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Old May 10th 2012, 2:18 am   #46
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Default Re: LAFHA - Budget 2012/13

not our site most of the FIFO guys have to source there own rentals
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Old May 10th 2012, 2:43 am   #47
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Default Re: LAFHA - Budget 2012/13

Bad news, look like we were all mistaken - see this from http://www.linkedin.com/groupItem?vi...-1#lastComment


I do hope more people will continue to call and speak to Treasury, but I will also fill in some of the substance that I was told in speaking to Rebecca Fanning.

First, Treasury believes it was completely clear in November of last year that we'd be losing LAFHA in July (we being 457 visa holders and other temp residents not maintaining two homes in Aus), so we should have been planning since then for how we would cope without it. (So Chris, they think they did make it public -- months ago.) This includes renegotiating with our employers. My argument that no one thought that announcement was clear, and that the reference to transitional rules made us all believe something more was coming, fell flat. I explained that employers would not renegotiate based on the MYEFO, and that we could not make plans to relocate to the other side of the world based on MYEFO, but to no avail. Apparently not only were we supposed to think it was totally clear, but so were employers and Treasury expected that they would begin renegotiating with us then. So, Treasury doesn't think they're giving us less than two months to get sorted -- they think they've given us seven months to do it.

Second, the tax savings figures in the Budget versus the MYEFO are not reduced. They are two separate things. The figures in the Budget show the tax savings from only the new measures introduced in the Budget (the application of the new LAFHA rules to PRs and the 12 month limit on all LAFHA claims). MYEFO shows the tax savings from the measures instituted there -- taking it away from temporary workers and requiring substantiation of the expenses. So the total savings on LAFHA reforms are the figures from the two documents added together. (Maybe it's just the American lawyer in me, but who issues a 300+ page document with incomplete information that requires you to read it in conjunction with another document in order to piece together the actual truth!??!?!)

Third, Treasury never promised any transitional rules for us, and the reference to consultation and transitional rules in the MYEFO only meant that they would take comment and possibly make rules with respect to "unintended consquences" of the reforms. Apparently all of us losing substantial amounts of money due to leases, employment agreements, children's school deposits, etc. is not an unintended consequence for which Treasury saw transitional rules to be fit.

Fourth, though this was less of a point of discussion on my call, stopping LAFHA is important to keeping the Aussie taxpayers from having to fund our rent. We grazed the subject of how we pay less in tax but get no services, etc. but I wasn't going to get into this argument with her since it wasn't really helpful to the conversation. It did, however, give me a glimpse of Treasury's perspective on this, that we have all been mooching off the system and it's time to shut it down. We on this board keep saying "but we're not the rich execeutives taking advantage of it," but by Treasury's view, we are. When I said that it was clearly Australia's right to end LAFHA, but that we would expect some sort of transition to make it possible for us to finish out our agreements and not subject ourselves to massive financial penalties, I was given no sympathy whatsoever.

I was told that since there "seems to be confusion" about the grandfather clause, Treasury may issue a clarifying statement. Whether or not it comes, though, they are applying the reforms to all of us here as of 1 July 2012. I asked that if they are going to issue a statement, could they please include in it a message to employers that Treasury expects that they will be renegotiating with us. She said they would consider it.
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Old May 10th 2012, 5:04 am   #48
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Default Re: LAFHA - Budget 2012/13

Dear Colleague

Urgent and your immediate attention required please.

This is an urgent message following the notification issued to you yesterday Wednesday the 9th of May 2012, indicating you may qualify under the “transitionary period” of the Living Away From Home (LAFH) Reforms. This was based on communications received from our tax provider, industry group and indeed the information contained in the Federal Budget. This information however, has proven to be ambiguous and only after further direct questioning has the Federal Treasury clarified the intent of the LAFH reforms and who qualifies for the “transition period”.

The Australian Federal Treasury has confirmed late afternoon (Wednesday the 9th of May 2012), that “transitional period to 30 June 2014” mentioned in the 2012-13 Budget, only applies to employees receiving a LAFH concession as at 8 May 2012, where they maintained a home in Australia (for their use), were not currently living in it, and are receiving a LAFH concession for living temporarily in other city.

Accordingly, as a 457 Visa holder (or temporary resident), it would be highly unlikely you are maintaining a home in Australia (for your own use) and then receiving a LAFH concession whilst working in another city. Typically, you receive a LAFHA for living in a home that you currently occupy.

This means the LAFH concession you currently receive would likely no longer apply after 30 June 2012, based on what was announced in the Australian Budget on 8 May 2012 and subsequently clarified by Australian Treasury late on the 9th of May 2012.

Please note that this information is based on the Federal Budget announcement only. The actual LAFH Legislation that has to be passed by Australian Parliament has not yet been created (we are advised this may not be ready till later this month). That is the final LAFH “rules” including transition period, will not be known until the LAFH Legislation is passed (but based on what we know at this time, the indication is that you will likely no longer qualify for a LAFHA concession beyond 30 June 2012).
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Old May 10th 2012, 7:29 am   #49
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Default Re: LAFHA - Budget 2012/13

Gone then?
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Old May 10th 2012, 7:41 am   #50
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Default Re: LAFHA - Budget 2012/13

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Gone then?
Yep, seems that way. Means moving job is back on though.
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Old May 10th 2012, 7:44 am   #51
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Default Re: LAFHA - Budget 2012/13

Like everyone I'm pretty confused.

Who does the grandfathering apply to, that then won't be eligible after 2014? I can't see the point in the grandfathering clause at all???
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Old May 10th 2012, 2:41 pm   #52
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Default Re: LAFHA - Budget 2012/13

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IMHO they should make it much easier to get PR for skills that are genuinely in demand.
I agree. Supply and demand. . .
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Old May 10th 2012, 2:57 pm   #53
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Default Re: LAFHA - Budget 2012/13

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Originally Posted by towers View Post
Bad news, look like we were all mistaken - see this from http://www.linkedin.com/groupItem?vi...-1#lastComment


I do hope more people will continue to call and speak to Treasury, but I will also fill in some of the substance that I was told in speaking to Rebecca Fanning.

First, Treasury believes it was completely clear in November of last year that we'd be losing LAFHA in July (we being 457 visa holders and other temp residents not maintaining two homes in Aus), so we should have been planning since then for how we would cope without it. (So Chris, they think they did make it public -- months ago.) This includes renegotiating with our employers. My argument that no one thought that announcement was clear, and that the reference to transitional rules made us all believe something more was coming, fell flat. I explained that employers would not renegotiate based on the MYEFO, and that we could not make plans to relocate to the other side of the world based on MYEFO, but to no avail. Apparently not only were we supposed to think it was totally clear, but so were employers and Treasury expected that they would begin renegotiating with us then. So, Treasury doesn't think they're giving us less than two months to get sorted -- they think they've given us seven months to do it.

Second, the tax savings figures in the Budget versus the MYEFO are not reduced. They are two separate things. The figures in the Budget show the tax savings from only the new measures introduced in the Budget (the application of the new LAFHA rules to PRs and the 12 month limit on all LAFHA claims). MYEFO shows the tax savings from the measures instituted there -- taking it away from temporary workers and requiring substantiation of the expenses. So the total savings on LAFHA reforms are the figures from the two documents added together. (Maybe it's just the American lawyer in me, but who issues a 300+ page document with incomplete information that requires you to read it in conjunction with another document in order to piece together the actual truth!??!?!)

Third, Treasury never promised any transitional rules for us, and the reference to consultation and transitional rules in the MYEFO only meant that they would take comment and possibly make rules with respect to "unintended consquences" of the reforms. Apparently all of us losing substantial amounts of money due to leases, employment agreements, children's school deposits, etc. is not an unintended consequence for which Treasury saw transitional rules to be fit.

Fourth, though this was less of a point of discussion on my call, stopping LAFHA is important to keeping the Aussie taxpayers from having to fund our rent. We grazed the subject of how we pay less in tax but get no services, etc. but I wasn't going to get into this argument with her since it wasn't really helpful to the conversation. It did, however, give me a glimpse of Treasury's perspective on this, that we have all been mooching off the system and it's time to shut it down. We on this board keep saying "but we're not the rich execeutives taking advantage of it," but by Treasury's view, we are. When I said that it was clearly Australia's right to end LAFHA, but that we would expect some sort of transition to make it possible for us to finish out our agreements and not subject ourselves to massive financial penalties, I was given no sympathy whatsoever.

I was told that since there "seems to be confusion" about the grandfather clause, Treasury may issue a clarifying statement. Whether or not it comes, though, they are applying the reforms to all of us here as of 1 July 2012. I asked that if they are going to issue a statement, could they please include in it a message to employers that Treasury expects that they will be renegotiating with us. She said they would consider it.
Makes NO sense to me at all. Why do they have a 2 year transitional arrangement in place at all? - it doesn't seem to apply to anybody.

I firmly believe they have their heads so far up their jacksies on this LAFHA thing that they don't know themselves where they're going with it!

BTW, my company received 'expert' advice today which confirms my LAFHA tax benefits will end on 30 June 2012. I have replied advising expectation that my contract will be renegotiated and pay increased to compensate (I've been asking for this renegotiation since December 2011). I'll post what happens but won't be holding my breath. I've started the job search and applied for 7 jobs already.
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Old May 10th 2012, 3:04 pm   #54
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Default Re: LAFHA - Budget 2012/13

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Like everyone I'm pretty confused.

Who does the grandfathering apply to, that then won't be eligible after 2014? I can't see the point in the grandfathering clause at all???
Yes I have this question too. Who does the 2014 thing apply to? - seems nobody so why is it there?

I honestly think they've lost the plot and don't know their jacksies from their elbows!
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Old May 10th 2012, 3:17 pm   #55
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Default Re: LAFHA - Budget 2012/13

No no no, I am really pi**ed off and unimpressed with this country. I might just throw a wobbly tomorrow and quit. ***** em.
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Old May 10th 2012, 11:58 pm   #56
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Default Re: LAFHA - Budget 2012/13

Sorry to see people getting shafted like this as the government seems to have screwed up big time. I didn't agree with LAFHA and think it was poorly designed in the first place. But this is unfair on those losing it without much notice at all.
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Old May 11th 2012, 1:57 am   #57
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Default Re: LAFHA - Budget 2012/13

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If you can't afford to live here, move.

I don't understand these kinds of comments. Most new hires are on 457's are NOT being told to assume LAFHA will be in place going forward. When I was hired in January (arriving in March) I was told best case to assume LAFHA is in place until June 30th and I planned accordingly. I also understand the complaining by those not on it - typical of any tax break, if you get it you like it, if you do not, you hate it. I am single and have never been a fan of all the handouts familes get - and this new budget is full of new handouts essentially to buy votes from families that make up a certain voting block. Offset the carbon tax with handouts, essentially making it a stealth tax on the 'well off'. Nice, real nice. Yet that is how tax codes work - votes are bought with handouts, certain groups (singles for example) get screwed, but the majority targeted is happy. It is shocking that a perk for non-voting tax payers like LAFHA 457's lasted as long as it has.

For me, as a well paid ex-pat that is single, I'd actually have been in favor of a transition period for people making say under 150K with familes that came in last year and in 2010 before these reforms were announced. This way people were not 'bait and switched' which is what occcured here with familes in particular - it is not easy to just 'move' when you are supporting 4 other people, brought in on a relocation package, and have kids in school under a change that is not giving people time to adapt.

The real lesson here is why middle class familes or those on average incomes should never, ever trust government perks when they budget anything - what the government gives it can take away which is why I personally never budget for anything based on government 'gifts' such as this. Overall a lot of people are being screwed here on short notice, a real shame.

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Old May 11th 2012, 2:30 am   #58
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Default Re: LAFHA - Budget 2012/13

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Originally Posted by rld1177 View Post
I don't understand these kinds of comments. Most new hires are on 457's are NOT being told to assume LAFHA will be in place going forward. When I was hired in January (arriving in March) I was told best case to assume LAFHA is in place until June 30th and I planned accordingly. I also understand the complaining by those not on it - typical of any tax break, if you get it you like it, if you do not, you hate it. I am single and have never been a fan of all the handouts familes get - and this new budget is full of new handouts essentially to buy votes from families that make up a certain voting block. Offset the carbon tax with handouts, essentially making it a stealth tax on the 'well off'. Nice, real nice. Yet that is how tax codes work - votes are bought with handouts, certain groups (singles for example) get screwed, but the majority targeted is happy. It is shocking that a perk for non-voting tax payers like LAFHA 457's lasted as long as it has.

For me, as a well paid ex-pat that is single, I'd actually have been in favor of a transition period for people making say under 150K with familes that came in last year and in 2010 before these reforms were announced. This way people were not 'bait and switched' which is what occcured here with familes in particular - it is not easy to just 'move' when you are supporting 4 other people, brought in on a relocation package, and have kids in school under a change that is not giving people time to adapt.

The real lesson here is why middle class familes or those on average incomes should never, ever trust government perks when they budget anything - what the government gives it can take away which is why I personally never budget for anything based on government 'gifts' such as this. Overall a lot of people are being screwed here on short notice, a real shame.
Hmm, looks like you half read my post. I was talking about LAFHA and how it is (or was) designed allowing for people to take advantage of it and stay on it indefinitely without needing to prove a living cost in their home country.
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Old May 11th 2012, 2:39 am   #59
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Default Re: LAFHA - Budget 2012/13

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Originally Posted by knockoff nige View Post
Hmm, looks like you half read my post. I was talking about LAFHA and how it is (or was) designed allowing for people to take advantage of it and stay on it indefinitely without needing to prove a living cost in their home country.
I was making a comment only around the 'if you don't like it, move' point. There are others here making similar comments. My view is just that I am surprised they didn't do a transitional arrangement at least for families earning say up to a certain income (150K, 100K, whatever someone things is not 'excessive' which given what I have seen of the Aussie thought process here is a pretty low number vs what Americans or Brits think is big money) can have another 6 months, a year, maybe two to adjust and/or make plans to move home in a more ordered manner. It isnt easy for people to pull kids out of school etc all while dealing with a 25% or more effective pay cut. At the least you would have thought they might give companies the ability to write off on their taxes the costs of allowing 457's with families to move back home via an emergency relocation package.

For a single guy like me on good pay that has lived around the world, you are right, I can 'move' easy and will entertain offers in other parts of Asia over time. I moved here to experience Australia as much as anything else- but some of these familes that moved prior to the announcement last year have been shafted.
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Old May 11th 2012, 2:56 am   #60
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Default Re: LAFHA - Budget 2012/13

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Originally Posted by rld1177 View Post
I was making a comment only around the 'if you don't like it, move' point. There are others here making similar comments. My view is just that I am surprised they didn't do a transitional arrangement at least for families earning say up to a certain income (150K, 100K, whatever someone things is not 'excessive' which given what I have seen of the Aussie thought process here is a pretty low number vs what Americans or Brits think is big money) can have another 6 months, a year, maybe two to adjust and/or make plans to move home in a more ordered manner. It isnt easy for people to pull kids out of school etc all while dealing with a 25% or more effective pay cut. At the least you would have thought they might give companies the ability to write off on their taxes the costs of allowing 457's with families to move back home via an emergency relocation package.

For a single guy like me on good pay that has lived around the world, you are right, I can 'move' easy and will entertain offers in other parts of Asia over time. I moved here to experience Australia as much as anything else- but some of these familes that moved prior to the announcement last year have been shafted.
I don't disagree with much of what you are saying...but part of the reason that people have been shafted is because of the misuse of a tax provision, an industry springing up around advising on exploiting that tax provision and finally employers using it as a means to reduce their wage bill. The method of misuse is being closed...but the grandfathering for anyone who signed on the dotted line, actually prior to the announcement last year rather than 8th May, would be fair.
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