British Expats - LAFHA and Super

British Expats (https://britishexpats.com/forum/)

- Australia (https://britishexpats.com/forum/australia-54/)

- - LAFHA and Super (https://britishexpats.com/forum/australia-54/lafha-super-722225/)

Re: LAFHA and Super

Quote:

Originally Posted by desperately (Post 9855607)

As has been mentioned - your company do noy pay you LAFHA; it is not a payment made them, it is a tax break for those eligible to receive it.

Because you have accepted LAFHA, your base salary is reduced by the LAFHA amount thus reducing your salary for taxation purposes. Because of this your super payments are still only made on your salary for taxation purposes, and will be reduced.

You cant have your cake and eat it lol.

If your employer thinks they are paying you with this LAFHA then it sounds like they dont fully understand what it is.

Sorry, I think you are wrong there. LAFHA is a tax relief, its not a payment or salary top up by your company.
Mininum Super is 9% of your salary and for tax purposes LAFHA is included in this. Initially my company only paid my Super based on my salary post LAFHA but then after I queried it and they in turn sought advice from the ATO they had to increase my Super to my total salary.
If I can find it there is a link on the ATO website which explains it.

But, for the OP none of this really matters as contractually the Employer has to pay the mininum amount agreed between them. Either way, they OP needs to contact their HR and resolve this.

Re: LAFHA and Super

Quote:

Originally Posted by Bermudashorts (Post 9856002)

:blink: My post might not be what you want to read, but I don't see how it wasn't constructive. You cannot *claim* LAFHA. Your employer has to choose to administer it and if they don't then it's too bad.

Thats correct, an employer does NOT have to administer LAFHA. Its a voluntary Tax concession not a right.
I also think the Lynne needs to improve her BE etiquette, not a great start as a newbie!

Re: LAFHA and Super

Quote:

Originally Posted by Tramps_mate (Post 9856793)

Do you have to disclose that?

The only requirement that you have to provide when claiming LAFHA is the Address of your Permanent Residence in another country/state.
Whether you rent out or not is of no consequence to your eligibility of LAFHA.

Re: LAFHA and Super

Quote:

Originally Posted by ennyl (Post 9854665)

hi ian,
could you advise, just moved from uk to canberra on 457 visa, I enquired about lafha with my australian employees before i left the uk but they new nothing about it (health authority). Could you give advise me if i am entitled to it (i have a home in the uk which i am renting) and if so how I go about claiming it,
thanks

Hi Ennyl,

I'll just repost my original post on LAFHA and super, to correct it and then answer your question and correct some of the other posts.

Corrected Post

If you were not receiving LAFHA, and say your base salary was $100,000, then your super would be a minimum of $9000/year; some employers pay more than this, ie more than 9%.

If you are receiving at total of $20,000 LAFHA each year, then your employer is permitted to calculate superannuation in two ways:

Leave you base salary as $100,000, and of that pay you a tax free $20,00 LAFHA payment which is the way the FBT act describes it and therefore you receive super based on $100,000, or
That could consider your base salary to be $80,000 and super is then based on 9% of that amount.

Most government Departments do the former because they know what a tax free allowance is, and most private companies do the latter because they do not know what at tax free allowance is.

Now to answer your question.

The Department of Health and Aging do pay LAFHA, as does every other Government department. It would appear that you asked a person who knows nothing about it that's all. They will have their own guidelines and interpretations.

You are never entitled to LAFHA, you may only be eligible or not eligible. If you are eligible, it is totally up to your employer as to if they administer and pay you LAFHA. The first thing they have to do in know about it, which many do not. Once they feel that they might pay it, you then are assessed for LAFHA to determine your eligibility, and then you "claim" LAFHA.

Claiming LAFHA is just a fancy term for being paid it each week after your employer has agreed to pay it, or for those who are lucky enough to be able to be paid "other LAFHA items" such as school fees, storage costs back home and so on, you submit your receipts and "claim" LAFHA on those receipts on top of your food and accommodation. Hence the term claim.

I have attached an employer's brief on LAFHA. You should discuss this with your employer. Then go from there. Whatever the case, it is almost likely that you will lose it on 30 June, if the government makes the changes to LAFHA it proposes. The brief tells you why. However, increasing your cash in hand by around $200 per week on average until 30 June is better than nothing.

LAFHA is not tax relief. It's an allowance to assist you with the requirement to live away from home temporarily as a requirement of your employment. Having a house in another country and leaving it vacant or renting it, is just one of the many LAFHA eligibility considerations, and certainly not one of the two key ones. You do not have to have a house back home to claim LAFHA under the current legislation. You do not have to advise any Australian authority that you are renting it if you are. I can't comment on the UK authorities.

Regards,

ian

Re: LAFHA and Super

hi Ian,

Great post helped a lot to understand the way lafha works. I will show the information to my employers.

thanks

ennyl