Proposed changes to LAFHA legislation

By: Oncore Services  05-Apr-2012

Submissions are due to close shortly regarding the proposed changes to LAFHA legislation announced November last year by the Australian Government.

The proposed changes to the Living Away From Home Allowance were announced as part of the Government's Mid-Year Economic and Fiscal Outlook (MYEFO 2011-12) and if they go ahead, will likely have the biggest impact on 457 visa holders.

A consultation paper was released last year by the Hon Bill Shorten MP, Assistant Treasurer and Minister for Finance. The consultation paper outlines the existing treatment of the living away from home benefits and implementation issues of the reform, including whether there is a need for special transitional arrangements to ensure there are no unintended consequences with the new arrangements. Submissions close on 3 February.

At this time, two key points have been flagged as potential changes:

  1. Requiring individuals to substantiate their actual expenditure on accommodation, and substantiate food beyond a statutory amount;
  2. Limiting access to the tax concession for temporary residents to those who maintain a home for their own use in Australia that they are living away from, for the purpose of work.

This second point is relevant to temporary residents and concerns their eligibility to receive the allowance. Final details are to be communicated further by the Government. At this point the allowance in its current form is valid until the 30th of June 2012 (subject to change based on updated information from the Australian Government) and if approved, changes will take effect from 1 July 2012.

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