Bye bye LAFHA, no more gravy train

Feelgood · 29-11-2011 4:42am #1

This is a bit of a disaster.....

Almost all temporary residents in Australia will lose access to the Living Away From Home Allowance (LAHFA) under plans unveiled by the Australian government today

http://www.irishecho.com.au/2011/11/29/temporary-residents-to-lose-lahfa/14058

mandrake04 · 29-11-2011 5:34am

Yeah and if you want to bring defacto's or dependants they are going to have to pay.

User-pays system under new visa pricing model
Tuesday, 29 November 2011

The Gillard Government will implement a new visa fee system to ensure taxpayers are no longer subsidising visa applications, the Minister for Immigration and Citizenship, Chris Bowen MP, announced today.

Mr Bowen said the significant changes included the introduction of a fee for dependants of visa applicants from July 2013.

'If people are bringing family members with them to Australia, the fee will reflect the additional processing and checks for these family members,' Mr Bowen said.

'These changes will bring Australia's visa application charge structures in line with comparable countries. The user-pays approach means that taxpayers will no longer need to subsidise visa applicants.'

Currently, the application fees charged to people wanting to come to Australia do not cover the cost to the Commonwealth of processing the applications. The changes are projected to generate about $613 million over the next four years in revenue.

There will be no change to humanitarian visas as part of the new application fee structure.

Student visa application fees will also decrease by 5 per cent from 1 January 2012, increasing the competitiveness of Australia's international education sector. At the same time, fees for a range of Skills and Business visas will increase by between 5 per cent and 15 per cent.

In addition, some visa programs, such as the overwhelming majority of visitor visas, will be unaffected by the move to user-pays to ensure there is no impact on tourism.

From July 2012 a CPI increase will also apply to the majority of visa application fees and a surcharge will be introduced for optional services such as visa labels.

Other changes to take effect from July 2013 will affect applications for longer-duration visas and for those seeking further visas onshore.

Mr Bowen said to encourage the use of online applications, there would also be an additional charge for people making a paper-based application where there is an 'e' visa option.

As part of the changes, improvements will be made to the Department of Immigration and Citizenship's IT network.

'We need to maintain our IT development with online applications and biometrics collection and checking,' Mr Bowen said.

'These initiatives will put Australian visa services on a sustainable financial footing, while supporting our position globally as a destination of choice to visit, live, work or study.'

hussey · 29-11-2011 5:37am

Had to happen eventually, it was money for nothing

Official page here: http://www.treasurer.gov.au/DisplayDocs.aspx?doc=pressreleases/2011/148.htm&pageID=003&min=wms&Year=&DocType=0

jank · 29-11-2011 6:35am

Lost mine a few months ago so wont affect me personally. Expect an upsurge of PR applications post July 2012 especially pre July 2013 as to avoid the extra fee.

Not sure why they are going on about Australian tax payers "subsidising" visa applications. Most temporary residents are tax payers already and are not entitled to the same services as permanent residents.
Plus its ain't exactly cheap! ENS 856 is at least $3500 and one has to wait a good few months for it to come though! Good thing my application is going in in a few weeks, this fee would have doubled the cost almost!

mandrake04 · 29-11-2011 7:06am

jank wrote: »

Expect an upsurge of PR applications post July 2012 especially pre July 2013 as to avoid the extra fee.

I read on another forum recently that because post July 2012 175 & 176 application's are by invitation only, the first round of invites is not until Jan 2013. That's 6 months of not accepting GSM PR applications (ENS 121 & 856 are not affected for EOI). They reckon that the Dept will use that 6 months as a time to clear the backlog of 30,000 outstanding applications.

danotroy · 29-11-2011 7:38am

maybe a bit silly but ive just arrived and heard about this before. working in hospitality would i be entitled to LAFHA?

hussey · 29-11-2011 7:42am

danotroy wrote: »

maybe a bit silly but ive just arrived and heard about this before. working in hospitality would i be entitled to LAFHA?

It's an employee fringe benefit, who the onus is on your employer, if WHV more than likely no, although some ppl have got it.

danotroy · 29-11-2011 7:43am

hussey wrote: »

It's an employee fringe benefit, who the onus is on your employer, if WHV more than likely no, although some ppl have got it.

so basically the employer pays me the allowance at an extra cost to themselves?

mandrake04 · 29-11-2011 7:56am

danotroy wrote: »

so basically the employer pays me the allowance at an extra cost to themselves?

No its an allowance, they reduce your salary by x and increase your your allowance by x.

Salary is taxable.
Allowance is not.

Feelgood · 29-11-2011 9:47am

With the high cost of living down here and LAFHA removed, I reckon my take home pay will be on par if not less than back home in Ireland. For some temporary visa holders, particularly those with kids I think it will be hard to justify staying here.

I was holding off on applying for PR because I didn't want to lose LAFHA, though as jank said there will be an upsurge of PR applications from July next year.

Is there much involved to go from a 457 to PR?. People keep mentioning the 457 visa as a back door to PR, how does that work?

mandrake04 · 29-11-2011 10:13am

Its a back door because some people don't qualify for PR because ie. they can't get a skills assessment (lack of qualifications and experience)

once you are on a 457 for 2 years you can apply without a skills assessment if your employer is willing to sponsor you for ENS. (with a Skills Assess you can apply at anytime as long as employer is willing to sponsor for ENS)

As regards General Skills Migration PR the work on a 457 in Australia gives a few extra brownies for

1 year = 5 points
3 Year = 10 points
5 year = 15 points
8 year = 20 points

kdevitt · 29-11-2011 11:08am

Feelgood wrote: »

With the high cost of living down here and LAFHA removed, I reckon my take home pay will be on par if not less than back home in Ireland. For some temporary visa holders, particularly those with kids I think it will be hard to justify staying here.

Ditto - think I'll start the job search back home.

Feelgood · 29-11-2011 12:25pm

mandrake04 wrote: »

Its a back door because some people don't qualify for PR because ie. they can't get a skills assessment (lack of qualifications and experience)

once you are on a 457 for 2 years you can apply without a skills assessment if your employer is willing to sponsor you for ENS. (with a Skills Assess you can apply at anytime as long as employer is willing to sponsor for ENS)

Thanks mate, a fountain of Australian kangaroo knowledge as always!

Though if my employer sponsors me for ENS without skills assessment, am I then bound to that employer for the duration of my PR?. Am I also right in saying that if your employer sponsors you, this process then becomes a lot faster?.

kdevitt wrote: »

Ditto - think I'll start the job search back home.

Jaysus, I wouldn't got that far just yet mate!. Fair enough we will be down a few quid for sure, but quality of life comes above cash any day. We will just have to drink a few less schooners and stop buying bananas and we will we right!

kdevitt · 29-11-2011 12:29pm

Feelgood wrote: »

Jaysus, I wouldn't got that far just yet mate!. Fair enough we will be down a few quid for sure, but quality of life comes above cash any day. We will just have to drink a few less schooners and stop buying bananas and we will we right!

Not much point hanging around too long if I'd have more disposable income at home!

hussey · 29-11-2011 12:34pm

Feelgood wrote: »

Though if my employer sponsors me for ENS without skills assessment, am I then bound to that employer for the duration of my PR?.

Nope, but they could ask you to sign something or a fixed length term
a friend of mine had it written if she left within 6 months she paid the cost back, 12 months 1/2 it back. Not sure if they would ever enforce it (or if it was above board) but she was happy anyway

Am I also right in saying that if your employer sponsors you, this process then becomes a lot faster?.

Yes you are put near the top pile (if not the top),

LizOHagan · 29-11-2011 3:25pm

Hello,

LAFHA has been marketed and used heavily for some time. I expect this change and the understanding of the real cost of being on a 457 for families will hit home. Permanent residency is not (despite what was quoted in irish media in recent days) automatic just because you have a 457 visa. All 457 applicants should be investigating PR option now due to changes next year. ENS visas are being processed slower that some skilled visas at the moment so timing is everything.

Planning and good advice is critical.

Liz

mandrake04 · 29-11-2011 8:44pm

FYI on visa charges increase.

http://www.immi.gov.au/allforms/pdf/vpt-fact-sheet.pdf

jank · 30-11-2011 2:00am

LizOHagan wrote: »

Hello,

LAFHA has been marketed and used heavily for some time. I expect this change and the understanding of the real cost of being on a 457 for families will hit home. Permanent residency is not (despite what was quoted in irish media in recent days) automatic just because you have a 457 visa. All 457 applicants should be investigating PR option now due to changes next year. ENS visas are being processed slower that some skilled visas at the moment so timing is everything.

Planning and good advice is critical.

Liz

Good advice. Looking at the ENS time lines the processing has ballooned from a few weeks to about half a year. Can see a lot of people getting caught on these changes.

jockey#1 · 30-11-2011 2:06am

LizOHagan wrote: »

Hello,

LAFHA has been marketed and used heavily for some time. I expect this change and the understanding of the real cost of being on a 457 for families will hit home. Permanent residency is not (despite what was quoted in irish media in recent days) automatic just because you have a 457 visa. All 457 applicants should be investigating PR option now due to changes next year. ENS visas are being processed slower that some skilled visas at the moment so timing is everything.

Planning and good advice is critical.

Liz

Can I ask you when is a good and a bad time to apply for 175?

I'm almost there with preparation for my application just a few issues with my english test & skills assessment which I hope to have ironed out in a couple of weeks and have Visa application in before Xmas hopefully...

Mellor · 30-11-2011 3:10am

Feelgood wrote: »

Though if my employer sponsors me for ENS without skills assessment, am I then bound to that employer for the duration of my PR?. Am I also right in saying that if your employer sponsors you, this process then becomes a lot faster?.

It depends on your contract, but its prob onlt for 1-2 years max and only if they pay costs

hussey · 30-11-2011 5:41am

My housemate just put her PR in 3 weeks ago and was approved today, she had ENS!

sorry kinda unrelated to LAFHA

mandrake04 · 30-11-2011 11:01am

jockey#1 wrote: »

Can I ask you when is a good and a bad time to apply for 175?

.

Well any time before next year July as after then its only if you are invited to apply.

duke916 · 30-11-2011 3:44pm

jockey#1 wrote: »

Can I ask you when is a good and a bad time to apply for 175?

I'm almost there with preparation for my application just a few issues with my english test & skills assessment which I hope to have ironed out in a couple of weeks and have Visa application in before Xmas hopefully...

sooner the better...and wait some more. ive applied two years ago and aint even got a case officer. read on a couple of forums lately that GSM175's now taking 4/5 years to process. I rang my agent and says I'll be looking at another year at least. Life on hold - Goal posts keep moving. Sigh!

jockey#1 · 30-11-2011 10:52pm

duke916 wrote: »

sooner the better...and wait some more. ive applied two years ago and aint even got a case officer. read on a couple of forums lately that GSM175's now taking 4/5 years to process. I rang my agent and says I'll be looking at another year at least. Life on hold - Goal posts keep moving. Sigh!

Holy crap I was hoping I would have it within 12 months from what i gather on this forum and a few others. Can I ask what occupation you applied under and why you expect it to take this long

jank · 01-12-2011 10:31am

hussey wrote: »

My housemate just put her PR in 3 weeks ago and was approved today, she had ENS!

sorry kinda unrelated to LAFHA

Ask her if she used an agent and submitted it as a DRC application.
If she did all that then a few weeks is not surprising. Non-DRC applications take waaaaay longer.

Feelgood · 01-12-2011 10:42am

Mellor wrote: »

It depends on your contract, but its prob onlt for 1-2 years max and only if they pay costs

I'll be paying costs myself I'd say, so hopefully won't be bound to one employer. Kinda defeats the purpose of having PR. I'd like to be able
to switch jobs or maybe even move cities for a while.

mandrake04 wrote: »

Well any time before next year July as after then its only if you are invited to apply.

What do you mean here mate?

mandrake04 · 01-12-2011 11:56am

Feelgood wrote: »

What do you mean here mate?

At the moment if you have the 65 points you can just apply if you feel like it.

From next July no one will be applying for a GSM 175 or GSM 176 unless the government invites them to apply. Its called Expression of interest.

You actually register your interest in migrating if you make the minimum points threshold but that does not necessarily mean that you will be invited, depending on your occupation, level of English, Qualifications, Experience etc will give you a "Human Capital Value".

If for instance you are a Carpenter and the Industry/Government/Dweer collaboration decides they need 500 carpenters to migrate to Australia for that year then the computer runs through the database and invites the top 500 carpenters based on their Human capital value. Once that 500 ceiling is reached no more carpenter's until the next year (unless some don't apply then the next highest of the list will be invited).

If you are invited you have 2 months to apply or else your invitation is considered null and void. Anyone who registers is kept on the database for 2 years unless they are invited and have lodged an application. Australia will be deciding exactly what occupations its going to let in and to a certain extent where they want them to live.

Its also only optional for ENS, employers can look at the database (if they can be bothered) and select someone if they suit a vacant business but if you already have an employer willing to sponsor you don't even have to register on the database the government considers ENS as a priority so its an automatic green light.

Its just makes it a lot harder for a lot more people.

duke916 · 01-12-2011 1:18pm

jockey#1 wrote: »

Holy crap I was hoping I would have it within 12 months from what i gather on this forum and a few others. Can I ask what occupation you applied under and why you expect it to take this long

Im a graphic designer and at the time of application, it was on the SOL list. Thankfully I applied when I did because the SOL has been scrapped and other occupations slashed from the general list including mine. If you look on other migration forums to australia you'll see the MINIMUM wait is 18 months according to most agents. Considering all the numerous changes over the last two years etc, the waiting times are longer, much longer Im sorry to say. Believe me, this waiting and waiting is not what I had in mind but Ive no choice. I just have to keep my head down, hang on to my job and try save as much as I can til I get some response.

Reading various threads on forums such as pominoz.com etc where people who applied in Sept 2008 are still waiting. There is a huge backlog at the moment and the upsurge in applications from the likes or Ireland and other European countries due to recession with people migrating certainly isnt helping. Ive been told I may not hear anything til January 2012. I know my occupation is on the state sponsored list for South Australia but I dont want to go there. Plus Id have to cancel my current application at the cost of €3500 and apply again through the state at a cost of €1500 plus the paperwork headache all over again. If I didnt have my heart set on Australia I would chose somewhere else. Too much red tape and money in my opinion.....and your left waiting.

As Mandrake04 pointed out, the GSM175 visa is getting harder and harder to get. Eventually this will be phased out altogether from what Ive learnt from agents talking on other forums.

mandrake04 · 02-12-2011 11:10am

duke916 wrote: »

As Mandrake04 pointed out, the GSM175 visa is getting harder and harder to get. Eventually this will be phased out altogether from what Ive learnt from agents talking on other forums.

I don't think it will be phased out altogether but as one agent put it there are certain occupations which are a "protected species" while other common trades have been flagged possible removal.

There is going be a lot of disappointed people over the next 6 months there is already a big scramble for Skills assessment IELTS and limited State sponsorship so people can get in an application before the changes.

LizOHagan · 02-12-2011 2:48pm

The 175 visa as we know it will change in July 2012 as Australia looks for it's 'brightest and best'. It will then be an 'invitation' system and quotas for each occupation. Competition for occupations will be strong as those with the highest number of points will be more likely to get an 'invite'. Unlike now where you just need to meet the minimum passmark to lodge a visa.

Applicants will still need to have skill assessment and most likely IELTS before they can lodge an Expression of Interest (EOI) which means a financial investment and no guarantee of an invite and some skill assessment results are only valid for 12 months. The first lot of invites under the new program won't be until Jan 2013 so people will need to factor this in as well.

A bigger problem is due to the economic state of Ireland many applicants do not satisfy the recent work experience of 12 out of 24 months paid, taxable employment.

Processing times for Irish applicants varies but at the moment some 176 visa are being decided in 2-3 months and some 175 in approx 6 - 7 months.

So all in all a much different system for Australia but similar for New Zealand. In fact, New Zealand can work out easier for some applicants especially trades with the rebuilds etc.

duke916 · 02-12-2011 3:13pm

i just hope processing times will considerably speed up as its unfair having life on hold for what seems like an eternity, not knowing when your number is going to be called. 2 years and counting....

Their 'estimated' processing time and 'realistic' processing times are completely different. For the last two years all people keep asking me is 'so when are ya heading off? when in fact they know as much about it as I do.

mandrake04 · 02-12-2011 3:18pm

duke916 wrote: »

i just hope processing times will considerably speed up as its unfair having life on hold for what seems like an eternity, not knowing when your number is going to be called. 2 years and counting....

Their 'estimated' processing time and 'realistic' processing times are completely different. For the last two years all people keep asking me is 'so when are ya heading off? when in fact they know as much about it as I do.

Mate I reckon you will get it next year, from July 2012 to Jan 2013 they won't be accepting any 175 or 176. That's 6 months worth of catch up (about 54,000 visa's)

LizOHagan · 02-12-2011 3:26pm

Not much use to you Duke but this is one of the reasons the process is changing...so backlogs can be avoid and skill shortages met quicker.

Hope it comes through for you soon..Liz

MrThrifty · 17-12-2011 10:56pm

mandrake04 wrote: »

There is going be a lot of disappointed people over the next 6 months there is already a big scramble for Skills assessment IELTS and limited State sponsorship so people can get in an application before the changes.

Hopefully this thread is not too old to continue...

Asking a silly question maybe, why would people be disappointed? Are you thinking that a backlog with the skills assessment authorities and IELTS exams will mean that people might not get their application in before the proposed changes in July 2012? Or is there a possibility that even if you get your application in before July 2012, it may end up getting processed under the new system (invitation required)?

mandrake04 · 17-12-2011 11:40pm

MrThrifty wrote: »

Hopefully this thread is not too old to continue... Asking a silly question maybe, why would people be disappointed? Are you thinking that a backlog with the skills assessment authorities and IELTS exams will mean that people might not get their application in before the proposed changes in July 2012? Or is there a possibility that even if you get your application in before July 2012, it may end up getting processed under the new system (invitation required)?

Those requiring state sponsorship, depending on your occupation as the states only issue x number of any particular occupation in a fiscal year. In some states a few occupations x has already been reached and its only December, you need IELTS and Skills assessment to apply for State sponsorship so there is a bottleneck in those two areas.

Factor in the January holidays and the sheer volume of applications its going go down to the wire. Its like setting up dominoes to all fall in series.

If you get an application in before July is will be processed under the old process.

MrThrifty · 18-12-2011 8:29pm

mandrake04 wrote: »

... as the states only issue x number of any particular occupation in a fiscal year.

Thanks, I hadn't realised that. Ah sure, there's always the easier option of just getting sponsorship from abroad I guess... JOKING! -just winding you up!

mandrake04 · 18-12-2011 9:24pm

MrThrifty wrote: »

Thanks, I hadn't realised that. Ah sure, there's always the easier option of just getting sponsorship from abroad I guess... JOKING! -just winding you up!

Its not impossible to get sponsorship from abroad, but after July it will be the only option for some.

coldpaw · 28-12-2011 1:32am

Hi, thought I would add my questions here:

I will be taking up a full time job early in the new year. Would people recommend I attempt to get the LAFHA until July?

I have heard that it is best to apply through a payroll company to catch the allowance. Does anyone know how this works? I will not be paid through a payroll company automatically, so would people recommend I use one until July and then switch back? Anyone know a good company in Sydney?

Finally does anyone have an indication of how long the 457 sponsorship process takes. There is a strong chance I can get sponsored through this position, but I have to do 3 month's probation first. As I am on a 2ndWHV this mean I can only work for another 3 months with the company.

Thanks for all the help

hussey · 28-12-2011 6:45am

Don't use a payroll company if you can, yes it's definitely worth it if you can get it via your company.

You can then go option of payroll company, but just make sure you know what rates they charge etc etc

457 can take anywhere between 2 days and 2 months. You can apply for a bridging visa which allows you to stay working after 6 month rule is up - more info do a search on the forum

coldpaw · 22-01-2012 10:40am

Sorry im back again with more Lahfa questions.

Does anyone know if you are entitled to LAFHA on a 417 working holiday? Im nearly sure some of my friends here are getting it but in work they told me it was not possible.

Also work have told me that you can only claim LAFHA for 18 months (I know it finishes in July) and you must state that you intend to leave the country otherwise they will hit you with a tax bill if you stay.

Im not sure whether it is my ignorance or poor advice from work, but if possible I want to claim while I can without detriment to any future visa and residency applications.

Cheers ya'll

Barry

hussey · 22-01-2012 11:21pm

It is possible and some companies offer it - mainly pay roll companies like Geoffrey Nathan etc etc, but it is dodgy as, LAFHA is an employee fringe benefit that is given to you by your employer, so if something goes wrong then they are liable.

You can start LAFHA when ever your employer deems fit, and it's up to them to define what they believe is the criteria.

My old employer said I could claim it, but I needed a home to claim it, i.e. living away from home - meaning I needed to own property.
I argued for months but never got there. As I said it's up to them

coldpaw · 23-01-2012 12:44pm

Thanks Hussey.

Ill just roll with it and see if I can prise it out of them and in the meantime try get more info.

karl bracken · 08-02-2012 12:14pm

So in lay mans terms if your on LAFHA (im not) unless you are fly in fly out you are loosing it?
living and working in Sydney will not cut it on 457

didnt really get this bit below?

individuals will be required to substantiate their actual expenditure on accommodation and food beyond a statutory amount.

hussey · 08-02-2012 9:32pm

Living in sydney and your 'home' being Ireland can not be classed as LAFHA anymore,
but of you work in sydney and your job ships you off to wagga wagga for 3 weeks, you can get LAFHA. Doesn't have to be FIFO (in fact I don't think that counts at all)

That was what the tax benefit was suppose to be for, rather than foreign workers claiming it since their home was not Australia

ellaq · 09-02-2012 4:14am

FIFO don't get it.....as your employer provides your food and accommodation.

Feelgood · 10-02-2012 5:51am

Bit of an update

Immi Migration Blog

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.

loueeeeeez · 10-02-2012 5:59am

its a whole load of c*** anyways, you're better of paying the full tax on your salary cause you'll get it all back when you go home, its a way of saving!

hussey · 10-02-2012 6:17am

loueeeeeez wrote: »

its a whole load of c*** anyways, you're better of paying the full tax on your salary cause you'll get it all back when you go home, its a way of saving!

No - that's not true at all. Lafha is a huge benefit.

You do not get 'all your tax back' when you leave Australia, that's a myth, you get tax you have overpaid. If someone tells you they got all their tax back, it's usually as they have been paid less than 40k (called the low income offset) and have not worked through the year.

dave3004 · 10-02-2012 6:19am

loueeeeeez wrote: »

its a whole load of c*** anyways, you're better of paying the full tax on your salary cause you'll get it all back when you go home, its a way of saving!

So many points wrong with this.

1 - Not everyone on a 457 wants to go home. Indeed being on a 457 probably means you want to stay (and the person is claiming LAFHA for years up to but excluding the year they need to apply for residency)

2 - Even if they do want to go home, there is a roof on how much tax you can claim back per annum. So you may pay 10k tax but can only claim 7k back - The LAFHA helps ppl avoid this situation also

The update is good news for people on a 457 visa but bad news for the sponsors. I am going to not say a word and hopefully it’s a seamless transition :P

hussey · 10-02-2012 6:38am

dave3004 wrote: »

2 - Even if they do want to go home, there is a roof on how much tax you can claim back per annum. So you may pay 10k tax but can only claim 7k back.

Didn't know of any roof limit - do you have a link for this?

digiman · 10-02-2012 12:07pm

Just got my first payslip there today and got the full LAHA on it, $650 for rent and $289 for food. I will be supporting my girlfriend until she gets a job so thats why I got extra for the food allowance. I will have to change it back once she gets employed I assume.

Will she also be entitled to claim $650 for rent also? She is a de-facto of mine under my 457.

Also, if I apply for PR next year will I have to pay back all the LAHA that I received?

Bye bye LAFHA, no more gravy train

Comments