457 Visa

[Guest Seoul Sister]

Hi everyone,

I would like to hear from all of you who have knowledge of the 457 visa, and when I say ALL of YOU, I mean it. Could you please share with me everything there is to know about the details of this visa type. I have seen that when on this visa, you have higher school fees and that you qualify for a LAFHA (Living Away from Home Allowance). This allowance is apparently great for if you own a house elsewhere, but is this regardless of whether this house is being rented out ? I am also interested to know what the processing time is for this visa, as I have heard that it is 3 months ?

Thank you in advance. Looking forward to learning from you !

Seoul Sister

[Dedrei]

Hey girl

The processing times of this type of visa is quick. Ours took about 4 weeks, could have been quicker as we were stalling with the medicals.

Our visa is valid for 4 years and this is the max for the visa, you can get it renewed when it is close to expiry. 457 Visa is a temporary visa so you don't qualify for medicare and any other type of state allowance. If you have PR then you don't pay school fees, on 457 visa you have to pay school fees. So basically you have to pay most things out of pocket on a 457 visa, while you receive lots of benefits once you have PR.

Not too sure about LAFHA.

[Ajay]

Hey SS,

Time from application to approval on a 457 is quick – around 4-6 weeks start to finish. The validity ranges from 3 months to 4 years, depending on what is applied for.

A 457 visa gives you temporary residence status, so you don’t qualify for any of the state subsidised support, including Centrelink (kinda like social security) and Medicare. The situation with regards to school fees varies from state to state, but in NSW, temporary residents have to pay school fees to the tune of $4500 (up to Year 9) and $5000 (Years 10 onwards) for kids going to public schools. This money is paid to the Department of Education and needs to be paid in full before you can enrol your child in any government school. Note that this doesn’t apply to private or semi-private schools – only public schools. There are heaps of Catholic Schools around (classed as private here) and the annual fees there are around $800 - $1200, regardless of residence status. So it isn’t unusual for those on 457’s to send their kids to these schools instead. If you are a PR, then schooling in the public school is free. You can apply for exemption from the government fees and from what I’ve seen, these are waived if one parent has to stay at home to look after younger (i.e non-school age) children while older children have to go to school.

Now, the LAFHA is an interesting thing. Basically, it allows for the rent portion of the employees salary to be paid as a tax-free benefit. So if, for example, your monthly salary is $5000 and your monthly rent is $2000, you will be taxed only on $3000. This can represent a massive saving. Our internal policy states it as such:

“Eligible employees must be required by XXXXX to live away from their usual place of residence, for a fixed period of time to fulfil their employment duties. In order for an employee to be regarded as living away from their usual place of residence, they must have an established usual place of residence and there must be an intention or expectation to return to this usual place of residence at the end of their fixed term assignment. The employee must be employed on a fixed term employment contract, which clearly details a start and end date. If an employee at any time chooses to permanently change their place of residence, or makes an application for another visa, then they are no longer considered as living away from home and are therefore ineligible for benefits.”

Obviously, you can fully be intending to return to your place of residence right up till that last day, when you wake up, scratch your head and say “hell no – I think I’ll hang about here for a while longer!”

The following circumstances would not constitute LAFHA eligibility;

No clear established usual place of residence (i.e.: moved around the world for work)

Arrived in Australia on a working holidaymakers visa and towards middle/end of visa they are sponsored by a company under a 457 visa. As they were originally coming to Australia for a holiday not to work, they would not be eligible to receive LAFHA.

The LAFHA can be paid for up to a maximum of 4 years, I think.

The 457 is a great way to get in and get the all-important local market work experience (which qualifies you for more points under the immigration system). Once you’ve been here for a year on a 457, you can apply for PR and once granted, obviously you would be eligible for all the benefits offered by the state (but would lose the LAFHA).

I hope this throws some light on the matter (I think I’ve confused myself now!! ). Lemme know if you’ve got any more specific questions.

Love

Ajay

[Guest Seoul Sister]

Hi there,

Thanks so much for the detailed and fantastic answers ! You gals are helping me so much !! Am I correct in assuming that when on a 457 you end up paying the same taxes as everyone else, eventhough you won't be getting any of the State benefits ? Or are there some kind of tax relief allowances in place (except for LAFHA) ? Thanks Ajay for the very valuable/ understandable explanation on the LAFHA allowance, this could make a huge difference ! Does one have to apply to get this allowance, or does the company apply, or do you automatically get it ? And then another more budget related question. If you are receiving no State help with regard to paying medical and other social securities, what kind of amount should you keep in mind for paying your own medical ? (Family of four - two adults, two children, all as healthy as horses ) Are there certain securities / insurances that the government expects you to have ? Life / Disability / Unemployment ? Sorry, so many questions !

Wow, thanks for all of your help. I am really chuffed !! Thanks also to Riekie for jumping in and giving me loads of info, behind the scenes.

Love from here

SS

[Ajay]

Hi again,

I need to get a life! What am I doing hooked up to the internet on a Saturday afternoon Oh right, now I remember - it's 'cos the kids are outside playing (no, not in the traffic despite my desperate pleas ) and the hubby is kipping on the sofa So this is my time! Of course, I should be doing something terribly domestic, like baking or sewing, but instead, I'm sitting here, in frony of my trusty laptop, eating cherries n(OK, OK, yes, they are dipped in chocolate!!) and typing

So, back to LAFHA - it is paid at the discretion of the company that employs you. I get it, but I know some people here on a 457 that don't. BUT, I'm pretty sure that if the contract of employment is for a fixed term (as it would have to be on a 47) you should be able to claim that tax back at the end of the year anyway, under the LAFHA scheme. But don't quote me on this.

You're right - we pay the same taxes as everyone else, and don't enjoy the same benefits - it's something that causes a lot of grumbling. But the way I look at it is that at least I see something in return for my taxes - like the public transport system. Small consolation for some, but fine for me. I'm easily pleased

Private medical care - if you want full in and out of hospital cover (but excluding dental) you're looking at about $260-$300 per month for a family of four. I think you can also get hospital only cover if you want, and that would obviously be cheaper still. If you want the 'extras', like dental, add another $100 per month. Go to www.iman.com.au and www.mbf.com.au for more detailed info. Both offer the required 'repatriation' cover (a requirement of the visa).

As soon as you are employed, the company is required to pay into a Superannuation Fund (referred to as a super) fund on your behalf. This equates to 9% of your salary and is comulsory. So, if you are made a job offer, find out if the salary offered includes or excludes super. If it includes, then you know that 9% of that amount you won't get a sniff at, so deduct that to see the real cash offer being made. The super is a sort of pension fund and the money is yours once you retire, take pension or leave the country - so it isn't lost in anyway. Previously you didn't have the option to choose your own fund but recent legislation changes now require that all employees are given the option of choosing where they want their super placed.

Hope this is useful! Lemme know if you need more. Hubby is probably good for another 2 hours sleep

Love

Ajay

[Guest Seoul Sister]

Hi again,

Thanks for all of the answers ! If it's traffic related activities you're after for the younger ones, you are welcome to send them over, I'm sure you won't be disappointed !! Hehehehehe

Speaking of the public transport system, I would love to hear your thoughts on this - safe, clean, cheap, etc.

Thanks, you are a gem.

Love from here

SS

[Ajay]

I think the public transport here is fantastic, but then I'm comparing it to what was available in SA. Where we live, in the Hills, we have regular buses, and the cost is cheap (when compared to the cost of driving and more importantly, parking, in the city). There aren't masses of train stations out in the western suburbs, but I'm a 5-10 minute drive away from one. Train services are great as well, but get very full in peak hour. All in all, I think it's great.

Cheers

Ajay

[Guest Seoul Sister]

Howzit,

Thanks again for your answers. Do you have trains into downtown every half hour, hour, fifteen minutes ? Or how does it work ? And how much do you pay for a round trip, or do you buy a monthly pass ? On our subway we buy a pass and then we put money 'on', almost like the cellphone 'pay as you go' systems. The city is zoned and depending on how many zones you travel, you pay varying amounts, with the maximum being US$1 from the one side of the city to the other. Trains arrive every 3 minutes between 6 in the morning and 12 at night and the others hours only every 7 minutes... VERY efficient and very clean. There are 6.2 million ppl who use the subway system daily, on average during the warm months and approx 2 million more, when we have snow. Oh wow, I never realized this, so you are also in the Hills area. Seems really nice and well-occupied by Saffers !! Saw some very nice houses in both Kelleyville and Bella Vista yesterday, are these nice areas ? Do they also fall under the Hills ? Or are they in another area/region ?

Hope today is also nice and peaceful like you had yesterday ! We are having a fantastic, bright and clear spring day with 9 degrees and loads of sunshine ! Whohooooo !

Love from here

Seoul Sister

[Massyn]

Ajay - are you an immigration consultant? hehe!! yeah, we came over on a 457 initially, same deal, 4 week visa turn around time, 4 year validy, school fees of $4500 approx per annum (luckily my employer paid!!), no social security (centrelink), but a nice tax incentive called LAFHA.

When we became permanent residents, our 457 was just swapped to a PR. 1 month turn around (if sponsored by an employer)..

[Ajay]

It's Monday morning now, so I'm feeling decidedly less chirpy now than I did on Saturday afternoon

I'm not really a guru on public transport system - I'm more of a casual user. The trains out in the western suburbs (or at least from my local station in Pennant Hills) run to the city every 30 minutes - probably more often in peak hour. Within the city, there are trains every couple of minutes. Costs also vary depending on the number of zones that are travelled through. It's also cheaper to travel off-peak. It's pretty much the same with the bus service, as far as I can tell. You can buy passes (weekly or monthly) and that works out cheaper as well. If you go to www.131500.com.au, you can see all the various types of transport and how often they run. Great website!

The Hills is a lovely area - we're in Cherrybrook. We're about 30km's from the city and about 15km's from Parramatta (where I work). The Hills covers a big goegraphical area as well - covering Cherrybrook, Baulkham Hills, Beaumont Hills, Pennant Hills, West Pennant Hills and Kellyville, amongst others. I think Bella Vista may fall slightly outsidfe of the boundaries. The only train station servicing this area is in Pennant Hills, so the closer you can get to there, the better! There are lots of SAffers around as well, and even a local SA shop, so I've found fitting in quite easy.

Keep the questions coming - I'm starting to feel useful

Massyn,

hehehe No, I'm not an immigration consultant - just went through the process like everyone else:-) I see that you were asking about people in Kellyville - I've got some friends out that way too. If you contact me via PM, I'll try to arrange a get-together!

Cheers

Ajay

[Guest Seoul Sister]

Hey there Ajay and Massyn,

Thanks for all of the info.

Thanks Ajay, I will go and have a look at the website. Useful (??), you were useful, LOOOOOOONG before I came along with my Applying for a 457 visa101 questions, spiced with some completely off-topic Sydney peripherals. I seem to always go off-topic in varying degrees, so luckily ppl have come to expect this of me. (or should this read tolerate this ?) Thanks for your help. You rock !

Good luck with Monday, the sooner it starts, the closer we are to Tuesday...

Love from here

Seoul Sister

Edited March 20, 2006 by Seoul Sister

[sa2auz]

Hey there Ajay and Massyn,

Thanks for all of the info.

Thanks Ajay, I will go and have a look at the website. Useful (??), you were useful, LOOOOOOONG before I came along with my Applying for a 457 visa101 questions, spiced with some completely off-topic Sydney peripherals. I seem to always go off-topic in varying degrees, so luckily ppl have come to expect this of me. (or should this read tolerate this ?) Thanks for your help. You rock !

Good luck with Monday, the sooner it starts, the closer we are to Tuesday...

Love from here

Seoul Sister

Hi there

Below is part of an article I was sent by an immigration company in their monthly newsletter received yesterday. I hope it sheds some light on the tax question

Some tax relief for Temporary Residents

The Treasurer announced the following last month that may reduce the tax payable by temporary :

The Treasurer today announced improvements to the taxation arrangements for temporary residents which will give Australia one of the most competitive expatriate taxation regimes in the world.

A foreign source income tax exemption for temporary residents was introduced into Parliament twice in 2002, but failed to pass the Senate because of Labor Party opposition. The Government announced it would re-introduce the measure in the 2005-06 Budget.

The Taxation Laws Amendment (2006 Measure No. 1) Bill 2006 (the Bill) introduced today implements that announcement but goes further than the previously blocked legislation which was to apply a tax exemption to a temporary resident for a period of 4 years, only if the temporary resident had not been an Australian resident within the previous 10 years.

The Government will now remove these time limits as they provide unnecessary disincentives and distortions for individuals wishing to remain working in Australia. The measure will now apply to holders of a temporary visa (excepting those who are directly or indirectly treated as residents for social security purposes).

Holders of a temporary visa will not be taxed on foreign source income. They will continue to be taxed on all Australian source income and salary and wages generally, including income from employee shares or rights.

Further, capital gains taxation of temporary residents will be aligned with non-residents. The combination of these changes will also ensure that the capital gains tax rules for departing residents do not apply to temporary residents.

The changes will significantly reduce administrative and compliance costs. It will also further reduce the cost to Australian businesses of employing expatriates.

The Government is committed to assisting businesses to access the skilled labour needed to compete internationally. These significant improvements have been welcomed in consultation with business and taxpayer representatives.

(Source : Government Treasury Department)

[Marius]

Here is my 5 cents ( aussie cents ) on the 457, specifically medical and schoolfees. Schoolfees - It depends on state I think, I am in Adelaide South Aussie on a 457 ( currently busy with employer sponsored PR ) and paid what any aussie paid for my daughter's schoolfees. It cost $ 385 for the year for a child in year 8. We spoke to the principal and showed her my PERMANENT employment contract and had a letter form my employer stating I have permanent work and they are planning to sponsor me for PR, so I am in the process of becoming a resident and plan to stay. Incidentally, I also got car finance this way for the balance I did not pay cash, however it is only for the visa period. As for medical, we are 3 in the family and I pay $ 383 per month, full in and out hospital including dental. ONce I get PR this will drop to $ 130 per month . My employer pays half as part of their obligation as sponsor towards medical expenses ( OK, they might be a bit more generous than most ). See sponsor obligations for the 457. My employer will also pay the $ 1995 for my PR application as well as the medicals of about $ 130 per person. They are not compelled to but did indicate they will pay ( bless their souls )As far as tax is concerned, unfortunately on a 457 you pay the same as any aussie, but can not use any state benifit or get any allowances / tax benifits like child support etc. I do however believe there is strong talk of temp ressies ( oh hell, I am starting to talk like an aussie ) on 457 getting some tax relief this financial year from oom Johnny Howard.

I am not familiar with the living away allowance. It is from my understanding a bit of a grey area as you have to show you intend returning to your home elsewhere and show you have one to teurn to. I suppose one can bend the truth a bit even if you intend staying, but in my case my employer and I decided againt it because al the support end letters they have written to state I intend staying in Australia for the reasons above and other as well as the PR sponsorship.

Hope this helps. The 457 is easlily done by yourself and takes 1-4 weeks if all is OK and in order.

Good luck

Thanks sa2aus for stating the facts regarding the proposed tax relief for temp ressies. I hope it is introduced.

[Ajay]

Hi,

Whilst what sa2auz and Marius sy is true (about the legislation changes) it doesn't apply to the income that you earn in Australia. So, you still pay the same income tax etc as permanent residents.

Cheers

Ajay

[Marius]

Thanks Ajay. Oh well, I guess my tax will stay the same then.

[Guest Seoul Sister]

Hi everyone.

Thanks SO MUCH for all the detailed information. The tax information is VERY interesting, especially to us, since we do have foreign income ! Marius/Ajay, if we still own a house in Holland, which is currently rented out and we still have all of our post going to that address, together with bank accounts, credit cards, etc all still running as normal in Holland, do you think we will qualify for the LAFHA ? To what degree can we bargain on the proposed tax idea mentioned above actually going through ? Are you at some stage (say after 5 years of living in Oz) forced to be a permanent resident or can you go on as a temporary resident as long as you want ?

Thanks a lot.

Love

Seoul Sister