just hoping someone can offer some advice regarding the Living Away From Home Allowance? We've heard that it is to be stopped from July 1st 2012. I've read some discussions on here about this but they haven't really related to our particular circumstances. I really don't want to sound like I'm moaning about this but I honestly can't believe the government can introduce this measure when people have based their decision to emigrate on receiving the LAFHA. We are a family of 4 on a work sponsored 457 visa (my partner is a civil engineer). We've been over since June, love the country, daughter settled in school etc. When my partner was offered the job we worked out our finances, budget etc and decided to go for it, thinking what a fab experience it would be for us all. We were not told that the LAFHA was under threat. On arriving here we found that the cost of living was way higher than anticipated, so I now work from home (15 hours per week) to make ends meet. It is not financially viable for me to work full time as we would need to pay for child care for our one year old and before/after school for our 6 year old (child care per day is $100 plus $25 per day for my daughter, minimum and we're not entitled to any help). I worked in the UK but had lots of family and grandparents to help, none of which I have here.

 

My partner has been talking to his works about this, as it affects a number of employees there, but they've not really been very helpful. If we loose the LAFHA we will not be able to afford to live here. But we've given up jobs in the UK to come over and, with the economy the way it is over there I doubt we'll get anything there.

 

Does anyone know the current situation with this? I just can't believe that this can be morally right. I know I am speaking from a very personal perspective and there must be reasons why this is being abolished - but how can you offer a job to someone which entails them uprooting their whole family, then simply say 'well, the goal posts have changed, sorry'? If we didn't have the baby I could work and, yes we would be a bit peeved but we'd manage, but we really are trapped as we have no capacity to make additonal income. I am really concerned about what we'll do and really angry that nobody seems to be assisting us at all! Thank God for this site as I've found out all I know about this from PIO.

 

So, does anyone at all have any ideas? They would be sooo welcome. Also, I really don't want this thread to turn into a 'merits of scrapping the LAFHA' and a general slagging off of people who claim it. I really don't care about the rights and wrongs of the policy, just how we can salvage something from this mess. We never came over to Australia to make a pile of money, we are worse off here actually, even with the LAFHA, but I really would rather avoid having to go home to unemployment and house repossession! Apologies that this post has turned into a bit of a negative rant!

 

Helen

 

 

Hi Helen, We are not in Oz yet we will be leaving in 6 weeks. We were offered the job with th LAFHA and accepted the job based on that amount. Now it has been scrapped we approached our employer who have offered to sponsor us for Pr once we arrive and have given us a pay rise.

We are able to apply for pr as we already have a skills assesment and husbands job is on the ENSOL.

Having Pr in NSW with 3 kids will leave us better off than being on a 457 visa with LAFHA. Is this something you could ask or get your employer to do for you?

Mandy

[AoifesMum]

Hi Helen, We are not in Oz yet we will be leaving in 6 weeks. We were offered the job with th LAFHA and accepted the job based on that amount. Now it has been scrapped we approached our employer who have offered to sponsor us for Pr once we arrive and have given us a pay rise.

We are able to apply for pr as we already have a skills assesment and husbands job is on the ENSOL.

Having Pr in NSW with 3 kids will leave us better off than being on a 457 visa with LAFHA. Is this something you could ask or get your employer to do for you?

Mandy

 

Thanks Mandy, that's a really good idea and one a friend of ours suggested. I'm not sure if we have to have been living here for two years though? I'll check it out. It sounds like a better option as I would then be entitled to some help with child care so could get some part time work.

 

Thanks again!

 

Helen

[GilraenH]

Thanks Mandy, that's a really good idea and one a friend of ours suggested. I'm not sure if we have to have been living here for two years though? I'll check it out. It sounds like a better option as I would then be entitled to some help with child care so could get some part time work.

 

Thanks again!

 

Helen

 

You don't have to be working for 2 years to be able to apply for PR (even with sponsorship), some employers require that before they will sponsor you others will do it right away.

[AoifesMum]

Thanks! I think that may be the way to go then. How much does it cost? Also, we're not married - but have lived together for 15 years, will that make a difference? Thanks again for the advice.

[GilraenH]

It depends on the visa and whether you are going for independent visas or sponsorship visas. I think the term in Oz is de facto partner regardless of marital status. You just need to evidence it, is my understanding.

 

http://www.immi.gov.au/allforms/990i/990i-charges.htm

[AoifesMum]

Thank you! Yes, that's what we did for the 457 thinking about it. Much appreciated.

[GilraenH]

Good luck!

[VERYSTORMY]

It is not been stopped on the 1st July. It is being phased out from then. The phase out will go over at least 2 years.

 

You do need to remember though that you have not emigrated. You are here on a temporary basis. If you gain PR that is different, but until then always assume you will be goin back. I know people that were in VERY high demand jobs in 2008 and in the panic as the gfc hit were laid off and couldnt get another and had to leave.

[AoifesMum]

It is not been stopped on the 1st July. It is being phased out from then. The phase out will go over at least 2 years.

 

You do need to remember though that you have not emigrated. You are here on a temporary basis. If you gain PR that is different, but until then always assume you will be goin back. I know people that were in VERY high demand jobs in 2008 and in the panic as the gfc hit were laid off and couldnt get another and had to leave.

 

 

Yes, you're right and I will keep that in mind. Thanks for the correction re the July 1st too, I didn't realise that - just don't seem to be able to get any info on it (unless I'm being pretty dim!) Cheers for the above.

[millers]

Hi Helen- i can really relate to what your saying about the LAFHA as my husband and i were ready to fly out to OZ ( 457 visa) and about 2 weeks before i noticed something on here about LAFHA being phased out from July 1st so i contacted my husbands employers here in OZ and told them our concerns and they said IF it was to happen they would pay him more money ( so a salary increase) as the LAFHA was written in to he's contract.....and we do have it in writing from them to back it up.....i sure as hell wasnt going to leave the UK and then try and sort it out after we got here as i know they would probably not be as helpful.....as they have spent thousands of dollars getting us here.....so it was good for us to negotiate whilst we were still in the UK !!! Good luck with it all Helen

[VERYSTORMY]

There isnt much information yet as the legislation has not gone through. Though it is expected to in the next month or two. There is a goverment paper, giving details except for the legnth of time the phase out will run

[Ian Lindgren]

I think the federal government has been very short sighted on this and will not only be hurting foreign citizens, who we badly need in our country due to the skills shortage, but also Australians because contrary to what the government is saying, most Australians who receive LAFHA will also lose it on 1 July.

 

The current legislation versus the proposed changes and real time facts on the changes can be found at the LAFHA Blog.

 

Regards,

 

Ian

[VERYSTORMY]

I think the federal government has been very short sighted on this and will not only be hurting foreign citizens, who we badly need in our country due to the skills shortage, but also Australians because contrary to what the government is saying, most Australians who receive LAFHA will also lose it on 1 July.

 

The current legislation versus the proposed changes and real time facts on the changes can be found at the LAFHA Blog.

 

Regards,

 

Ian

 

Sorry, but i disagree. Firstly, the sceme always assumed that it was to help people that were comming to Oz for a short term stay and were having to maintain a household back in their home country. But as we see on these boards every day, the vast majority of people are regarding it, rightly or wrongly, as a permanent move. Secondly, and more importantly, why should the tax payer fund a company. It is for the company to pay its staff the appropriate wage.

[Ian Lindgren]

Sorry, but i disagree. Firstly, the sceme always assumed that it was to help people that were comming to Oz for a short term stay and were having to maintain a household back in their home country. But as we see on these boards every day, the vast majority of people are regarding it, rightly or wrongly, as a permanent move. Secondly, and more importantly, why should the tax payer fund a company. It is for the company to pay its staff the appropriate wage.

Hi,

 

I think that it’s very important to realise that the readers of these forums actually take everyone’s posts as advice; in fact they often take them as fact and make life decisions based on them. You have posted two very incorrect and misleading posts on PomzinOz and Perth Poms at:

http://www.pomsinoz.com/forum/news-chat-dilemmas/142388-lafha-some-advice-needed-2.html#post1360141

http://www.perthpoms.com/forum/migration-issues/6003-oh-offered-457-bunbury-what-do-4.html#post31377

 

You should not be defensive when you make an error; rather you should correct it.

 

Let’s dissect the situation so readers can read fact and make fact based decisions and I’ll post the same information on both forums.

 

You have made the statement about LAFHA that “The scheme always assumed that it was to help people that were coming to Oz for a short term stay and were having to maintain a household back in their home country.” This is incorrect and I’ll cite the former section 51A of the Income Tax Assessment Act 1936 (ITAA 1936) where in 1945 it was amended to state that the amount of any LAFHA was an allowable deduction from the assessable income of an employee taxpayer.

 

The nature of a LAFHA was set out in the Explanatory Note as “Various wage-fixing authorities have granted away-from-home allowances to employees whose places of employment are located away from their usual places of abode. The allowance is paid to compensate the employee for the additional expenditure he is obliged to incur in providing board and accommodation for himself at his place of employment while, at the same time, maintaining his home elsewhere. So it is incorrect to suggest that LAFHA was introduced as a scheme to assist people that were coming to Oz for a short term stay and were having to maintain a household back in their home country.

 

So we are clear on that and can leave it behind because in 1945 through to the 1970s Australia did not have to subsidize people living in Australia. Instead they subsidized people getting to Australia when they had homes elsewhere because people were flocking here in waves and happily leaving their homes behind with the European migrations from places like Italy and Greece after WWII and 10 Pound Poms (no disrespect intended, my Wife is a 10 Pound Pom!) as part of Ben Chifley’s 1945 Populate or Perish" policy.

 

How LAFHA became to apply to foreign citizens occurred in November 1993 when the ATO issued Draft Taxation Determination TD 93/D275 to supplement MT 2030 (the primary LAFHA Guide) by providing additional guidelines in relation to how an employee’s ‘usual place of residence’ could be determined.

 

You have also made the statement that the vast majority on LAFHA are people are regarding the move to Australia as a permanent move. This is wrong. We have conducted 4,562 LAFHA Assessments in five and a half years, and of that 22.3% decided to remain in Australia and lost LAFHA and 71.5% returned home (and therefore kept LAFHA while in Australia) and 6.2% went to other countries after their visa expired.

 

You have also said that LAFHA will end on 1 July and when I indicated that this is incorrect you stated “Ok, technically, it hasn’t become law yet. But it is almost certainly going to be law by July 1st." I recommend doing a Google search for the Treasury Consultation Paper on LAFHA dated 29 Nov 2011, and you will find that LAFHA is not going to end. Therefore you are wrong.

 

In fact so wrong that I can advise you that until recently temporary ceasing our LAFHA services until things become clearer, we had assessed 54 people in 2012 who had moved to Australia from overseas and been required to move by their employer after obtaining a home in Australia. Out of the 54 people 28 chose to leave their families at the place they are now, and move just by themselves to the new temporary location. These people will be eligible for LAFHA now and if the new laws are passed because they will maintain two properties. So you are wrong; LAFHA will not end for foreign citizens, nor Australians.

 

Now I’ve been a bit harsh here because I dislike misinformation, so I’ll slip into my advisory role.

 

LAFHA will continue past 1 July 2012; I do not agree with the changes because in my opinion the government has changed the eligibility criteria for the allowance without thought of the impact on the thousands of people it allowed to be employed in Australia on the understanding that they would receive it. See the LAFHA Blog for the current un-emotive facts.

 

I like a good debate and I respect your point of view that “The reason is simple (that LAFHA will cease). It is up to an employer to pay the staff correctly and not for the taxpayer to subsidise the employer. If the skills affected are in such short supply, then the employer will be happy to pay for them.”

 

Our Government subsidises a whole raft of issues that many people have a view that they might be worthy or nor worthy, but they are subsidised nonetheless, from new Mums with the Baby Bonus, to car manufacturing so we keep jobs, so as I say you are welcome to your view that the government should not subsidise employers.

 

As an employer myself I receive no subsidies, but I provide LAFHA advice to employers who will have great difficulty competing locally without LAFHA, such as panel beaters who cannot get panel beaters in Australia, to landscape gardeners who cannot get landscape gardeners in Australia to media consultants and of course nurses, doctors IT people and so on. These are the people whose jobs are at risk when you say that employers “should just pay them properly” when in fact we are subsidising them as a result of a skills shortage so they can help Australia and live here at a decent level of living as a result of having to perhaps maintain a home back home and one in Australia, keep furniture overseas, educate their children in Australia or overseas and for reasons such as because they don’t get free education or Medicare in the way that a permanent resident does if they are on a 457 Visa. Just as an aside….are you a permanent resident or an employer?

 

Anyway, just to finish. LAFHA will continue past 1 July, some foreign citizens already meet the proposed changes, I respect your view on subsidising foreign citizens, but do not agree with it because I think Australia should assist.

 

Regards,

 

Ian