bcworld

Your point is moot then because as far as I know no one is saying that 457s cannot claim LAFHA (under the proposed new arrangements)...in fact the changes are seeking to bring the circumstances in which it can be claimed into line with those for PRs and citizens.

You suggested there should be legislation to protect access to LAFHA for 457s for 2 years - under the current arrangement - and I think that would be unpopular - they'd get roasted for it.

bingobob777

It's not intended to be fair, it's just a tax grab from people who can do nothing about it.

The Govt obviously thinks (like all Aussies) that their country is that friggin wonderful that people will come for nothing, try telling any of them that you are going home at the end of your Visa, blinkered the lot of them.

It's a tin pot country run by cretins, the rest of the world throws hundreds of billions of dollars at the current crisis meanwhile Australia risks blowing the opportunity to capitalise on the coal/gas by removing LAFHA and introducing the Carbon Tax so it can balance it's books within two years.

Bermudashorts

Trouble is people don't have to prove that they are maintaining a home elsewhere. In fact I have not once heard of a 457 visa holder that is maintaining an unlet house in their home country. Many don't have a home, or they let it out and a fair proportion even sell up!

Agree it is not aimed for that, but that is what it currently does. The changes are to fix that.

The changes are trying to ensure that the allowance is used as it was intended for all. The focus on 457 holders is probably because they are the largest group of people who (with their employers) are benefiting from a set of rules which do not achieve the intended purpose. For example I am PR and have a house in the UK (which I let most of the time) but I cannot claim LAFHA. Whereas a 457 holder in exactly the same position as I, or even ones without a home in the UK can have it.

I disagree. LAFHA seems to be available for anyone on a 457 who has an employer willing to administer it. They don't have to demonstrate that they maintain another home (unlet) and if BE is a random sample then I would say few do.

Taypayers should not be susbidising the income of temporary residents. If the company needs overseas workers then they should be willing to pay for them.

I also think if people want to come to a country as a temporary resident they have to accept that they are not going to be treated as equals to citizens or permanent residents. It is part of the deal, if they don't like it, don't come. In terms of the financials, they should thrash it out with the employer.

I am a PR and there are some things that I don't get that citizens get, like the vote, but I knew this would be the case and if it was unacceptable to me then I would leave.

Beoz

That's quite an irrational paragraph.

There are plently of Aussies working in the UK on an equivelent skilled migrant visa. I know many and apparently there is some form of LAHFA equivelent available but none of the Aussies I know in the UK know about this tax relief. So they just get on with life, living, working without complaint (only about the weather of course). The US also has an E3 visa where an employer can sponser an Aussie, with very little rights.

You really need to take an objective view of this tax before you wildly throw around unqualified statements

Amazulu

LAFHA is a small issue and in the big scheme of things, irrelevant.

I agree that the carbon tax is a joke and that the return to surplus is a sham, but we had no need to throw 'hundreds of billions' at the current crisis as our banks did not play silly buggers as they did in the UK and the US. I'm not saying that they wouldn't have if the could have but they didn't. Simple.

bingobob777

I will lose LAFHA, so my view is pretty objective.

For the benefit of $700million, the Govt is taking the risk that thousands of foreign workers, obviously needed by Australian industry (hence the sponsorship) won't leave the country. Why don't you ask the Civil Engineering, mining, gas companies etc what would happen to them if all their 457 Visa holders left.

As I've said above, plenty of people are here primarily for the money and with an effective 20k wage cut might just to decide to leave.

Beoz

I think the government can be pretty certain that most workers in the Civil Engineering, mining, gas, sectors will be better off financially in Oz than in the UK right now, even without LAHFA. Or perhaps the government is just suggesting that it is pretty unfair that the taxpayer has to provide a relief for foreign temporary workers. Whatever the reason, if you can get a better paying job, either in Oz or abroad, your company will have to respond to market demands and pay you a higher salary.

paddyo

Am I right in assuming though that, as PR, you can claim a tax offset for any non rent or loss from your UK property from your annual tax assessment?
A 457 can not claim any offset from foreign assets at all....by the same token they do not pay any tax on foreign income which MAY seem like a shoe in but believe me if I could claim tax offset then I would rake it in...I have a great house in UK but a high mortgage and the rent only covers 65% of it.

Beoz

Well Paddyo, if didn't need to pay tax on foreign income, I'd be selling up that great house, buying a 4 bedroom crappy flat it South London and renting it out to a bunch of students raking in a 60 or 70% yeild. I should do it anyway despite having to pay tax.

JEZZ

Paddyo, I have to agree with all your comments. Having done Research into the demise of LAFHA and the associated taxes, costs of living and working in the likes of Sydney as an Expat on a 457 are proving to be a huge deterrent for Employers in Australia to attract the 'key' skilled staff. People who have no dependants are in a better position and will obviously financial better off, but for those who have children no such luck with enforced schooling fees for non - residents. The ATO has just opened a huge can of worms and will ultimately put pressure on Companies to pay the incentive to attract the staff with those KEY skills they will require. The lure of the 'Sunny Culture' will surely starting losing its appeal when people start looking at their bank balances.

Bermudashorts

My mortgage payments are barely covered by rental income and I believe last year with mortgage and maintenance bills I was negative cashflow. However the interest element of the mortgage payment is the only part (of mortgage) that is an allowable expenses. So with UK interest rates being very low at the moment I would be surprised if many preparing their tax return properly (i.e. only deducting the interest not the full mortgage payment) would be in a loss making position for tax purposes.

Sooo end result was paying a substantial amount of additional tax to ATO with respect to my UK rental income. About $1.5k I think. Mr BS about the same. Now if I were on a 457 visa I would be under the threshold for paying tax in UK and would not have to declare in Australia. So I would be much better off.

I would also add, that I have not expressed any opinion about whether I agree that losses on properties should be offset against employment income anyway. I am actually quite capable of considering laws and regulations objectively and not whether I personally benefit or otherwise from them. I find it astonishing that there are so many people that seem to agree that as a policy, taxpayers of their adopted country should be topping up their wages not their employers.

Bermudashorts

There should be deterrents against hiring in temporary workers from overseas. Companies should have to pay the incentive to attract the staff they need.

Hiring overseas workers should be a last resort and if it comes to that the employer needs to weigh up is it worth it or not. If it is profitable for the company to take an overseas worker hen that is what they should do. If it is not profitable for the company to pay for an overseas worker then they are better off without it, the profit of such an investment should not be artificially boosted because the taxpayers are sharing the bill.

paddyo

BS, I must admit I find that statement quite strange. Why should there be a 'deterrent'?
Every country, including the UK, has an immigration policy which meets their need, whether it be a skill shortage in a KEY area or in a Services area. This whole debate is not about the Visa or the paying of Tax is it? Its about the sudden withdrawal of a concession which, irregardless of whether or not it has been applied properly or used correctly, has a massive financial impact on real people and real families who were under the Bona Fide assumption that its a part of their financial stability.
Its the sudden withdrawal and bland generalization statement which accompanied it which has caused the angst and, whether or not you think Temp workers should be here or should be treated differently or not, those who were of modest means and who live by that are now going to lose possibly 15-25% of their net income. Statements like 'well get the employer to absolve it' or 'renegotiate your package or go home' are easy to make when you are not in the rather weak position that current Temp visa holders receiving LAFHA are in.
Yes, 457 holders know its a Temp Visa, yes 457 holders know its only to fulfill a short term key skill requirement, yes it is NOT a short cut pathway to getting PR. This is purely and simply about an enforced change in peoples lives and no amount of simplistic statements of choice can help, because sometimes that choice is neither obvious to the persons affected by this or its not a palatable one.

Amazulu

AS an Australian citizen, based in Australia but working overseas, could I claim LAFHA?

Ian Lindgren

Hi,

Yes you could if your employer was an Australian Company, who had temporarily transferred you to work for them in an overseas location for a limited period and was paying you in Australian dollars.

Regards,

Ian