LAFHA gets three month reprieve
The Government has made a last gasp decision to delay its reforms to the Living Away From Home Allowance which were due to take place from Sunday.
The changes – which will see the axing of a perk worth thousands of dollars a year will now be put off until October 1.
The issue has triggered huge debate on Mumbrella’s comment threads because of the large number of workers from overseas and particularly the UK employed within the media and marketing industry.
The end of the allowance – which effectively allows recipients to claim living costs tax free – will see claimants thousands of dollars a year worse off. Even if employers do not increase salaries to make up the shortfall they will be hit with an increased super bill.
However, the three month extension does at least partly address criticisms during the consultation period that LAFHA was axed on too short notice, leaving workers with little time to cut costs by moving to cheaper accommodation.
Today’s announcement from the treasury stated: “In response to the submissions received, the Government has taken the decision to defer the start date of the reforms from 1July 2012 to 1 October 2012.”
It quoted assistant treasurer David Bradbury as saying: “This deferral will give employers and employees more time to prepare for the new arrangements.”
The announcement in full:
A Bill introduced into the Parliament today will implement a range of improvements to Australia’s tax laws, including those relating to living-away-from-home (LAFH) allowances and benefits, said Assistant Treasurer David Bradbury.
The Tax Laws Amendment (2012 Measures No. 4) Bill 2012 will reform the tax concession for LAFH allowances and benefits, clarify GST rules relating to incapacitated entities, and ensure that interest and penalties are not payable on changes as a result of recent amendments to the Consolidation regime.
The Bill will implement the two reforms to the tax concession for LAFH allowances and benefits that were announced as part of last year’s Mid-Year Economic and Fiscal Outlook, and also the two reforms that were announced in this year’s Budget.
“These reforms will better target the tax concession for LAFH allowances and benefits to people who are legitimately maintaining a home away from their actual home in Australia for an initial period,” said Mr Bradbury.
The Government announced the following two reforms on 29 November 2011 as part of the Mid-Year Economic and Fiscal Outlook, and said on announcement that they would apply from 1 July 2012:
Temporary residents will need to be maintaining a home for their own use in Australia that they are required to live away from for work, to be able to access the tax concession; and
All individuals will need to substantiate their actual expenditure on accommodation and food.
The Government announced two additional reforms to the tax concession in this year’s Budget on 8 May 2012, and said on announcement that they would apply from 1 July 2012 for arrangements entered into after Budget night, and from 1 July 2014 for arrangements entered into prior to that time:
Permanent residents will need to be maintaining a home for their own use in Australia that they are required to live away from for work, to be able to access the tax concession; and
There will be a 12-month time limit on how long all individuals (other than fly-in fly-out workers) can access the tax concession.
These reforms will not affect:
the tax concession for fly-in fly-out arrangements, as these employees will not be subject to the 12-month time limit;
the tax treatment of travel and meal allowances, which are provided to employees who have to travel from their usual place of work for short periods (generally up to 21 days);
the tax concessions that are provided for remote area fringe benefits.
The Government has held two extensive consultation processes in relation to these reforms.
In response to the submissions received, the Government has taken the decision to defer the start date of the reforms from 1July 2012 to 1 October 2012.
“This deferral will give employers and employees more time to prepare for the new arrangements,” said Mr Bradbury.
In addition, a number of technical changes have been made to the amendments in response to feedback on the exposure draft of the legislation.
“Our reforms to the tax concession for LAFH allowances and benefits will ensure that this taxpayer-funded tax break can’t be misused or exploited,” said Mr Bradbury.
“The tax concession will continue to support people who are bearing additional costs because they have to maintain a home away from their actual home in Australia for work purposes, for up to 12 months.”
Declaration of interest: Mumbrella’s parent company Focal Attractions employs staff affected by the reforms
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Quick! Everybody post long winded angry comments regarding this article!
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$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Thanks, Aussies
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I am too exhausted to comment.
Good luck everyone.
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@$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$ $$$$$$$$$$$$ $$$$$$$$$$$$$$ Amazing!
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The exodus of whingeing poms is delayed by another 3 months.. damn
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Boom! I’ll take what I can get. Thanks Australia!
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Champagne for breakfast!
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Corfu for Christmas!
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Ya bunch of pommie wankas
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If I was Australian, I’d be slightly concerned about the bloke in charge of all this
Step forward Mr Swan….
1) November 2011 – ‘foreigners are rorting the system!’ .. even though more Australians get Lafha, including MP’s, than foreigners.
2) May 2012 – ‘we’ve decided to mix it up a bit, and just descriminate against the people who can’t vote us out’ … which is directly in breach of Australian Federal Tax laws set in stone about 70 years ago.
3) June 28th (leaving 1 working day for any changes to be sorted out by any HR department employing a foreginer) – ‘we’ll give you 3 more months because we’ve realised we were breaking about 8 laws and a few MP’s need to get rid of the leases on the bentleys’
I was all set to swear allegiance but i woudnt want this bloke in charge of where my taxes are going….
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Lafha gone for temps from 30 Oct but many already gone from 1 Jul anyway.
For those highly paid rorting 457ers from the Eastern Suburbs looking for cheap housing Blacktown and Minto are excellent suburbs to get a real look at an Aussie way of life.
http://www.triplem.com.au/sydn.....iple-m-90s
Click on how you could live at Blacktown or move down a little and listen to the Minto song.
Really the rorting should be blamed not on gullible overseas employees blindly signing stupid aussie lafha employment contracts but on the companies paying less super, less state payroll tax, less workers compo insurances, leeching payroll companies and HR staff targetting KPI bonus payments for reduced company costs.
This is a allowance that was used for aussies to add to salary (x + lafha ) when working away from home then stuffed up for all by companies cutting costs giving rorts ( x – lafha ) without explaining the truth to overseas workers. This change has been mooted for 2 years and pushed by the unions backing the Labor government. Families from o/s here now are stuffed and this should not have happened!
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I welcome this news. It permits me to rort the tax system for a few more months.
I’ll probably leave after that. Thanks for giving me the opportunity to stash the cash.
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wow…. as a normal Englishman, the above comments saying ‘wahoo, we milked more cash’ etc or something similar do not reflect my views in any way. I realise they are a childish attempt to fan the flames by a morinic minority but many a true word is spoken in jest. go home wankers, youre emabarrasing
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LAFHA abusers are working in every mining company in this country. The tax benefit should rightfully be scrapped because most of the people benefiting from it already earn 4 times what the average Australian does and 4 times what they would earn in their own (economically collapsed) country.
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Just happy to have more time to sort out finances. When you leave your home country for a job with a contract that states an amount you will make with LAFHA benefits, you organise your life with the anticipation of making that amount. When someone all of a sudden informs you that you are about to take a 25% pay cut in 2 months time (bringing your pay to less than the job you left in your home country) even though you have fulfilled your obligations, its tough to stomach, even seems a bit unfair. The 3 months extra is a nice and welcomed time to adjust or to reconsider if its economically viable to stay.
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A big thanks goes to Damps for pulling this off……..
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Dear Aussie(s),
your argumentation, esp no 5 above reminds me of the attitude and laws which were implemented for the jews in Europe in the 1930s, by a person you presumably were fighting against in WW2.
Your attitude is indeed frightening
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Another bungle by the Aussies elected Government… its one after the other here. Australia needs to import “skilled” migrants to get anything meaningful done….. when the world starts turning watch the exodus of skilled workers followed by a bigger skill shortage but the short sighted Government cant see it yet………
Bring on the next Maggie Thatcher to crush the Unions as they have Australia crippled!
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What a rort! Waste of tax payees money…It will be all over soon
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Looks like LAFHA has been referred to a House Committee! This will report back to parliment so the lafha bill – tax measures no. 4 can be passed into law for 1 Oct 12. This currently has no transistion for temps. sorry guys.
http://www.aph.gov.au/Parliame...../index.htm
Links do not work yet, but send comments direct to members now.
Do not get your hopes up though, it has 4 labor stooges of 7 members in it.The Labor members are all Union backed in and are really Swan puppets. Oh hang on one of the government members is Craig Thomson the member famous for his credit card rorting. So if you want to continue rorting lafha, lobby the bloke that is the number one rorter in Aus. He may even shed a tear for you to help out.
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To those Aussies who moan about whinging poms;
1. Who else is going to come here and help you build your economy…..it’s not going to be built by a bunch of ute driving, stubbie drinking, hi vis t-shirt wearing aussie’s now is it!
2. We have to have some benefit for putting up with the aussie’s I spoke about in point 1
3. Rest assured, once the Chinese economy collapses and yours follows suit, we will all go back home as the rest of the world will be back on its feet by then!
Ta ta for now!
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Can you get a refund on your Corfu tickets and that bottle of champaign. Might be required for the one way to the UK!
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I rort, therefore I am.
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