9 replies to this topic

[15 years out of RSA]

Just got this from my, very reputable, tax consultants

Fits in with the recent announcement that Swan made about tightening up on LAFHA

SIGNIFICANT DATA MATCHING
AUDIT OF EXPATRIATES TO AUSTRALIA ANNOUNCED BY THE AUSTRALIAN COMMISSIONER OF TAXATION

The Australian Commissioner of Taxation has announced that the Australian Tax Office (ATO) will request and collect names, addresses and other details from
the Department of Immigration and Citizenship (DIAC) of those who have applied for specified temporary visa subclasses in the period from 1 July 2008 to 31 March
2011, inclusive.

These records will be electronically matched and analysed by the ATO’s data matching department to identify potential refund fraud and other non-compliance with
tax lodgement and payment obligations.

[Short&Tall]

Saw the other day that they are also going to be stopping LAFHA for some visa types - including the temp visas taht are currently able to apply for it I think.

Maybe the above it partly to see who is getting it to warn them it is going to be stopping soon as well?

[SANZOZ]

Just wanted to mention that my husband's tax is going through this audit thing and has taken about 3 months so far. We have rung them and they say if we have heard nothing by 14 Feb then we should ring them again. Does this mean we may not get back what we were told or is it just a formality?

[Riekie]

It's about time they audit and overhaul the LAFHA system - it's been rorted for years! In my opinion they should do away with it altogether. I know people on Citizenship, still getting paid through labour hire companies and still getting LAFHA - and I'm paying for that with my hard earned tax money! Get rid of the freeloaders!

[AndreaL]

Riekie, on 01 February 2012 - 12:44 PM, said:

It's about time they audit and overhaul the LAFHA system - it's been rorted for years! In my opinion they should do away with it altogether. I know people on Citizenship, still getting paid through labour hire companies and still getting LAFHA - and I'm paying for that with my hard earned tax money! Get rid of the freeloaders!

I couldn't agree with you more Riekie.... I know of lots of people who continued to claim it whilst running a p.r. application..........bugs me too that people would screw over the system whilst fully intending to apply for p.r. and not return to their usual place of residence....

Quote

The payment of a living-away-from-home allowance (LAFHA) is a LAFHA fringe benefit.

For fringe benefits tax (FBT) purposes, a LAFHA is an allowance you (the employer) pay to an employee to compensate for additional expenses incurred and any disadvantages suffered because the employee is required to live away from their usual place of residence in order to perform their employment-related duties.

Employees who move to a new locality with an intention to return to their old locality at the end of the appointment would generally be treated as living away from their usual place of residence.

[SANZOZ]

I can assure you that we are not trying to "screw over the system" by getting LAFHA even though we would definitely like to apply for PR in the near future. The sad thing is we were given it in the beginning and now we are totally dependent on it. We don't get anything that people with PR get, we don't get Medicare or Centrelink benefits. I understand completely being annoyed with those that are doing something illegal but why get annoyed with those that get LAFHA while on a 457, regardless of their future intentions??

[Riekie]

LAFHA = Living Away From Home Allowance. If you sell up your life, pack your worldly possessions in a container and buy a one-way ticket to Australia, you're not living away from home.

This tax allowance was intended for temporary workers who would live in Australia for a work contract with the intention to return home (aka their country of residence) on completion of the contract. It has now become a 4 year crutch for immigrants who have no intention to ever go back to their country of residence. A crutch the taxpayer has to pay for.

I'm not saying current temp visa holders are rorting the system, but LAFHA is no longer serving the purpose for which it was originally intended when ppl actually did return to their home countries after their contracts run out and needs to be done away with.

That said, many many people ARE rorting the system and I'm not talking 100's - I'm talking thousands. I've been paying for 8 years so those people can have an easier life. And so are all the PR visa holders who arrive here. Yes, you get Medicare on PR and not on TR - I'm sure if compared, medical costs would be a blimp in comparison to the LAFHA handouts.

We lived here for 2 years on TR without LAFHA, so I do know what I'm talking about. We paid our own medical costs and through our necks for school & study fees.

Don't get me wrong I'm not saying anyone who receive the allowance is bad and I've got no beef with anyone who does. I'm saying the whole LAFHA system should go as it no longer serves the purpose it was intended for and is one of the most abused systems in Australia.

[SANZOZ]

I typed up a whole response but decided to delete it. My (very badly made) point was that its very easy to alienate people on this forum with just a little personal rant, because you do not know their personal situation. That is all. I took it personally but I am over it now Happy ranting!

[AndreaL]

I'm not suggesting you are screwing over the system SANZOZ. There are a couple of reasons I am cranky about LAFHA. Firstly it is not applied across the board to people who are in fact maintaining a residence in South Africa. My own BIL spent 2 years on a temp visa whilst sending $2000 a month back to RSA on mortgage payments....the company he works for ( big mining house) are not interested in the paperwork that goes with structuring LAFHA. In fact I have only met 2 people who actually get it out of possibly 40 plus temp. visa holders.

I'm probably also cranky because we could honestly have done with a bit of help like that whilst we were on a temp visa for 4 years, we also had to fork out medical costs, although not school costs. However, we would not have qualified as we left RSA with nothing and arrived here with nothing...such is life though

I do feel though, that if you send in your application for p.r. your intent is no longer to return to your country of residence and you should cease to claim LAFHA immediately.

Perhaps the system needs re-hauled so that there is less chance of misuse.......

C'mon SANOZ, my intent is not to alienate, but when people are still claiming it on p.r. or when they have citizenship....well that sticks in my craw and is probably the reason that those who genuinely need it or are entitled to it will now be audited.

[Riekie]

SANZOZ, on 02 February 2012 - 07:28 AM, said:

I took it personally but I am over it now Happy ranting!

Wasn't intended to be personal - it's so easy to misunderstand intent in cyberspace. All good.