Living away from home allowance impacts talent pool
High value expat candidates claim they will struggle to make ends meet once the Federal government cuts access to the Living Away From Home Allowance from July 1.
A Robert Walters survey of expat workers receiving the LAHA found 72 per cent believe they would struggle without the entitlement and 57 per cent would consider moving to a country that supports the perk.
The LAHA was paid by employers to employees either from overseas or living away from their home city or town. Employers were then able to claim the expense as a tax deduction.
Last November the Federal Government flagged changes to the system but did not reveal the finer details until May.
Known changes include cutting off temporary residents and allowing permanent residents with an LAHA arrangement in place as of May 8, 2012 to continue to receive the payments until July 1, 2014.
Other expats will be required to maintain a home in Australia and will only be able to claim the LAHA for a year. All employees will have to substantiate their expenses for food and accommodation and then claims these as a tax deduction up to a particular amount.
The Government invited submissions up until May 29 but despite receiving 106 submissions is not expected to make any amendments to the new system.
Recruiters claim the allowance has been particularly useful in attracting and retaining IT talent and claim upward salary pressure could make it hard to secure the right workers and even jeopardise important projects.
In the 2009/10 financial year, 1,415 employers put in a total of $109 million worth of tax deductions to the Australian Taxation Office for LAHA expenses.
