ATO focus on LAFHA could impact on 457 visas

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Created on Tuesday, 17 January 2012 18:01

Written by Editorial staff

For many travellers holding a migration visa, Australia offers a number of unique opportunities in both work and travel that may be unavailable to them back home.

As they gain employment and become a valuable part of their adopted society they are able to access some of the incentives put in place by official departments.

One good example of this is the delivery of funds from the Australian Taxation Office (ATO) through an employer when a staff member is required to travel away from their usual residence on business for an extended amount of time.

Known as the Living Away From Home Allowance (LAFHA) it is intended to provide staff members with the support they need to cover the expenses incurred as a result of being relocated for their work.

Individuals employed on contracts that require fly-in fly-out (FIFO) arrangements were able to receive the benefits, as were officials transferred to remote postings.

In some cases, temporary residents in Australia - such as those on the 457 visa - were technically considered to be living far from their permanent residence for work purposes and as such were eligible to receive the LAFHA.

However, the changes proposed by the ATO could see these payments come to an end as the taxation office seeks to better regulate these concession payments.

Amidst the raft of structural recommendation on expenditure justification and income tax treatment, there is a section that directly relates to temporary residents.

It aims to limit the availability of LAFHA payments to those immigration visa holders who have an established home in Australia and are living and working away from this location.

The draft changes are still being reviewed by the tax office and are currently being opened for consultation - however at this stage the concession is thought to cease being available to international workers who do not meet the new requirements from June 30.

This means that there is less than six months to go before the ATO applies its reviewed alterations to existing legislation.

For international workers planning on travelling to Australia for employment, this could give them a reason to re-evaluate their circumstances and consider the prospects offered by a more permanent visa solution.

This is especially true for those migrants who are planning on entering the mining and resources sector - which is well known for its reliance on FIFO arrangements - as they may need to review their living arrangements in advance.