manumani

Thanks Ian. That was a very comprehensive reply. I understand now that I will not be eligible for LAFHA, which is OK.

Just a question, how much more taxes will I have to pay if I were getting say around 30K LAFHA, v/s now getting the entire amount as salary.

Ian Lindgren

Hi Manumani,

It’s an absolute pleasure to help; it’s the only reason I write on these forums.

The best approach to identify it exactly by going to the ATO Tax calculator at http://www.ato.gov.au/scripts/taxcal...dard_hire.aspx and just go down to Miscellaneous and:

• Change the payee received payments…to weekly, fortnightly or monthly.
  
• Insert your gross pay for that period say $60,000 and don’t include super
  
• Then press calculate
  
• Identify your tax and net pay then go back to the original page and insert $90,000 and calculate.

You will then see the increase in tax and the difference in cash in hand.

Regards,

Ian

manumani

Thanks Ian, I will check this out.

RobG_NSW

Hi Everyone,

Just to add my thoughts, I've been working in NSW non a 457 for almost a year, claiming LAFHA (approx $800 difference a month)
Now the limitations to my 457 Visa cost me the following:
HCF Private Health cover is $278 a month as appose to to $72 a month if your a PR or Citizen
NSW School fee's are applicable for 457 holders and not for PR/Citizen's

Now I don't mind losing LAFHA, but it is unfair that a 457 visa holder should be subject to basic higher costs for things like health insurance and school fees? I know a lot of people use LAFHA on a 457 to off set the additional costs, especially those with families.
My Answer.. I'm lucky as my employer has agreed to sponsor me for PR but for a lot of people who lose LAFHA, it may end up costing them more just because of the other item's 457 holders get screwed on.

I don't mind if LAFHA goes for temporary residents, but if it does "to bring them more in line with PR" then school fee's, health costs should also be brought in line.


Thoughts????

PunkDebutante

We are on a PR visa and our HCF insurance is $273.50 a month. Why would someone on a 457 be paying more than a PR for private health? I agree that the school fees issue is wrong.

Swerv-o

I understand [though am happy to be corrected] that 457 health cover is all inclusive with no gap fees.


S

RobG_NSW

My other half is an Australian Citizen and her HCF is around the $80 a month mark, same as some of my colleagues who use HCF and Medibank

When we looked into adding me onto her policy we were told that because I'm on a 457, I wasn't eligible for normal policies and had to go onto a overseas's visitor policy:
http://www.hcf.com.au/healthinsuranc...-health-cover/

which for the less benefits than what the Miss's get's would cost me in excess of $280 a month, needless to say I left it

457 still get Medicare Reciprocal Cover for emergencies only



Rob

RobG_NSW

@Punk..

Not sure why your's is so high... average is $90 per person per month

http://www.hcf.com.au/healthinsurance/packages/

I can understand $280 for a family.. my point is that was my quote for a single person

Cheers

Beoz

Don't know about the health thing (my employers pay for 457 private health care) but school fees in NSW is unfair for 457's who actually pay tax.

Firstly the federal government has no juristriction over state based school fees issued by the NSW government. Secondly not everyone on 457's have kids. I know about 20, 457 LAHFA receipients and none have children. I'm sure those who mix in family orientated 457 circles have different proportions. Thirdly LAHFA is not designed to offset a school fees imposed by 1 state to a group of 457 receipients that have kids.

You should really be propositioning the NSW state government against this and I wouldn't be using LAHFA as an argument. Furthermore proposition your employers to cover school fees.

bcworld

Exactly!

To me 457s are the expats in the truest sense of the word...at least I generally think of expats as people who are posted somewhere for a finite period of time. In the vast majority of those kind of situations the employer meets costs associated with living in the temporary location.

The problem with the 457 visa is that it isn't always though of as temp, it's a pathway to PR. People don't look at it the same way as comparable situations elsewhere.

Beoz

I guess that could be said for some 457 holders, but probably not all. Either way a company should meet these costs. Not me as a taxpayer.

I can see how it can be used to cover the cost of rent if someone is needs to pay for a mortgage for their "home" without renting it out, but what I don't understand is the food component - I mean, you have to eat no matter where you are.

PunkDebutante

That makes perfect sense.

RobG_NSW

I think your missing my point,

I'm quiet happy to lose LAFHA. but there is a bigger picture to this
But the government's case to cancel LAFHA for 457 argument is based on putting temporary residents on more a level playing field with permanent residents, which currently with all the other limitations a 457 visa gives isnt fair.

Also the food component dosent make sense, why should an Australian resident working interstate claim tax benefits for eating?

Also..
I'm aware of people who own one property in one state, live in another, rent their property out in the home state thus claim LAFHA but then also claim tax back on the mortgage they are paying in the home state as the mortgage is on a rental mortgage so how does that work?

I'm not saying that canceling it for temporary residents is a bad thing, but there is a much larger picture than this.

My personal ethos on this is LAFHA is a nice incentive to bring a worker to Australia on a 457 to fill a position which cannot be filled else where, If they decide to stay (like myself) they will transition to PR and lose LAFHA anyway. There will always be people who abuse the system, same as my previous example of interstate workers renting out property in one state working in another and claiming tax on their tax return's for the "rental property" whilst also claiming LAFHA.
Rather than get rid of it permanently for temporary residents just limit it to 2 years?

Or ensure that 457 holders get the same financial entitlements as PR residents, after all, were all paying the same tax.

bcworld

Do you think the government legislating to offer foreign temporary residents tax free income would be a popular decision?

RobG_NSW

Hold on,

LAFHA is an Tax entitlement has been available to anyone who can prove they maintain a home elsewhere and has been around for years.

It not aimed at giving temporary residents tax free income.

The same as a NZ citizen working in Aus can claim LAFHA, a Brit on a 457 could claim LAFHA, an Australian citizen who own's a property in NSW but work's in VIC can claim LAFHA.

My point is saying people on a 457 cannot claim it dosen't make any sense, apart from a quick win?

What about the genuine people who work in Aus but maintain property in another country, the same as an engineer who lives in NSW but works in NT?

The government is not giving temporary residents more benefits to anyone else who can prove they live away from their home, which is what the whole thing is designed to do?

I'm not saying the government legislate to offer foreign temporary residents tax free income, it something that as an allowance has been around for years, I just don't see the logic in cancelling it for temporary residents?