Bye bye LAFHA, no more gravy train

Ianbee123

Hmmmm I like your arguments on the tax discrimination and indeed I have already sent in a submission based on this.... However I fear that all it will do is make Mr Swann decide to make the transition rule the same for evreryone by removing it frm Aussies rather than allow it for Brits... It gives him even more for his purse and only upsets a few voters ..... So yes it is a glimmer of hope but I for one am not holding my breath!

RaoulDuke66

Ianbee123 wrote: »

Hmmmm I like your arguments on the tax discrimination and indeed I have already sent in a submission based on this.... However I fear that all it will do is make Mr Swann decide to make the transition rule the same for evreryone by removing it frm Aussies rather than allow it for Brits... It gives him even more for his purse and only upsets a few voters ..... So yes it is a glimmer of hope but I for one am not holding my breath!

He CAN'T apply it to Australians in the same way, as it'll make many Australian families face financial ruin overnight. He thinks he can get away with it with UK nationals because Australians won't care and we won't challenge him legally. BOY, is he wrong!

Also, re a previous post, there are about 40 tax treaties - they're listed in the Schedule to the 1953 act if anyone wants to check their own country's.

Ianbee123

RaoulDuke66 wrote: »

Ianbee123 wrote: »

Hmmmm I like your arguments on the tax discrimination and indeed I have already sent in a submission based on this.... However I fear that all it will do is make Mr Swann decide to make the transition rule the same for evreryone by removing it frm Aussies rather than allow it for Brits... It gives him even more for his purse and only upsets a few voters ..... So yes it is a glimmer of hope but I for one am not holding my breath!

He CAN'T apply it to Australians in the same way, as it'll make many Australian families face financial ruin overnight. He thinks he can get away with it with UK nationals because Australians won't care and we won't challenge him legally. BOY, is he wrong!

Also, re a previous post, there are about 40 tax treaties - they're listed in the Schedule to the 1953 act if anyone wants to check their own country's.

Mate I hope you are right as I say I have used this argument and the tax treaty examples in my submission too... I guess if they ignore them then it's off to court we go.... Which is exactly how LAFHA rules were changed in the first place.... De ja vie or what!!

RaoulDuke66

Ianbee123 wrote: »

Mate I hope you are right as I say I have used this argument and the tax treaty examples in my submission too... I guess if they ignore them then it's off to court we go.... Which is exactly how LAFHA rules were changed in the first place.... De ja vie or what!!

I'm telling you, there's no way it'll get through in the current form. The Treasury's internal or external lawyers have probably advised of this already but Swann wants to give it a go to try to save his terminal political career and maybe do some social engineering into the bargain. Even in the event that it did get through, the ATO and your employer can't administer your income tax in way which breaches Australian tax law (the 1953 Act and the Convention). Further, as UK citizens, we can each and all appeal to the Competant Authority, and if that doesn't sort it out then the Convention says it has to be dealt with at inter-Governmental level. Swann has dropped a clanger with this - he's tried to pick on a small demographic without a vote, forgetting it's also the smartest and most capable demographic in the country.

Legend100

LAFHA is an FBT benefit (currently) so it does not fall within the remit of the rest of the other tax treaties (other than the UK and New Zealand which were amended in 03 to cover FBT). The non-discriminatory clause of treaties refers to "any tax" but these are taxes on income, FBT is not an income tax for the purpose of treaties per the ATO.

However, given that they are amending the FBT legislation to bring LAFHA taxable under the Income tax acts from July, there may be scope to claim on the non discriminatory clause of each countries DTA. Us Irish may have hope yet but im not holding my breath

troels

RaoulDuke66 wrote: »

I Further, as UK citizens, we can each and all appeal to the Competant Authority, and if that doesn't sort it out then the

Do you know the proper procedure to appeal? I'm assuming its via the Competent Authority initially? I emailed them and they simply replied pointing me to the web site to provide feedback on the proposal. I replied again saying I don't want to provide feedback; I want to appeal under the terms of Article 26 of the UK/Australia Double Taxation Convention.

They haven't replied to this one yet.

Is this the correct route?

RaoulDuke66

troels wrote: »

Do you know the proper procedure to appeal? I'm assuming its via the Competent Authority initially? I emailed them and they simply replied pointing me to the web site to provide feedback on the proposal. I replied again saying I don't want to provide feedback; I want to appeal under the terms of Article 26 of the UK/Australia Double Taxation Convention.

They haven't replied to this one yet.

Is this the correct route?

Well done - don't let them off the hook that easily! I understand that the Competant Authority provides an arbitration mechanism/forum (normally used in relation to corporate tax disputes), which can be utilised in addition to the normal avenues of litigation. Please let me know what the reply is.

ms_piggy2810

The 32.5% applies to non-residents. Ie non-residents for tax purposes. Most foreign workers are classed as residents for tax purposes. Get your facts right!

RaoulDuke66

ms_piggy2810 wrote: »

The 32.5% applies to non-residents. Ie non-residents for tax purposes. Most foreign workers are classed as residents for tax purposes. Get your facts right!

No-one on this thread is talking about the 32.5% tax rate for non-residents, as we are residents for tax purposes. We're talking specifically about the LAFHA transitional arrangements. Perhaps you could contribute something on that.

ms_piggy2810

mandrake04 wrote: »

http://www.heraldsun.com.au/money/federal-budget-2012-what-it-means-for-you/story-fn84gmep-1226350235644
http://www.news.com.au/money/federal-budget/federal-budget-2012-what-it-means-for-you/story-fn84fgcm-1226350235644
http://www.dailytelegraph.com.au/money/federal-budget-2012-what-it-means-for-you/story-fn84gkmz-1226350235644[/QUOTE]

People on here have been implying that 457 visa holders will be taxed 32.5%. As you say, being a non-resident for tax purposes has nothing to do with whether or not you are on a 457 visa. Therefore I don't understand why it has even been mentioned?

RaoulDuke66

ms_piggy2810 wrote: »

mandrake04 wrote: »

http://www.heraldsun.com.au/money/federal-budget-2012-what-it-means-for-you/story-fn84gmep-1226350235644
http://www.news.com.au/money/federal-budget/federal-budget-2012-what-it-means-for-you/story-fn84fgcm-1226350235644
http://www.dailytelegraph.com.au/money/federal-budget-2012-what-it-means-for-you/story-fn84gkmz-1226350235644[/QUOTE]

People on here have been implying that 457 visa holders will be taxed 32.5%. As you say, being a non-resident for tax purposes has nothing to do with whether or not you are on a 457 visa. Therefore I don't understand why it has even been mentioned?

Yes, well we'll have to put them to bed with a cold towel and some nice blue pills. Although, perhaps they're being unwittingly prophetic. All foreign workers probably need to have an Australian exit plan in mind, as it seems only to be a matter of time before the Australian government becomes as excitable about nasty horrible outsiders as the German government of the 1930s.

mandrake04

ms_piggy2810 wrote: »

mandrake04 wrote: »

http://www.heraldsun.com.au/money/federal-budget-2012-what-it-means-for-you/story-fn84gmep-1226350235644
http://www.news.com.au/money/federal-budget/federal-budget-2012-what-it-means-for-you/story-fn84fgcm-1226350235644
http://www.dailytelegraph.com.au/money/federal-budget-2012-what-it-means-for-you/story-fn84gkmz-1226350235644

]


People on here have been implying that 457 visa holders will be taxed 32.5%. As you say, being a non-resident for tax purposes has nothing to do with whether or not you are on a 457 visa. Therefore I don't understand why it has even been mentioned?

First of all those were direct quotes from those 3 web sites

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.

Read more: http://www.news.com.au/money/federal-budget/federal-budget-2012-what-it-means-for-you/story-fn84fgcm-1226350235644#ixzz1veLdH5Tp

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.

Read more: http://www.news.com.au/money/federal-budget/federal-budget-2012-what-it-means-for-you/story-fn84fgcm-1226350235644#ixzz1veLlKmGv

In Regards to LAFHA which is the topic of this tread.

I cant see where anyone was implying that Temporary residents were non-residents for Tax reasons. Mellor and myself cleared this up in the following posts.

http://www.boards.ie/vbulletin/showpost.php?p=78564421&postcount=62
http://www.boards.ie/vbulletin/showpost.php?p=78564652&postcount=63


My Suggestion ms_piggy2810 is to take a dose of your own advice.... Get your facts right.

ms_piggy2810

So why mention the 32.5% tax rate if this thread is only about LAFHA? The 32.5% tax rate has nothing to do with LAFHA. That is why I feel you were implying that all 457 visa holders would be taxed at 32.5%. Otherwise there would be no need to mention it in the first place.

mandrake04

ms_piggy2810 wrote: »

So why mention the 32.5% tax rate if this thread is only about LAFHA? The 32.5% tax rate has nothing to do with LAFHA. That is why I feel you were implying that all 457 visa holders would be taxed at 32.5%. Otherwise there would be no need to mention it in the first place.

Because I quoted a paragraph from a website, I didn't feel it necessary to butcher the paragraph because I might be hurting someones feelings.

2 weeks in an the only one with any beef over it is you, says it all really.

Nick Diamond

Can we get rid of Ms_Piggy, i thought there was an update on LAFHA and all i've found is some fool trolling...

dave3004

I love the way my entire faith of retaining the LAFHA rests on a couple of intellectual boardies who are submitting complaints to the govt.

COYB !!!

RaoulDuke66

Well, can everyone please stop re-typing and quoting THAT percentage, as it's polluting the topic of the thread. The thread is about Wayne Swann's offensive and disingenuous characterisation of foreign workers, the illegal transitional tax changes he's proposing which breach Article 25.1 of the 2003 UK/Australia Convention and the International Tax Agreements Act 1953, the fact that he's been found out trying to hide it, and the fact that he isn't going to get away with it. Now that we're all agreed (Ms Piggy), I would be interested to hear any material updates on the key issues. After writing a detailed e-mail to our HR department on the Article 25.1 breach, they came back to me to say that they were passing the information to the company accountants to consider the point in their consultation response. As I've said before, I already contacted direct those from the big accountancy firms who authored post-budget reports. I've had a number of responses saying that this aspect of the draft legislation will be considered in authoring consultation responses. I expect a number of tax lawyers will also pick this up. Once the professional services firms deal with this in their responses and commentaries, the game's up for Swann. And far from feeling self-congratulatory, I'll thank god that the families of 457 visa holders won't be subject to overnight financial ruin. Shame on Wayne Swann.

Traq

Could somebody point out to me how the transitional agreements apply only to Australians and that the law is being discriminatory.

From my understanding of it, all that is changing is that as of 1st July 2012 your primary place of residence, which you have to be away from in order to claim the LAFHA, is being changed to specifically be in Australia only. As such, it doesn't matter if you're a temporary resident, a permanent resident, or a citizen, all that matters is that matters now is that your usual place of residence is in Australia.

If you're a temporary resident who is claiming the LAFHA based on having to live away from an Australian property, and this arrangement was in place prior to May 7th, then you will continue claiming the LAFHA for the next two years. If however, you are claiming for a place of residence elsewhere then as of July 1st you no longer qualify for the LAFHA as your usual place of residence must now be in Australia.

In this instance I don't see how the law can be seen as discriminatory when it is essentially just levelling the playing field for all, regardless of residency status.

NB: I'm not trying to start a row here, just trying to figure out how it can be viewed as discriminatory. I have never claimed it and am not entitled to it now so it doesn't affect me either way.

kdevitt

Its discriminatory because -

If you are an Australian resident, you do not need to have a primary place of residence in Australia to have the transitional period apply.

If you are not Australian, you do require a primary place of residence in Australia or else you can not avail of the transitional period.

Have been reading some of the submissions to treasury from KMPG, Deloitte etc, and they've also picked up on the discriminatory aspects and potential breach of international tax treaties as well.

Ianbee123

Well said Raoul lets keep this on track...we are talking about LAFHA and the discriminatory transition arrangements on this thread...nothing else...eys on the prize people!!..also is there any chance that you can post a copy of the email you sent to your HR dept? (minus any personal details of course)..if it is anything like the excellently worded submission document you posted, it could well be a template to form the basis of what we all should be submitting to our HR departments.
I also have to say I applaud your optimiism that this will be thrown out....do you really have that much faith in the Australian legislative process??... I wish I did...I understand and agree with all the arguments and also agree that these will have been put infront of the government lawyers etc....but I still fear they will "publish and be dammed" and it will become then a legal challenge afterwards (Lawyers in the house please step forward !!)... The senate ,who should police these sort of matters are saying that "there is little noise around concerning the removal of LAFHA" and they do not even mention the transitionary period debate...as far as they are concerned it dosn't exist..and they still have not published anything regarding consultations etc from the November statement............. I fear then "help" maybe too late for the families on 457 visa's you mention...I hope to god though that you are right...however in preperation a template to use with an employer pointing out the legalities(or illeagalities) of deducting an illegal tax may come in very handy indeed and the more that submit the more noise it will create and the more company submissions will be put in against this abomination.

Nick Diamond

Ianbee123 wrote: »

Well said Raoul lets keep this on track...we are talking about LAFHA and the discriminatory transition arrangements on this thread...nothing else...eys on the prize people!!..also is there any chance that you can post a copy of the email you sent to your HR dept? (minus any personal details of course)..if it is anything like the excellently worded submission document you posted, it could well be a template to form the basis of what we all should be submitting to our HR departments.
I also have to say I applaud your optimiism that this will be thrown out....do you really have that much faith in the Australian legislative process??... I wish I did...I understand and agree with all the arguments and also agree that these will have been put infront of the government lawyers etc....but I still fear they will "publish and be dammed" and it will become then a legal challenge afterwards (Lawyers in the house please step forward !!)... The senate ,who should police these sort of matters are saying that "there is little noise around concerning the removal of LAFHA" and they do not even mention the transitionary period debate...as far as they are concerned it dosn't exist..and they still have not published anything regarding consultations etc from the November statement............. I fear then "help" maybe too late for the families on 457 visa's you mention...I hope to god though that you are right...however in preperation a template to use with an employer pointing out the legalities(or illeagalities) of deducting an illegal tax may come in very handy indeed and the more that submit the more noise it will create and the more company submissions will be put in against this abomination.

I second this request for the template... I'll defo be onto my tax and HR departments and i'll forward it to those expats in my place of work

Ianbee123

For anyone who is intersted I have now had a response from Raylee O'Neill at the ATO for information regarding submissions and consultaions that have taken place from the MYEFO annoucement in relation to LAFHA that was made on Nov 28th last year. The link to see the submissions is here:-http://www.treasury.gov.au/ConsultationsandReviews/Submissions/2012/Fringe-Benefits-Tax-FBT-Reform-living-away-from-home-benefits/Submissions
There are some very large organisations that have advised the government not to touch LAFHA at all. Although this is not directly related to the discrimination issue on ntransition arrangements it should give a good idea of what type of submissions are going in now and who they will be from... happy reading !!

RaoulDuke66

Nick Diamond wrote: »

I second this request for the template... I'll defo be onto my tax and HR departments and i'll forward it to those expats in my place of work

I have drafted something which I hope will be helpful to everyone, if you could please forward to others affected and perhaps also post on other relvant forums and social media sites. Feel free to adapt as suits you.

Dear [#],

I refer to the upcoming changes to the treatment of Living Away from Allowance (LAFHA) outlined by the Treasurer in the recent Budget. These changes are set to commence on 1 July 2012, subject to a transitional period to 1 July 2014 for existing LAFHA arrangements.

However, despite the apparent statement to the contrary in Budget Paper 2, the Treasury has now made it clear that its intention is to deliberately exclude foreign workers from this transitional period. As has been well publicised in the relevant press, this threatens to impose significant additional costs on businesses if they wish to retain their existing skilled overseas staff.

The discriminatory intention behind the transitional arrangements is reflected in the exposure draft legislation Tax Laws Amendments (2012 Measures No.3) Bill 2012: deducting expenses for living away from home. Under the transitional proposals, temporary residents and foreign residents will be subject to an additional restriction to which permanent residents will not be subject – namely the requirement to maintain a dwelling in Australia.

You may have already considered that this differential treatment of Australians and non-Australians gives rise to a number of legal issues, both for individual employers and the Treasury. However, the key issue (at this stage) is that the legislation in this form would breach the non-discrimination provisions in Australia's double-taxation treaties (incorporated into Australian domestic law through the International Tax Agreements Act 1953).

Taking the UK as an example, Article 25.1 of the UK/Australia Double Taxation Convention, applicable to both income tax and fringe benefits tax, states:

Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected.

The Government's proposals on transitional arrangements contravene Article 25.1 because they would be subjecting UK nationals to a requirement connected with income tax/FBT which is other and more burdensome than requirements to which Australian nationals are subject in the same circumstances, "in particular with respect to residence".

Given the financial and legal issues raised by the discrimination between Australians and non-Australians, I should be grateful if you would ensure that any consultation response made by the company (or by its legal or tax advisers) to the exposure draft legislation, outlines as a matter of priority, the breach of the above non-discrimination requirements to which the Australian government is subject.

Per the link below, I understand that such submissions require to be made by Tuesday 29 May 2012.
http://www.treasury.gov.au/ConsultationsandReviews/Submissions/2012/Fringe-Benefits-Tax-FBT-Reform-living-away-from-home-benefits

Please let me know if I can provide further information on this.

Kind regards,

[#]

Ianbee123

I have pasted this comment from another site...psosted by Paul Suddaby
I actually think he may be right and deffinately would back up waht you are thinking Raoul...there maybe some light at the end of the tunnel !!............

"I'm becoming more and more convinced that the government needed to showcase these reforms just to deliver their budget surplus - they are part of the $1.5bn "wafer thin" figure. They need every cent for that - once the budget dust settles I think this will disappear.

They'll pull the reforms. Then they'll blame foreigners and lawyers for stopping them from closing a loophole - it's win-win. Deliver a budget surplus: check. Fight for average Joe Australia: check. Come out of this with foreign workforce intact, businesses happy, and head held high having appeared to have walked away from the fight that nobody knows you actually started: check.

Now these submissions have been made public......... amec even predict REDUNDANCIES among AUSTRALIAN workers....... How can any human being possibly argue for these reforms to be pushed through?

I think Treasury are playing a game involving numbers smoke and mirrors, and we're all finally having to learn about politics because we simply have to.

They've tried to get rid of LAFHA before in the 90's. Didn't happen. So the budget is coming, Swanny has promised a surplus - Treasury are told to dust off any old schemes that had the potential to raise revenue but weren't implemented. It's all to 'inflate' the surplus figure.

Didn't they predict a $22bn DEFICIT last year that became $44bn? Now do you see why this surplus is called wafer thin?

This is why they couldn't release the submissions BEFORE the budget, it would be childsplay for the opposition to knock $250m off the surplus figure straight away by quoting the consequences within the MYEFO submissions. Typical Abbot quote would've been "the Treasury are buying revenue with Australian redundancies...." and we can't have that eh Swanny? Also, given all the political damage being done to the ALP, not delivering a surplus would've been tantamount to a suicide pill. "We've delivered a surplus while the rest of the world is FUBAR" is the Govt's get outta jail card, and will be for some time.

I actually think the Treasury is gearing up to NOT reform LAFHA but blame someone else when it doesn't happen: even though they knew it would never happen anyway.

"At present, any deviation from this crazy reform (amending the transitions etc) will ALSO amend the surplus figure. They won't do that, because that WOULD be news. [/I]

I have to say it makes allot of sense in the crazy world of politics it's just the sort of deviant play they would make just to try to get votes !!

karl bracken

Im all for LAFHA and the GF gets it but i dont get the moaning about loosing it.
We all know its basically a loop hole, if we were home working and say a Polish guy was getting 1000 more per month because he choose to live in Ireland and was doing the same job as us and paying the same rent, same food prices etc etc would that be fair? Playing devils advocate and all....

I do hope temporary residents keep it as its worth a lot to us all but at the end of the day the government can get 5 minutes in parliament amend the tax act and the double tax standards is gone (which i hope dosent happen)

Ianbee123

karl bracken wrote: »

Im all for LAFHA and the GF gets it but I dont get the moaning about loosing it.
We all know its basically a loop hole, if we were home working and say a Polish guy was getting 1000 more per month because he choose to live in Ireland and was doing the same job as us and paying the same rent, same food prices etc etc would that be fair? Playing devils advocate and all....

I do hope temporary residents keep it as its worth a lot to us all but at the end of the day the government can get 5 minutes in parliament amend the tax act and the double tax standards is gone (which i hope dosent happen)

Hi karl,
I have a couple of things in response that you may not quite get as far as temporary residents are concerned. I get what you are saying and indeed I have used the annalogy about the "Polish" worker back home (in the UK) myself...but their are some subtle differences. In the UK a "Polish" worker (or an Australian for that matter) gets all the same benefits that a UK worker would (i.e. free access to education (upto secondary level) , free access to health care with no "gap" on the national health system and free child care upto a certain number of hours per week)...in Australia the benefits that Australians get are NOT afforded to temporaray residents ( i.e. you have to pay for schooling upto $4000 per term, you do not get access to free or subsidised child care ($80-100 per child per day) and to get "no gap" health cover costs around $350 per month)...IF when they were scrapping LAFHA they ammended these annomolies at the same time and UK temporary residents got the same here as Australians would get in the UK, I think your argument stands but they are not looking at doing that and instead stating that employers need to pick up these costs by paying temporary foreign workers a premium to cover this...so a foreign worker doing the same job would get more pay than an Australian !....how fair is that on Australian workers???
The main "moan" though is the manner in which this is being done...basically citizens and permanent residents who are claiminh LAFHA ( who get the free education etc already) are being given two years in which to make any neccessary adjustments to their life style (i.e until July 1st 2014...temporary residents are being given 8 weeks ( i.e. from the announcement in the budget until 1st July 2012)...this is the part which is unfair, discriminatory and breaks the reciprocal tax treaty which is in place between the UK and Australia which says that temporary residents in either country should not be treat any different from the permenant residents and citizens as far as tax is concerned. Remember temporary residents on 457 visa's here are treat the same as permanent residents when it comes to paying tax...the Australian government cannot have its "cake and eat it"...hopefully now you and any Australian who reads this will understand the "moaning"....It appears that many Australian companies understand this as well hence why the biggest Australian companies are advising that getting rid of LAFHA will be a serious problem for the Australian economy and long term Australian jobs and it should not be interfered with.
Also what gets me is to get LAFHA you have to be spending it..it's not like it gioes into some big pot being saved up as some sort of golden handshake...all the allowance given goes straight back into the economy on rent and food etc...so it's not like a benefit payment that you get regardless...and a final point....on a sponsored 457 visa IF for some reason you do not get any earnings for 4 weeks you can be made to leave Australia...my argument is then that you must keep a home somewhere else...you may need to go back to it at pretty short notice...perhaps if they ammend LAFHA they need to look at this clause on the 457 visa also...there you go I'll put my soap box away now !!!

karl bracken

Im fully aware of the differences between temporary and perment status.
Being on a 457 and having our first baby due next week and we are not entitle to 50% childcare rebate and childcare is closer to 90 - 130 a day the norm being 110 in Sydney
Not entitled to the A or B tax break for working parents and not entitled to paid maternity or the baby bonus.

I was not aware that living on Ireland or England gave you the same rights as a citizen, which is a bit mad anyways but thats another story.

My point is we all know that the LAFHA is a bonus its great and all but unless you emigrated from another country to here and were promised LAFHA with your wages, we really are just getting money for nothing.

This is a loop hole and i hope we dont loose it but the title of this thread, LAFHA no more gravy train sums it up we all know its free money.

ellaq

If the government treated everyone on temporary visas the same as people with PR where is the incentive to fully commit to the country. We could all happily live here forever on temporary visa whilst claiming LAFHA and paying the same rate of tax as everyone else. We have PR and we do not receive any family tax or childcare rebates but that is because the system for family tax is means tested here. We also pay for our children to attend school but that is our choice. We also maintain our home in Ireland that is classed as an investment.

I still think that if you are earning the same rate and paying the same tax then you should not be getting any extra benefit. I think the discrimination is making people pay for their children's public school education.

RaoulDuke66

karl bracken wrote: »

Im all for LAFHA and the GF gets it but i dont get the moaning about loosing it.
We all know its basically a loop hole, if we were home working and say a Polish guy was getting 1000 more per month because he choose to live in Ireland and was doing the same job as us and paying the same rent, same food prices etc etc would that be fair? Playing devils advocate and all....

Sorry, I didn't have an intimate knowledge of Australian tax law before I signed my contract in October and moved to the other side of the World - I just went by the ATO's guidance which entitled me to LAFHA. Not sure too many others were Australian tax experts either.

Ianbee123

OK Guys...lets remember LAFHA is NOT just for people on temporaray visa's. it also applies to Australian citzens and people on PR. Currently as of today if you maintain a home in one location (inside or outside of Australia) but are temporarily working in another location in Australia for upto 4 years you can legitimately claim LAFHA...so it is available for people who do get all the benefits afforded to them under Australian tax system as well as those of us who don't.. So at the momment you can have two Australian citizens working next to each other doing exactly the same job being paid exactly the same pay and one will take home the tax free element of LAFHA and the other won't...and there are many Australians currently doing this especially in the mining,gas and mineral industries. I personally know at least half a dozen.... So it is NOT a loop hole for foreign temporary workers....It is NOT a perk for foreign workers.....it is a legitimate tax free allowance to allow anyone who is temporarily working away from home (whether that home is in Australia or not) extra money to pay for the extra costs involved in working in one place and still having to keep a home somewhere else as you are only away from it temporarily on a temporary contract.....We can debate whether it is a "perk" or not all day long...for me IF it is a perk it is only a perk to the people who get all the benefits paid under the Australian tax system AND get LAFHA as well...which isn't anyone who is here on a 457 visa but is many who have PR or citizenship. Personally I would give up LAFHA tomorrow in place of PR if I intended to stay here permanently as there are many many other reasons to have PR (like they can't throw you out of the country if you cannot work for 4 weeks for example !!)....
.....BUT whether you consider LAFHA a perk or not the fact is under the announcement in the Budget people with PR or Citizenship will still be able to get LAFHA for the next two years if they are already getting it now (whether the home they are "living away from" is in Australia or not... but temporary residents will lose it on July 1st this year...why should that be??...what do "temporary workers" who are permanent residents or Citizens, with ahome in one place and working in another have to pay out differently than a tempoarary resident who is doing the same thing?? ....we pay the same tax, same rent, more school fees, more childcare fees but we don't get any compensation for it either.... apart from LAFHA ..it cannot be right to take it from us and not from everyone else at the same time..... and fortunately most of the biggest companies in Australia who are trying to compete with Asia to attract talent into this country agree...pull LAFHA and you will affect the economy so much that it will not just cost temporary residents their jobs it will cost Australians their jobs too !!... and that is the gripe... we have been portraid as high earning executives who are rorting (cheating) the system...and it appears that some people have been swayed to think that this is the case...it is absolute and utter rubbish and a complete fabbication to make these comments....for sure ammend LAFHA, cap it, make it a fixed payment, cap the salaries at which you can get it, make it that you have to prove that you have a property back in UK or Ireland etc rather than just having to give an address...but do not get rid of it altogether...unless you are replacing it with somthing else which will keep Australia competative.