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Legal Advice on LAFHA Changes

Legal Advice on LAFHA Changes

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Old Dec 11th 2012, 3:06 am
  #16  
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by paddyo
Not in my company. My salary was the same as my peers as it is a defined wage structure.
You keep on about the 'get your employer to pay you fair wages' statements when really that is not the issue. Its not the wage that is the issue, its the LAFHA and its cessation and transition arrangements. Some 'fools who don't understand tax and benefits' (your previous words not mine) such as myself who thought that this was a long standing taxation benefit came to Australia on a Temp Visa knowing the situation. Changing that situation and the way it was both decided and implemented were the issues and created a lot of angst.
Several times the arguments of 'well if you can't afford it then go home' or 'well you was only using it to get PR anyway' are just ill informed, rude and personal attacks with no factual justification. If someone is provided with a criteria on which to make a decision which affects their career, family and home then they are entitled to be aggrieved and upset when that changes outside of their control. It is not a company issue, its a policy change issue.
Those who were not 457 Visa holders, had LAFHA can not possibly understand the sudden change this FORCED on people. All I hear is 'well you were lucky to get it, I didn't have it so glad its gone' comments. Oh, and don't get me started on the ignorant 'you don't pay full taxes anyway' rubbish.
I understand what you say but as a previous 457 holder I think all you guys are angry at the wrong people. The government and ATO always reserved a right to withdraw the LAFHA at any time. You guys should be taking this up with your employers if they gave you the false impression LAFHA was a certaintly and ongoing, particularly if it was a factor in taking the job in the first place. My company made it very clear it was at theirs/the ATO's discretion and could be withdrawn at any time. It was never part of a pay package, it was a bonus on top. This was 5 years ago now, long before any changes were announced.
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Old Dec 11th 2012, 11:10 pm
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by jimbo_d
I understand what you say but as a previous 457 holder I think all you guys are angry at the wrong people. The government and ATO always reserved a right to withdraw the LAFHA at any time. You guys should be taking this up with your employers if they gave you the false impression LAFHA was a certaintly and ongoing, particularly if it was a factor in taking the job in the first place. My company made it very clear it was at theirs/the ATO's discretion and could be withdrawn at any time. It was never part of a pay package, it was a bonus on top. This was 5 years ago now, long before any changes were announced.
No, my company never gave any such undertaking. They did state that LAFHA was available but I was never aware that changes in taxation could be made so sweepingly and without proper consultation.
As I have tried, probably poorly, to explain, I do kind of understand the change in LAFHA and I have no doubt it was being misused by some. But not by all and it should have been a different tactic used to amend it rather than a sweeping change with little notice but which had far reaching consequences. The NSW government have recently done the same with Workcover and I am amazed at how all this stuff is gotten away with. Blanket changes with no or little notice and people just go 'oh well'.
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Old Dec 12th 2012, 2:01 am
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by paddyo
No, my company never gave any such undertaking. They did state that LAFHA was available but I was never aware that changes in taxation could be made so sweepingly and without proper consultation.
As I have tried, probably poorly, to explain, I do kind of understand the change in LAFHA and I have no doubt it was being misused by some. But not by all and it should have been a different tactic used to amend it rather than a sweeping change with little notice but which had far reaching consequences. The NSW government have recently done the same with Workcover and I am amazed at how all this stuff is gotten away with. Blanket changes with no or little notice and people just go 'oh well'.
Paddyo ..... How much notice would have you liked? From memory the discussion on this forum about it ceasing was going on for about 6 months to a year. Would you have liked 2 years notice, 3 years notice? The line has to be drawn somewhere.

In addition some would argue that you were actually abusing the intended purpose of LAHFA. If memory serves me correct, you have a property back home, but you rented it out, on top of receiving LAHFA. Yes I know the rent didn't cover the mortgage but you weren't leaving it idle, waiting on your return from a "temporary" stint in Australia. And if I'm not mistaken you've now gone PR since the removal off LAHFA, demonstrating your intention to remain permantly in Australia.

Perhaps I'm misunderstanding what you are trying to say but it does appear like a "cake and eat it" scenario
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Old Dec 12th 2012, 3:37 am
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by Beoz
Paddyo ..... How much notice would have you liked? From memory the discussion on this forum about it ceasing was going on for about 6 months to a year. Would you have liked 2 years notice, 3 years notice? The line has to be drawn somewhere.

In addition some would argue that you were actually abusing the intended purpose of LAHFA. If memory serves me correct, you have a property back home, but you rented it out, on top of receiving LAHFA. Yes I know the rent didn't cover the mortgage but you weren't leaving it idle, waiting on your return from a "temporary" stint in Australia. And if I'm not mistaken you've now gone PR since the removal off LAHFA, demonstrating your intention to remain permantly in Australia.

Perhaps I'm misunderstanding what you are trying to say but it does appear like a "cake and eat it" scenario
lol.....well actually my INTENT was to do 3 years 457 and then return to UK. It always was until my company asked me to stay longer and thus I extended my 457. Then, with the loss of LAFHA in May and changes in rules of applicability on 1 July for old farts like me over 50 I made the decision in May this year to go PR. It was a quick decision and the process took only 8 weeks, however, the only benefit is I no longer pay school fees and I can come and go alright but we can still go back to UK if we wish. I am constantly analysing our situation and decisions will be made as and when required.
I agree to some extent about the LAFHA and my rental, but similar rules have existed in the UK and during my time in the Armed Forces. I was certainly not making any money out of LAFHA and in MY mind it was not just compensating me for the loss of rental but also for the loss of my wife's own home child care business. In MY mind LAFHA although managed around Food and Rental was balancing me for the inconvenience of Living Away From Home. We all have personal factors to take into account.
It was certainly not greed motivating me, just wanting to have parity with my previous circumstances.
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Old Dec 13th 2012, 10:10 pm
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by paddyo
lol.....well actually my INTENT was to do 3 years 457 and then return to UK. It always was until my company asked me to stay longer and thus I extended my 457. Then, with the loss of LAFHA in May and changes in rules of applicability on 1 July for old farts like me over 50 I made the decision in May this year to go PR. It was a quick decision and the process took only 8 weeks, however, the only benefit is I no longer pay school fees and I can come and go alright but we can still go back to UK if we wish. I am constantly analysing our situation and decisions will be made as and when required.
I agree to some extent about the LAFHA and my rental, but similar rules have existed in the UK and during my time in the Armed Forces. I was certainly not making any money out of LAFHA and in MY mind it was not just compensating me for the loss of rental but also for the loss of my wife's own home child care business. In MY mind LAFHA although managed around Food and Rental was balancing me for the inconvenience of Living Away From Home. We all have personal factors to take into account.
It was certainly not greed motivating me, just wanting to have parity with my previous circumstances.
Well they don't appear to have individuals rules to suit individual circumstances. Whether you were making money or not (care of the tax payer) plenty of businesses could have quite easily stepped in, which many are now having to do, and pay their staff the difference. Before my tax dollars were doing that.

Out of interest, now that you are PR, can you negatively gear the loss you are making on your property in the UK?
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Old Dec 14th 2012, 1:38 pm
  #21  
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by paddyo
lI was certainly not making any money out of LAFHA and in MY mind it was not just compensating me for the loss of rental but also for the loss of my wife's own home child care business.
Why did/do you think it would compensate you for your wife's business? Did you and your wife not choose to come out on a Temp visa aware of possible consequences?
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Old Dec 14th 2012, 3:31 pm
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Default Re: Legal Advice on LAFHA Changes

**** me
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Old Dec 14th 2012, 3:32 pm
  #23  
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by Tr1boy
**** me
Do you charge and is it tax deductible?
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Old Dec 14th 2012, 3:38 pm
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by Pollyana
Do you charge and is it tax deductible?
Only if it's done away from my home
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Old Dec 14th 2012, 6:22 pm
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by Tr1boy
Only if it's done away from my home
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Old Dec 14th 2012, 9:20 pm
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by Beoz
Well they don't appear to have individuals rules to suit individual circumstances. Whether you were making money or not (care of the tax payer) plenty of businesses could have quite easily stepped in, which many are now having to do, and pay their staff the difference. Before my tax dollars were doing that.

Out of interest, now that you are PR, can you negatively gear the loss you are making on your property in the UK?
No as its a repayment mortgage and you can only do so on your mortgage interest. But hey ho, we made the decision knowing all the circumstances.
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Old Dec 14th 2012, 9:23 pm
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by moneypenny20
Why did/do you think it would compensate you for your wife's business? Did you and your wife not choose to come out on a Temp visa aware of possible consequences?
NO, I should explain that I know exactly what LAFHA was for but, what I was trying to say, was I used the LAFHA figure to compensate... we looked at all the finances of staying/going and when they all added up (wage plus LAFHA) then thats how we based our decision. As I said, I did not realise it could be taken away, thats not the companys fault.
Losing LAFHA was not a consequence I considered, it never occurred to me that it could just be stopped.
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Old Dec 14th 2012, 11:00 pm
  #28  
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Default Re: Legal Advice on LAFHA Changes

Originally Posted by paddyo
No as its a repayment mortgage and you can only do so on your mortgage interest. But hey ho, we made the decision knowing all the circumstances.
If the interest part of your repayment and your bills/charges are more than your earnings you will be negatively geared.

I am very positively geared so can claim v little cost against rental income. With 20/20 I'd have remortgaged prior to coming here to release equity and increase the interest proportion of my mortgage but didn't have a crystal ball
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