Has any one been paid this allowance while on a 475 visa? We are hoping to come over imminently but with little hope of selling our place in the U.K. without taking a hugh loss and the bottom falling out of the rental market at the moment, we might have to leave our house empty till the market recovers. Would this allowance be enough to cover the cost of renting in OZ AND still paying a mortgage in U.K.?
Any info appreciated...Jim & Terri

 

We are hoping to get to Queensland on a 475 visa - what is the living away from home allowance? I've not heard of this before....

Paul (39), Cheryl (35), James (18) & Francis (13)
Submitted to AIM by post - 19 Dec 08
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Further info requested by email - 21 Jan 09
Submitted further information via email - 23 Jan 09
AIM acknowledged receipt - 27 Jan 09
Email received from AIM with positive result – 9 Feb 09 (letter dated 4th)
Regional sponsorship form posted to Queensland Government – 9 Feb 09

 

I am currently employed in Qld on a Sub-class 457 visa and currently receive a Living Away From Home Allowance (LAFA). I am no expert on the subject of LAFA but can tell you what I know.

Broadly, it is a concessional tax break that you may qualify for if you have a 457. If you qualify, it will mean that you will pay less tax to the Australian Tax Office (ATO). To qualify you must be able to show (if at any time challenged by the ATO) that (a) you would continue to live at your UK residence but for the requirement to temporarily change locaility for work purposes; and (b) your transfer is temporary. The length of time you can claim the benefit for is also an issue, and it would be unlikley that the ATO would consider you eligible for it after a few years of living in Australia. If you do anything which shows that you have permanently located to Australia i.e. buy property in Australia, get permanent residency etc. you will also cease to qualify.

Most people I know that have moved to Australia on 457s do qualify for LAFA. However, please note that your employer is under no obligation to offer you LAFA (although I cannot see any reason why an employer would refuse if they already have orgainsed a 457 for you). It is no expense to the employer. It is the ATO who lose out becuase you will pay less tax. Basically the way it works is that the amount you pay in rent here in Australia, and an amount for food (food component) are provided to you as a tax free LAFA allowance. For example, If you are paid fortnightly, the amount you pay for 2 weeks rent and the food component added together is deducted from you gross salary for those two weeks and then you pay tax on the reduced balance rather than on the full gross amount.

It means you end up with more money in your pocket at the end of the day with less going to the ATO. It certainly is a great perk to have (and you take home more than your Australian colleagues who do exactly the same job - but don't tell them that!). However, it will not be anywhere near enough to cover even your rent payments here nevermind your mortgage in the UK.

To get it organised, ask you prospective employer about it (who may not know much about it unless they are used to taking on lots of overseas employees) or contact the ATO.

Hope that helps!! Let me know if you have any more questions. Happy to help!

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Thanks for the reply - a great help and very useful info!

 

You only have to apply for residency, to become ineligible for LAFHA.

Definately do not mention it to Australian colleagues, as it isn't the ATO who lose out, it is the Australian taxpayers, who have to pay more tax to effectively subsidise it.

 

living away from home allowance fringe benefit

I am living in Australia since 2006 on a 457 visa, may I eligible to apply for living away from home allowance for previous years.
Thanks

 

I do not know much about the allowance, but you should speak to your employer to see if you are eligable, I believe that it is up to your employer to offer you the allowance and they are under no obligation to do so. But most do.

 

It actually costs the employer nothing for you to have this allowance. They just have to fill out the necessary forms for you.

Love

Rudi
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