nwortington

HELP

I am moving to Melbourne on 2nd JUne 2008 to start work on a 457 visa. My company has offered a 40000 LAFHA, as well as a Taxable Salary. I am also going to start for my PR. Does anyone know what will happen to LAFHA once PR is granted. I am thinking that the 40000 will be added to salary, but taxable.

Any suggestions???

@boy

http://www.brainbox.com.au/brainbox/...5?opendocument

The idea behind LAFHA is that it is for those persons who have to live away from their usual residence temporarily as part of an on going contract of employment.

Once you get PR, you lose it is my understanding.

in fact, as soon as you 'show intention' to apply for the PR you lose the visa. You have to notify your employer of this.

The LAFHA is one of the clear benefits of the 457 visa compared to a PR visa.
You can't have it all !

OzziePom

i have dual nationality and still obtain the benefits of LAFHA. I understand its a Living away from home benefit and not related to visa type.

haggis supper

I'm currently 2.5 years into my 4 year 457 visa. I submitted the PR application in December and as soon as I started the process my work were obliged to stop paying me LAFHA.

Be very very careful how you treat the 40,000. Rather than the full 40k it's more likely to be the taxable benefit of 40k. E.g. my company paid me a similar amount but they deducted the 40k from my gross salary, which was then taxed and then they paid me the 40k without being taxed.

Therefore this may not be an additional 40k that your employer pays you.

Moving from 457 + LAFHA to PR without LAFHA has a financial downside, as I'm finding. Run a search on LAFHA as there are a number of threads where this is explained, more clearly than I've done !

Good luck.

Vanessa

As others have said you will lose your LAFHA as soon as you apply for PR - we had to pay back $10,000 last year. LAFHA is not based on visa type but whether you intend to make your chosen state your permanent residence.

I have friends who claim it, who are from interstate and NZ but they have both kept a home in Sydney/Wellington and rent in Melbourne.

Pommy Dan

Hi, i am on my third 457 and will be lodging SPouse Visa application next month.

Have had it made clear to me that the moment my app is lodged, i am no longer able to claim my LAFHA - is gonna cost me about $1k off my net pay each month, but that's the price you pay for being an Aussie!

Play by the rules to ensure you dont get a nasty tax bill.

@boy

Correct...

What is the Living Away From Home Allowance?
Living Away From Home Allowance (LAFHA), as defined by the ATO, is "- an allowance that must be in the nature of compensation to the employee for additional expenses incurred as a consequence of an employee being required to live away from their principle place of residence in order to perform the duties of that employment."

Note the use of the words "ADDITIONAL EXPENSE" and "PRINCIPLE PLACE OF RESIDENCE". These are clear indications of the nature and intention of LAFHA being an allowance for inconveniencing an employee.