The federal government has announced a three month reprieve to living away from home allowance (LAFHA) reforms, just three days before all temporary residents were set to lose access to the tax perk.
The reforms will now not take effect until October, meaning temporary residents will have until that date before their access to LAFHA is cut.
The government introduced a bill into parliament today to implement a range of improvements to Australia’s tax laws, including those relating to LAFHA.
The Australian Treasury had received over 100 submissions on the draft legislation to change rules regarding LAFHA during a two-week consultation process in May.
Woolworths, the Australian Federal Police, the Minerals Council of Australia, Deloitte, KPMG, Ernst & Young, the Law Council of Australia, and the New South Wales Department of Health all amde submissions.
Assistant Treasurer David Bradbury has taken some of their concerns on board.
“This deferral will give employers and employees more time to prepare for the new arrangements,” he said, in a press release on the treasury website.
In addition, a number of technical changes have been made to the amendments in response to feedback on the exposure draft of the legislation.
“Our reforms to the tax concession for LAFH allowances and benefits will ensure that this taxpayer-funded tax break can’t be misused or exploited,” said Mr Bradbury.
“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.”