The Facts – Living Away From Home Allowance (LAFHA) - October 2010

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The massive benefits available to employees who are eligible for the Living Away From Home Allowance (LAFHA) continues unabated! We continue to provide ongoing advice to clients and potential clients in this area. This short article sets out a few interesting facts relating to LAFHA which every temporary employee should consider:

LAFHA Period

Legally there is no fixed time period for which LAFHA is available. As a general rule the ATO considers the maximum length of time domestic and international employees are living away from home to be two and four years respectively. However – this has not been legislated and hence it is only a guide.

Children’s Education Expenses

Childrens education expenses can be included in a LAFHA package. We highlight the following important facts:

  • The tuition fees paid to an educational institution or tutor for full time education can be packaged.
  • Children up to age 24 inclusive can be included.
  • Children can be studying anywhere in the world – NOT ONLY IN AUSTRALIA.

Private Ruling

In some instances employers seek the guidance of a private tax ruling before providing LAFHA benefits. This is understandable where the facts are unusual or complex as the buck stops with the employer. We share with readers the facts considered in a recent ruling where the employer/ employee were successful:

  • The employment contract was being extended for another 2 year period.
  • The employee had been promoted during the first contract period.
  • The employee intends to return to a DIFFERENT district within the United Kingdom after his contract ends.

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