Living away from home allowance
New rules will apply from 1 July 2012 for the living away from home allowance. These rules will affect all arrangements entered into after 7.30pm (AEST) on 8 May 2012.
The new rules restrict the allowance to people who genuinely maintain two homes and are living away from a home maintained within Australia. Permanent residents may need to prove that the home they are living away from is maintained for their own personal use. Renting out the home could breach this provision.
The living away from home allowance will only be available for a maximum 12-month period. Those who are affected by this reform may see a reduction in their after-tax income. It is important to review personal budgets and expenses in the light of the change.
Existing arrangements will not be subject to the reforms until 1 July 2014. The changes do not affect the tax treatment of travel or meal allowances.