Lafha

[Guest janette&eddie]

Hi,

we are currently 10 months into a 4 year 457 visa and receiving living away from home allowance.

We are about to apply for PR and would like to know if we lose the LAFHA as soon as we apply.

The LAFHA is arranged against my employment, so if Janette applies for PR for herself and the kids, can I keep the LAFHA or would I still lose it?

 

Any help would be appeciated.

Ed

[Guest Ian Lindgren]

Hi Ed,

Happy to help! Myname is Ian Lindgren and I am the CEO of PayMe Australia. In the ATO’s FBT minutes, May 2009, itlooked at this precise question and toquote, “The Tax Office did acknowledge that, for example, anemployee’s application for permanent residency status, by itself would not meanan employee would not be entitled to be paid a LAFHA. All other factors wouldneed to be considered.

However, once an employee had obtained permanentresidency status it would appear that, even when taking into account othercircumstances relating to that employee, it must be concluded that anentitlement to a LAFHA, from that time, no longer exists.

This givesyour employer the flexibility to continue to pay you LAFHA because you are not guaranteedPR. In fact the whole process takes along time and the key LAFHA reference used by the ATO goes on to saythe question whether an employee is living away from his or her usual place ofresidence normally involves a choice between two places of residence, i.e., theplace where the employee is living at the time or some other place.

A person is regarded as living away from a usual placeof residence if, but for having to change residence in order to worktemporarily for his employer at another locality; the employee would havecontinued to live at the former place.

It would be relevant in reaching that view that thereis an intention or expectation of the employee returning to live at the formerplace of residence on cessation of work at the temporary job locality.

So in other words, you won’t be returning home until eitheryour visa expires and/or your PR is not approved and if it were not for thosetwo issues you would have returned to your former place of residence. Therefore your employer has the flexibilityto continue paying you LAFHA.

 

Regards,

 

Ian