One last LAFHA

by Stephanie Zillman02 Jul 2012

The federal government has conceded that too shorter notice was given in ditching the Living-Away-From-Home allowance (LAFHA) reforms, and has announced a three month extension for the official implementation date – changed from July 1 to October 1 2012.

The change means those eligible employees who were receiving the allowance prior to July 1 will continue to receive it for the next three months – including overseas employees who don't maintain a home in Australia that they are living away from for work, legal experts at Fragomen told HC.

In a statement issued by Assistant Treasurer David Bunbury, the government said the changes have been delayed after close consultation with the business community. “In response to the submissions received, the Government has taken the decision to defer the start date of the reforms from 1 July 2012 to 1 October 2012. This deferral will give employers and employees more time to prepare for the new arrangements," Bradbury stated.

In addition, a number of technical changes have been made to the amendments in response to feedback on the exposure draft of the legislation which aim to ensure the tax break cannot be misused or exploited. “The tax concession will continue to support people who are bearing additional costs because they have to maintain a home away from their actual home in Australia for work purposes, for up to 12 months,” he added.

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