Guest JacquiHH

Living Away From Home Allowance....can you get it on the State sponsored 475 visa??

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    Guest JacquiHH

    I have searched and searched for this answer!! So please does anyone have a clear answer - can you get living away from home allowance on the State Sponsored 475 visa (not the 457 visa!). Is anyone getting it??

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    From memory if you were employed by a company in the UK and transferred to Adelaide with that company then you can claim it (you're supposed to be going back to the UK). I'm on a 475, left my job in the UK and found a new job here and didn't feel that this was covered.

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    sorry can only help from a 457 perspective in which instance i do get LAFHA though it is under review following the governments advice that they will reduce it in some for or other. My work have advised that any loss will be made up in other ways.

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    In principle, yes you can - but your employer should be asking whether you are really living away from your usual place of residence.

     

    On a s/c 475 visa you are usually part of the way to permanent residency, which indicates you are in fact living at your usual place of abode.

     

    Best regards.

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    Guest Mitchell
    sorry can only help from a 457 perspective in which instance i do get LAFHA though it is under review following the governments advice that they will reduce it in some for or other. My work have advised that any loss will be made up in other ways.

     

    I'm on a 457 too and don't get it. I'm told that as its my intension to stay permanently even though my visa is a temp one I don't qualify and I believe that's one of the tests to see if you qualify. If you're here temp with the intension of returning to the uk is the only way to qualify.

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    I have searched and searched for this answer!! So please does anyone have a clear answer - can you get living away from home allowance on the State Sponsored 475 visa (not the 457 visa!). Is anyone getting it??

     

    We are on a 457 and it was always our intention to stay and have been getting the LAFHA since we got here. Hubby didn't work for the company in England either. I suppose it depends on your employer. My hubby's company were the ones who informed us about it. I do know though that once you start the process for PR it stops.

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    Guest Ian Lindgren
    I have searched and searched for this answer!! So please does anyone have a clear answer - can you get living away from home allowance on the State Sponsored 475 visa (not the 457 visa!). Is anyone getting it??

     

    Hi Jacqui,

     

    The quick and authoritative answer to your question is yes, you can get LAFHA on a Skilled – Regional Sponsored (Provisional) Visa (Subclass 475) so long as you have not applied for a PR and you intend to return home.

     

    However, and there is an however, you won’t find that written to many places because the regional element confuses many people.

     

    The first thing you need to consider is that LAFHA is very likely to change on 1 July 2012 in such a way that in order to be eligible you will need to have:

    • Moved to Australia and rented or purchased a property while working for your employer,
    • Then be required to move temporarily to another location by your employer,
    • And while you are away, you must leave that first property as a property you maintain, eg, you must still pay the lease on it and not sublet it,
    • Then you must rent a property in the new location.

    Big ask! But some people will meet the requirements. Essentially it treats all people the same no matter whether they are Australian citizens or foreign citizens. In saying that, I personally do not agree with the changes, but we must adopt Government policy.

     

    So with that in mind, are you likely to be eligible for LAFHA after 1 July? If you think you are, and at the moment you intend to return home, then it is likely that you are eligible for LAFHA now and after 1 July. If this is the case it might be time to request LAFHA from your employer, but please be aware that it is not an entitlement. It is only paid if your employer knows about it, agrees with it, and then wants to pay it.

     

    If you think it is worth the effort, ask one of the LAFHA providers to assess you.

    Regards,

     

    Ian

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    Guest ed999

    We will find out whether the 2 year transitional arrangements are to apply to 457 visa holders after 28 June (b

    ill will be voted on by Parliament).

     

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    Guest ed999
    We will find out whether the 2 year transitional arrangements are to apply to 457 visa holders after 28 June (b

    ill will be voted on by Parliament).

     

     

    Beyond Numbers

    Panic Averted: LAFHA changes deferred to 1 October

     

    Whilst the start date for the living away from home allowance (“LAFHA”) changes has been deferred from 1 July 2012 to 1 October 2012, Tax Laws Amendment (2012 Measures No. 4) Bill 2012 (“the Bill”) is introducing a number of new concepts. Therefore, business will need to determine how they will respond to these changes in coming months.

     

    Just as employers and employees were trying to finalise how they would deal with the new living allowance regime from 1 July 2012 based upon the exposure draft legislation, the Treasurer has announced the starting date of the LAFHA reform will be deferred to 1 October 2012.

     

    The introduction of the Bill into the Parliament comes less than 3 days prior to the supposed start date of the LAFHA reforms as previously proposed during the consultation process.

     

    This additional lead-in time will no doubt be welcomed by many employers as they put in place policies and system changes in order to comply with the changed administration requirements of the new regime. The Bill also presented a series of technical changes from the previously released exposure draft.

     

    Key changes

     

    • The employee will not be assessed on the food and drink amounts up to the first $42 per adult and $21 per child per week, if the employee has provided a living away from home declaration that includes a statement that they will incur food and drink expenses.

     

    • The above amounts, now referred to as ‘ordinary weekly food and drink expense’, will now be treated as a fringe benefit. This is in contrast to the original announcement whereby an amount of $110 per adult and $55 per child per week that would have been included in the employee’s assessable income. (Note: If the employee does not provide a living away from home declaration then the first $42 per adult and $21 per child per week would be assessable income to the employee).

     

    • The employee will continue to be able to claim an income tax deduction, to the extent that the

    payments made are reasonable, for:

     

    - accommodation expenses incurred; and

    - food and drink expenses incurred above the ‘ordinary weekly food and drink expense’.

    (Note: the reasonable food and drink expense will be set by the Commissioner of Taxation).

     

    • Applications can be made to the Commissioner of Taxation (“the Commissioner”) to vary the amount of tax to be withheld under the Pay-As-You-Go Withholding system for the allowance received.

     

    Uncertainties remain...

    Fringe benefits tax and superannuation guarantee contributions

    As previously reported, the Bill remained silent on the interaction with the other exemption provisions within the Fringe Benefits Tax Assessment Act 1986.

     

    With respect to superannuation guarantee contribution, the accommodation component would be considered an expense allowance that will be fully expended under the reform and should not be ordinary times earnings (“OTE”).

     

    The food component, however, is a lot trickier and will depend upon whether or not the employee provides a living away from home declaration.

     

    Where a declaration is provided the employer will not be required to provide minimum superannuation support for the food component received by the employee as the amount is considered to be an expense allowance.

     

    On the other hand, if a declaration has not been provided to the employer:

     

    • the ordinary food and drink expense will arguably be OTE for superannuation guarantee purposes;

    • to the extent that the employee is entitled to an income tax deduction for the food and drink expenses incurred, the employer will arguably not required to provide superannuation support for that portion of the LAFHA food component as it represents an expense allowance; and

    • The employer will be required to provide superannuation support for any assessable amount above the reasonable amount determined by the Commissioner.

    State imposts

     

    Unfortunately, there is still no guidance on how the various state authorities will respond to the LAFHA reform in respect of payroll tax and WorkCover obligations. Unless the current legislations are amended, a situation could

    arise where the entire accommodation component and food component (both the FBT component and income tax assessable component) would be subject to these stat imposts.

     

    This would represent in a windfall gain for the states, as under the current regime a correctly structured LAFHA

    arrangement is exempt from payroll tax or WorkCover obligations.

     

    The unchanged…

     

    The following aspects of the proposed LAFHA reforms have remained unchanged:

     

    • The requirement for all employees to maintain a home in Australia and live away from that home for work-related purposes;

    • The 12-month time limit for all individuals (other than fly-in fly-out workers) to access the income tax deductions with respect to LAFHA;

    • Limited transitional rules will continue to apply for existing arrangements entered prior to 7:30pm (AEST) 8 May 2012; and

    • All employees will be required to substantiate the actual accommodation costs, as well as food and drink expenses if they exceed the amounts stipulated by the Commissioner.

     

    For further details please refer to our previous article:

     

    http://moorestephensresources.com.au/articles/677/1/Draft-LAFHA-legislation-released--More-bad-news-littlegood-news/Page1.html

     

    It is hopeful that with the revised start date, the Federal Government will now address the remaining issues previously identified during the consultation process, further allaying the uncertainties created for both employers and employees alike surrounding this reform.

     

    Questions

     

    Please do not hesitate to contact Peejade Cheng, Stephen O’Flynn or your Moore Stephens Relationship Partner to discuss any of the above LAFHA changes.

     

    Authors: Stephen O’Flynn and Peejade Cheng, Moore Stephens Melbourne

     

    *Source:

     

    http://moorestephensresources.com.au/articles/702/1/Panic-Averted-LAFHA-changes-deferred-to-1-October/Page1.html

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