Rent is more than LAFHA - can it be claimed?
 

Hi,

I have been in australia for over two years on a work permit and am entitled to a tax free LAFHA amount. However - the LAFHA component of my salary does not seem to be 'reasonable' considering that I stay in Melbourne.

Our company just doesnt wish to change the LAFHA to a more 'reasonable' amount i.e. to Melbourne standard. In such times who can support a family in fully furnished apt in Melbourne for $1300 a month ($280pw)?

If the expenditure on Rent has exceeded the LAFHA by atleast 40% over the last two years (and I have all the receipts if needed) - can this extra amount spent on Rent be claimed to reduce the taxable income in this years tax return?

Would appreciate all your help.

Regards,
Tycsee

Re: Rent is more than LAFHA - can it be claimed?
 

In a word, no. It's up to the company how much to give you, and what the deem reasonable. $280 is all I get too for what it's worth.

Re: Rent is more than LAFHA - can it be claimed?
 

Well I would find that just fine as a benefit. Why do you think other people should pay your living expenses. Whiner :rolleyes:

Re: Rent is more than LAFHA - can it be claimed?
 

Sorry but complaining about the LAFHA amount is like complaining that your employer does not pay you enough.

You have two choices: accept it, or reject it (and the sponsorship).
LAFHA is a tax free perk so is worth considerably more than $1300 if you are paying higher rate of tax.

Re: Rent is more than LAFHA - can it be claimed?
 

Why do you need to rent furnished? It would be a lot cheaper to rent an unfurnished place and either buy second hand furniture or buy things cheaply. How long are you planning on staying?

Re: Rent is more than LAFHA - can it be claimed?
 

I think it is what is deemed "reasonable" by the ATO, not the employer.

So if you are a couple in a 5 bed house at $1,000 a week, it may not be considered reasonable.

But if you are a family of 5 in a 2 bed apartment at $250 a week, then I would think you have an arguement that if you were to move to a house with 4 bedrooms for $800 a week that it would be "reasonable"...

At the end of the day, the employer needs to justify the costs allocated to LAFHA to the ATO if requested. Ifyou can demonstrate that you are in a reasonalbe size house for your family (and not necessarily one in the "best" suburb by the way!) then the employer should not be resisting it.