Beoz

Simply put ..... $170K is a fine salary for Melbourne.

I've never done the Denver to Melbourne transfer but I did go through all these questions in a London to Sydney tranfer. In the end I opted for a 2.4 exchange on my salary between London and Sydney without LAHFA. I certainly live well in Sydney on that (Sydney being more expensive than Melbourne) and at the end of every month I save a bucket load more cash than I did in London.

Costs are costs and they are what they are and it can do your head in to analysis every little bit. I find the most simplistic way to work it out is to work out what your costs in Denver are, work out what you have left over at the end of the month and try, as best as you can to do the same for Melbourne.

At the end of the day you will spend what you want to spend and it's the left overs that count.

Ignore LAHFA completely. Your employers should not being for one single second try and factor this into your salary. It's not their money to factor in. It's your own tax break.

Bermudashorts

I was wondering if you were in the same field as me, accountancy, so you are not but we have some things in common I think. I have always worked in big financial services players including banking, insurance and asset management. I used to have the perception that banking paid more than insurance but I don't really see that anymore (in my line of work anyway).

I know titles can mean different things in different places but I am a "head of" here and I have seen similar roles in different corporations also called "head of" roles. So if you are reporting to a "head of" then I think that you could have some room for negotiation but it doesn't seem like a bad offer. It is not comparable with what you were on in London but then you were the "head of" there so naturally this is less. In summary, I think your gut feel is spot on.

I think the better work / life balance think is a myth. I don't think I have ever worked harder than I do now. Sydney streets are packed by 7am in the city and the roads are clogged shortly after 6am on the way in. Many people are working long hours here. There are some people in my company that are 9 to 5 -ers but they are the ones who are not doing very well in their career and are unlikely to.

You have mentioned elsewhere that you want an international career, as such maybe you can try and better your offer, but if you are not able to then as several of us have said, this will provide you with a very good standard of living.

desperately

to me LAFHA is no worse than the negative gearing everyone does over here for their 'investment properties'.

it just appears that those who are unable to claim it are extremely bitter against those that can.

Bermudashorts

There are many breaks and benefits that I cannot "claim". I consider myself fortunate that I don't need to claim anything and am equally thankful that I live in a country which provides health, education and a safety net for people that do need to claim.

However I do not believe that corporates should be able to use tax breaks to make up an acceptable salary for the employee. The employer should be bearing this cost.

Have no idea (or interest) what investment property rule you are referring to, but indeed perhaps that is also a bad idea. It is possible for there to be two bad ideas.

desperately

I agree - relying on LAFHA is like relying on OT to make your wage up and get a mortgage.....

dont rely on it and ensure your basic is as you would like.

I know loads of 'immigrants' who will loose this allowance and it will hit them hard. yes it is a taxbreak, but it also means that the company they work for saves money, and they dont pay as much super. and lets be honest, its not just immigrants that 'claim' it - its available to anyone who has to work away from home, but the rule change means you have to own property in oz to benefit from it.

in my experience practically every australian has the dream of owning if not one, but as many investment properties as they can. they negatively gear their tax so they end up paying virtually nothing on the mortgage once they do their tax claim.

for me its probably one of the main reasons so many rental properties are the state they are; the owner cant afford the maintenance as money is that tight until the tax claim is filed. never mind that theyre supposed to be doing the property up to claim as that rarely happens.

and this little 'loop hole' is acceptable as they can claim it; yet LAFHA is a dirty word?

edit - i dont get LAFHA.

rld1177

Thanks, your view on the offer is really useful. I'd noticed the 'head of' job around 220K so I figured the 170k felt about right. In London risk tended to pay similar to accounting (a bit more on the IT side, but in line with say IT audit more or less) My take was maybe it is 10K or 15K lower then I could have pushed for but that isnt going to materially change my lifestyle. It you were to have told me 220k or so was fair I would be more concerned as I sign on the written next week.

I am frankly more focused on the long term - getting raises, promotions, that sort of thing. I guess on a temp Visa a firm knows you are locked in to them without a lot of effort to move - I was on a perm visa in London (still have one actually) and I think being able to move jobs gave you more leverage re salary, I knew people locked in to the firm that didnt do as well on pay and I'd guess Oz woud be the same (and relocation and work permits are not free for a firm so I'd guess that is considered in your year one of salary). I am hoping firms give decent raises on year two given those costs were one off costs not an issue in year two but that remains to be seen.

Thanks again for the tips!

mordechaivanunu

Hi
Wonder if anyone can answer this question for me?
I have been offered a job in WA for Chevron on the Gorgon Project I currently live in QLD on a permanent residency visa.
I was wondering if I will be eligible for the LAFHA?
My wife and three kids will be staying in our home (bought) in QLD
I will commute back home once a month (all cost incurred by me)
I will be renting whilst in Perth (payed by me)

Thanks for your assistance

moneypenny20

LAFHA is being phased out. You won't be getting it. Can you renegotiate your salary to take the 'loss' into account?

Threads merged.

Bermudashorts

Mmm don't know about that one. This might be the circumstances where it is allowed, i.e. genuinely maintaining two homes.

Still with all the uncertainty, I would still be looking to negotiate. Or move the whole family of course.

moneypenny20

Ok apologies if I'm wrong, I'm not completely up to date on it, I never had it so haven't followed the info in detail.

iamthecreaturefromuranus

I'm with you on this one. I think LAFHA, in this case, would still be claimable as this looks like a case of what it was originally intended to support.

desperately

the new rules state that you have to own a property within australia to be eligible - it looks like you do so there should be no qualms in you receiving it.

Ian Lindgren

Hi All,
Just wanted to put some clarity into what the government intends to do with LAFHA for you. Plus, authoritatively answer Mordechaivanunu’s question. Let’s help Mordechaivanunu first!

Mordechaivanunu

It is very likely that you will be eligible for LAFHA, both now and after 30 June 2012. The major change that you will see/feel is that after 30 June 2012 you will have to substantiate all accommodation and food expenses that relate to LAFHA in order for those payments to be tax free. So there will be a paperwork overhead that does not exist at the moment, but considering the benefits, it will be worth it. Until the rules change it appears that you would be eligible for your rent in Perth, food at $191 per week, so at a wild guess, I would say that you would increase your cash in hand by something like $300-$350 per week. In order for that to be authoritative, someone will need to assess you, and then your employer will need to pay it. Search on my name in the forums and you will see plenty of my posts that talk about what can be claimed at the moment. After 30 June, provided you are assessed as eligible, you will just need to substantiate all to get the same.

Everyone Else

Yes, the Commonwealth Government has indicated that it intends to change LAFHA qualifying criteria to be effective on 1 July 20112. So LAFHA will not be done away with, it’s just that the eligibility criteria change….significantly. Is it under threat as it is currently received by foreign citizens? Yes, very unfortunately. My personal opinion is that in their haste to balance the budget the Government has forgotten that there is a skills shortage, and I firmly believe that the Government’s “rationale” for making the changes is flawed and emotive because they say it is being rorted (which it is by some people but not the majority) and imply that most people who receive it are “fat cat” foreign workers on $1m salary. We’ve never assessed anyone on more than $280,000, and 99% are on around $60,000 to $80,000. I think it’s a bad move and what they save in one area, they will lose in another because labour costs will increase and many skilled workers will not see Australia as an attractive place to work. Should the government provide a form of subsidy to the people we need to attract to this country so it can run….umm yes, just like it uses subsidies to attract foreign companies, and at the other extreme pay mothers for having babies. Enough of my opinion because it counts for nought!

The changes are not signed into law as yet, so if anyone has clout with industry groups who can lobby the government, now is the time to do it. I have attached the Government Discussion paper for you to read, however unless what they propose is changed most foreign citizens will lose LAFHA on 30 June 2012 other than fly in/fly out workers who maintain two properties in Australia.



It appears that to be eligible after 30 June 2012 you will need to:

• Move to Australia and rent or purchase a property in Australia (under the new proposal this is referred to as maintaining a property),
• Then be required by your employer to move temporarily for work purposes to another location and rent at your new temporary location,
• While at the same time keeping your original property and not subletting it to anyone (this again under the new proposal this is referred to as maintaining a property).
• LAFHA will be paid as taxable income and for it to be paid in an untaxed way (as it is now by your employer) you will need to substantiate your rental and food costs.
• You will need to intend to return to your original Australian property at the end of the temporary time away from that property and it is likely that this will be enforced/regulated.

Having previously owned or rented a property in a foreign country will have no bearing on LAFHA, neither will an intent to return to the foreign country.

That’s about all the high level detail that is available at the moment because the attached document is a high level document. I’ll be keeping everyone posted as new advice come to light.

It is bad news, but the good news is that LAFHA, as it is, will remain until 30 June 2012, so your if you employer has assessed you as eligible for LAFHA, they can pay it until 30 June 2012. If you have not been assessed as eligible, then the sooner you can receive it before it goes in its current form the better because after 30 June, most foreign nationals will lose it.

Regards,

Ian

moneypenny20

Thanks for that Ian.

towers

Thanks Ian, have you heard anything about the "rumour" going around that they will stop new LAFHA applications from July 2012 but may extend the LAFHA scheme for another 12 months for those already on it?

My own two cents is that giving expats 6 months notice that our take home pay will be reduced by 20% is a little brutal - an amnesty would mean we could be better prepared for the hit.