Summary

There is no news from Treasury as to when the draft legislation in respect of the LAFHA changes will be released or whether a transitional rule will be introduced. This is very disappointing given the proposed changes will apply from 1 July 2012.

We recommend that the proposed changes to the LAFHA rules be communicated now to both your domestic and international employees on the basis that the changes will apply from 1 July 2012.

We can assist in developing communication strategies; FAQ's and decision matrices if required

Background

We recently spoke with Treasury to obtain an update. Treasury made the following comments:

  1. Over 100 submissions were received by Treasury on the proposed LAFHA changes Consistent theme in the submissions around a need for a ransitional rule in respect of existing expatriates
  2. She is not in a position to comment whether such a rule will be introduced They cannot give me any time frame as to when the exposure draft legislation will be released. It may or may not be released prior to 1 July 2012; it depends on the Government's priorities.
  3. They suggested that we proceed on the basis of the consultative document in the event that draft legislation is not released prior to 1 July 2012.

The key concerns raised in our submission remain unaddressed.

Questions

Please do not hesitate to contact Michael van Schaik, Associate Director, Employment & Remuneration Services on + 61 3 8635 1835

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