Australian LAFHA Benefits Only Employers, Allege Critics

Latest reports suggest that certain changes have been made public to the system of Living Away from Home Allowance (LAFHA), which is basically a kind of allowance made to the job-providers to meet the additional costs of living away from home while performing their duties, which are employment linked.

There are characteristically three fundamentals of a LAFHA, namely, housing, food, and hardship even as the allowance is increasingly being made use of by those who enjoy temporary residency of the country to augment their take-home salaries.

Come July 1, 2012, and only those job-providers, who already have a home, for their personal use in the country, will be in a position to duly claim the allowance. Workers will only be able to claim the allowance while doing jobs away from their Australia-based homes. Via the existing system, several 457 holders are known to claim allowance on the grounds that they normally stay abroad and work Down Under, only on a temporary basis.

Presently, these allowances are tax-exempt. However, under the fresh changes — for those who do not have a home of their own in Australia — lodging and food will be covered as an assessable allowance to the worker. Hence, the same will be taxable even as there will be the necessity for the job-provider to keep back tax from the allowances duly paid. The ensuing influence upon the job-provider will be a decrease in their overall take home salary.

Meanwhile, a concerned person was quoted as saying that Canberra will come up with changes to prevent people from abusing the program of tax exemption. He added that some individuals — more so professionals getting hefty pay packages and overseas workers – were increasingly misusing the system, even as the ordinary taxpayers of the nation were suffering in the process.

This implies the tax concessions will be duly maintained for all workers staying inside the borders of the country, even while they may be required to work elsewhere across the nation, to cover costs on food and lodging while doing jobs away from home.

However, many small businesses are highly perturbed that Canberra’s intended reforms, meant for temporary workers, may not prove to be in the overall interests of the involved workers.

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