Hey,
I've been living in oz with my wife and son for past 3,5 years and been receiving lafha/food allowance for the whole period. Now the 457 is about to expire and we are looking into renewing the visa. Of course one option would be to go for pr which my company would sponsor and pay, but my plan is to stay in oz for few years and then return to Europe. So I would like to continue my stay for few years with 457 and obviously receive lafha/food allowance. Is there any obstacles of my plan as long as company would sponsor the 457? For the employer, does it make a difference if I'm on 457 or pr? Extra costs, other than health insurance? I've heard about the FBT for the lafha/food allowance but would that make such a huge difference? As far as I've been told, from the immigration point of view there should not be any issues but will there be issues from ato? I know that to rec eive lafha,the employer has to offer and administer it, but since it is basically a tax benefit, it comes out of ato's pocket in the end,right?

See here for how LAFA works and what it costs the employer

http://gomatildaforums.com/eve/forums/a/tpc/f/5726004143/m/4001002203

Thanks Paddy,
Have read that.
I know how lafha works but this link really doesn't answer my question of the costs to the employer.

"Thus both elements of accommodation and food are subject to the fringe benefits tax. As Colin says as long as the accommodation cost is reasonable there will be no assessment to the company for fringe benefit tax. In the case of food the ATO lay down tables and therefore any excess above these would attract FBT."

Would you consider a rent of $500 a week reasonable then? I guess so.
The food allowance is exactly the amount from the ato website and therefore would not attact fbt. And I'm the lucky one getting a $45k deduction pretax.
Therefore company would not pay fbt, but the employee would still receive these benefits.
This would be supported by the amount of reportable fringe benefits on my payslip which is not the amount of lafha, merely $10k.

Any comments?

This message has been edited. Last edited by: cdundee,

You don't say where you live so I can't say whether $500 is reasonable or not. The point is that it will only be unreasonable if the ATO has raised the issue with you employer. If it has been a problem then your employer will have been assessed for Fringe benefit Tax already.

Easiest way to find out is to ask your employer's accountant if it has been an issue in the past - if not then don't sweat on it.

Do you have any other benefits which might be reportable as fringe benefits?

One slight problem to your plan is that once you renew your 457 visa following the completion of the initial 4 years, some of the requiremnts (particularly those for the sponsoring employer) no longer have to be met (the requirement to ensure that the employee has health insurance I am pretty sure is one of them). I also have something in the back of my mind that LAFHA can also not be claimed after the initial 4 years. I think I am remembering something I read on the Collet and Co explaination of LAFHA which says it can be claimed for 4 years - whether this is an absolute time limit I am not sure however - but I read it as so ! (If you haven't read that document you can find a link to it on the gomatilda website and also in some of the forum posts on the subject).

I dont believe there would be any additional costs to your employer if you were to stay other than the cost of renewing your visa. A sponsored PR visa would be more expensive and you would definitely lose your LAFHA then. So if you are absolutley sure you dont want to stay in Oz then just stay on a 457 visa and hope that I am wrong about LAFHA !

When I received LAFHA my rent was $420 per week (Eastern Suburbs of Sydney) and that was for a couple with no kids.

I'm just living in a 2 bdroom in inner west for around $500 a week and it seems there hasn't been probs with $850 a week either. So there hasn't been assessment for the company either.
FBs, there are some which could add up being that ~10k but I guess I have to figure that out from the employer.
I know several cases (not only in our company) where the lafha has been continuing normally beyond 4 years as long as new 457 is applied and approved, but as it is for many over here, it is bloody hard to find solid and 100% correct information about it in black and white. Some ppl on the forums say about limits of 4 years but it either seems that some ppl have just been lucky enough receive new visa/lafha and some other ppl have met obstacles even when applying for the new visa.

Hi,

Yeah, I would like to understand too what happens to LAFHA if you get a second 457 visa.

My case:
I worked for 2 years for my first employer under 457, didn't give me LAFHA.

Now employed by an Aussie coy under a new 457 visa and trying to negotiate LAFHA if eligible.

In this widely referred document http://www.gomatilda.com/news/documents/The_Living_Away...m_Home_Allowance.pdf it states that if an employment have been obtained while in Australia, one is not eligible for LAFHA.

I wonder whether it is possible to be absolutely, categorically 100% sure about this as it seems nobody at ATO is able or willing to answer my enquiries and as I've received contradicting tax advice from differnt tax agents\accountants.

I hope Alan can help.

Thanks for this great forum! Appreciated!

Hi all,
Don't know if I'm being screwed here but the situation right now is:
-I'm getting a new 457
-LAFHA stops as stated earlier and solely because E&Y is advising my company to stop paying because tax office is saying 4 years is acceptable limit for it. Apparently they are afraid to get audited regarding the LAFHA and possible FBT.
-Other benefits as medical cover continues

Anyone have experience with 457 and employers obligations regarding the return?
"ensure that the cost of return travel for an employee (and accompanying family member) is met to return them to their home country"
When is this statement valid? When employee want to leave, sacked, visa expired or contract expired?