iamthecreaturefromuranus

Just coming back to this.... have you ever met anybody who has massively abused the LAFHA system? I certainly haven't been aware of anybody managing to abuse the system. It's already pretty tightly controlled with limits on food and rent allowances.

PunkDebutante

Yes, according to the government it is the companies that employ and use 457 visa holders that have abused the system for years. It was never meant for foreign workers. It was meant for residents of Australia that are working away from their Australian homes to work in other places within Australia (or this is how it was explained to us). We are 175 visa holders but my husband has been claiming LAFHA because his position changed and he no longer lives in the place he originally settled and maintains a home within Australia.

I have seen numerous 457 visa holders who sell up back in the UK and no longer maintain a home there. I remember a few particular posters who also refused to become permanent residents, even though their companies were willing to sponsor them, because they didn't want to lose LAFHA. Those seem like abuses to the system IMHO.

Bermudashorts

I wouldn't use the word abuse, because I am sure that in most cases it has been applied in accordance to the rules. But the rules did not reflect the intention and so steps are being taken to address that.

It was intended as an allowance where people were *Living Away from Home* and by this was supposed to mean that they were maintaining a home in one location but living in another location, so had two sets of living costs.

So I think there are plenty of examples where it was not used as it was intended. I don't recalll many 457 visa holders on BE mentioning that they keep their UK house on and importantly, unlet, whilst they are in Australia.

As far as I can tell, LAFHA has mainly been used so that the employer can pay a lower salary than they would otherwise have to. This was definitely not the intention of LAFHA.

The firming up of the rules will ensure that in futue LAFHA is applied only in accordance with the original intentions.

Bermudashorts

I would say they should take it up with their employer seeing as it was the employer who would have sold LAFHA benefits as part of the deal.

Amazulu

I hear what you are saying but I'm sure it's a non-issue for the government. I guess they make the rules and can change them if they wish.

It is what it is.

Tramps_mate

Surely there can't be many people that took contracts of work soley based on a tax relief that knowing governments could be withdrawn at any time... Oh wait!?

Are there people that couldn't afford to stay if it goes?

iamthecreaturefromuranus

If you're in NSW and have a couple of kids, then it could very easily be a big enough change to make it not worth while being here.

Beoz

Then fine. If an employer sold the job based on this as a benefit, then re-nogotiate, or leave. Either way citizens and temps should be treated equally and that includes school fees. If school fees is an issue then re-negotiate. LAHFA is not intended to suppliment school fees

iamthecreaturefromuranus

When I was on a 457 I would have been all for that. School fees get raised every time in these discussions as the counterbalance to those who seem to think that 457 is a nice scam. Nobody EVER claims that LAFHA is for 'school fees'. It's just an example of the inequalities in the system.

NSW in particular sees 457's families as a 'cash cow'. LAFHA got you some of that back.

paddyo

I don't understand that statement at all...what questions are you asking?
I'm not sure if you are querying the rationale or peoples intelligence here?

paddyo

It would be nice if it was as simple as that. Some people currently in receipt of LAFHA for VALID reasons and who do own/rent homes in Oz and UK and moved over here based on the incentive/proposals put forward by the prospective employer now have a difficult decision to make. After being here for a year or so some families MAY have started to bed in with the community, the schools, the lifestyle and so to 're-negotiate or leave' is difficult.
Lets look at re-negotiate, and I have already started this process, as this is where your employer will show their colours. Far from some peoples perceptions (not facts, just assumptions they have made) the larger companies offer 457 holders comparable salaries with PT and Citizens, not lower salaries and so HAVE to offer LAFHA to make up the difference. LAFHA was an incentive and at no time was there any thought/discussion/inference that it may/would/could be withdrawn, why would it be? As the salary is comparable with your peers then it is difficult to give a significant raise above the window which is set for all of your profession/scale. I actually understand that and accept it. But, the word is difficult not unachievable so there is some room for decision and negotiation but I would expect only a token raise not a massive increase to match what you would get 'Net' if LAFHA was paid.
Then there is the 'leave' option. Wow, massive turmoil when you depart with regrets and almost 'forcibly'. Maybe leaving with no job to go back to, no support network, no guarentee of income. Maybe your home may not be available (if you rented out there are timeframes agreed, etc). It MAY be the best thing ever to happen, new opportunities and new paths to take. But, ultimately, HAVING to leave rather than WANTING to leave is a big difference and is not pleasant for anybody.

bingobob777

Hmm about to raise the subject myself. If they don't come close to matching it I'm going to look to move companies. I'm only 10 months in to a 457 so I would need to find a new employer willing to sponsor me, but I'm not just going to accept a 20k wage cut when the whole point of coming here is to make money.

bcworld

Just to be clear, when you say 'the difference' you're talking about additional expenses you incur because of your temp resident status? Bearing in mind, AFAIK LAFHA is related to accommodation and food expenses only?

Why would it be? Well I suspect the cost to the public purse must've been significantly more than what had been budgeted for. And this attracted the attention of the ATO who I think then tightened up the reporting of LAFHA amounts paid...well before the announcement last year.

I have some friends who moved over in Nov last year and LAFHA was sold to them as a great source of tax free income...they couldn't believe their luck! While it was before the announcement there was definitely some evidence the writing was on the wall by that stage.

As I said I'd be really interested to know what % of LAFHA exemptions are from temporary residents as I think it could shed a lot of light on this.

Bermudashorts

Make up what difference?

I don't know what benefits you assume all PR and citizens are getting that 457 holders are missing out on. However even if there were some, employers don't have to offer LAFHA to make up the difference. If there is some benefit that everyone else is apparently receiving except 457 visa holders, then again, the employer should be bridging the gap. And if that makes the 457 visa holder a less attractive option, then that is good, because companies should be placing local candidates first.

manumani

I had a question regarding LAFHA. I am currently in India, and looking for opportunities in Australia with my current employer. The usual route for my company to send employees to australia is the 457 visa, and their salary package includes a base amount + 'X' amount as LAFHA.

My question is , since I am a PR holder, will I be eligible for the same package (Base + LAFHA), or will the company have to give the entire amount as base salary ?

I currently own and maintain a house in India. I am interested only in the pre-july scenario