Living Away from Home Allowance (LAFHA) to be Reviewed

By Mark Webster
28 November 2011

Australian Finance Minister Penny Wong has confirmed that the Government will consider cutting the Living Away from Home Allowance (LAFHA). LAFHA is claimed by many 457 visa holders working in Australia.

The potential savings of cutting LAFHA are said to be in the order of $350 million. An article in the most recent Sunday Telegraph illustrates the politics behind these measures - a perception that highly paid foreign workers are not paying their share of taxes. The initiative is supported by the union movement - unions have previously expressed concern about relying on the 457 program to source skilled workers for Australia.

This measure is being considered because of a A$7 Billion shortfall in tax revenues for the 2011-12 financial year. This shortfall is largely due to the European financial crisis, along with significant declines in the local sharemarket.

The Government will be handing down a Mid-Year Economics and Fiscal Outlook (MYEFO) this week which will give more details of the proposed measures.

This is a matter which could have a significant impact on 457 visa holders and employers and we will continue to give updates as they come to hand.


ABC News: Wong warns of 'difficult' budget savings
Sunday Telegraph: WIDELY rorted tax breaks for top executives and foreign workers will be slashed by the Gillard razor gang.

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