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Many overseas workers are not aware of the benefits The Living Away from Home Allowance provides, or understand how it is administered. At Geoffrey Nathan, this is what we specialise in; we are the experts so you don’t have to be! However, to put your minds at ease, here are the answers to some repetitive questions we get daily at GN.
1. How long can I receive the Living Away From Home Allowance for?
The amount of time differs depending on your particular situation, but typically, you can receive LAFHA right up until you are granted permanent residency (PR) or for as long as your intention is to return back to your original place of residence. If you intend to apply for PR then you MUST inform GN as soon as you apply and let us know once your PR has been approved.
2. How much LAFHA am I allowed to receive?
Australian Tax Law does not specify exactly how much LAFHA you can receive. This tax free allowance is calculated based on your living expenses in Australia, the state you live in, how much you are paid by your employer, your job role and whether other people in your family (spouse/children) are receiving LAFHA. At Geoffrey Nathan, we are the experts and we’ll give you the most LAFHA that is right for your situation!
3. Is Geoffrey Nathan qualified to work this out for me?
Geoffrey Nathan has been administering LAFHA to overseas candidates for over 15 years and is a founding member of the ACPMA. The ACPMA work closely with the ATO to establish our processes and procedures for administering LAFHA to ensure that we are adhering to current legislation and our candidates are receiving the maximum amount. The team at GN constantly monitor the industry and work closely with the ATO to keep on top of changes and updates in this area.
4. Why is your quote different to other contractor management companies?
At Geoffrey Nathan, our aim is to provide the greatest amount of take home pay possible to our candidates. However, we want to administer the greatest CORRECT amount and therefore have strict policies and procedures to make sure everything we do is right. Geoffrey Nathan has a low risk status since we administer under the ACPMA guidelines. Many of our competitors may be able to provide more LAFHA to their candidates; however, this amount may be at a higher risk status.
5. My accountant doesn’t know about LAFHA, why is that?
LAFHA is available to overseas workers under Fringe Benefit Tax legislation. Your personal tax accountant will know Income Tax legislation in and out; however, LAFHA never becomes part of your income since it is an allowance under a completely different set of rules – Fringe Benefit Tax! LAFHA is a niche part of Fringe Benefit Tax law and even your company accountant simply may not have come across it before.
6. What happens to my tax back at the end of the year if I receive LAFHA?
When you submit your tax return at the end of the year, the amount of tax you receive back is reduced. The reason for this is that you receive more pay each pay period so that you have more money in your pocket each month rather than at the end of the year.
7. What will happen if the ATO audits me?
Due to Geoffrey Nathan’s strict procedures and processes, if you are audited by the ATO you will not be in breach of any laws in regards to the amount of LAFHA you receive as this will be correct as per the ACPMA’s guidelines. As long as you keep Geoffrey Nathan informed of your visa status and living arrangements you have nothing to fear in regards to LAFHA.
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For more information on the Living Away From Home Allowance visit our website
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