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Has anyone considered this:
Move all your super contributions, since the day you moved from your WHV to eg. 457, into a new super fund/account. Now your WHV contributions are in one super, the rest in another.
The rules state that each super must be administrated separately when it comes to DASP, ultimately producing separate payments. Therefore, 65% tax on your "WHV" account, and only 38% on your larger "non-WHV" account.
Has anyone tried this at all or does anyone have any thoughts on whether it would work?
I am in a similar situation to many others in this thread whereby i contributed to my super for 3 months under a WH visa when i first arrived, however since then have had 2+ years of contributions under a 457 visa. Like others I think it's very unfair that I would be charged the full 65% on all of my super - the only reason i was on the working holiday visa to begin with was the time it took to process the 457!
I haven't tried this, but based on ATO FAQ (https://www.ato.gov.au/Super/APRA-regulated-funds/In-detail/APRA-resources/Questions-and-answers/DAS...) it seems like this would be worth a try:
What tax rate should be applied to the DASP if the applicant has held a WHM visa?
If the applicant has held a WHM visa, super funds will need to check whether the DASP include amounts attributable to super contributions made under the WHM visa. If there were, apply the DASP WHM tax rate of 65% to the taxed and untaxed elements. If there were not, apply the DASP ordinary tax rates to the taxed and untaxed elements.
In cases where super funds are not able to determine whether the DASP includes amounts attributable to super contributions made under the WHM visa, for example rollovers, the fund can:
If an applicant has three accounts in a fund, will the fund pay one DASP to the applicant or one from each account, and how will the payments be taxed?
This depends on how the fund usually makes DASP payments. If your fund normally makes one payment then the taxed and untaxed elements of that payment will be taxed at 65%. If your fund pays a DASP from each account then only the payment from the account containing amounts attributable to super contributions made while the applicant was a WHM will be taxed at 65%.
Hi By Bram,
You will be defintely taxed 65% of your super for sure. Ato just did it to me. I tried to speak to them, I reported this situation to a Ato consultant more than 1 month ago, no one has contacted me yet.
This Country is just able to treat foreign workers as slaves, stealing as much money as it can. How a tax rate of 65% can be applied to the whole amount for a visa (WHV) held for 1 year only!!!! These criminal politicians just disgust me....They always talk about theorical concepts like multicultalism, democrazy in Australia...they are just racist and hypocrite!
I would like to report this situation, working on a **bleep** against this absurd law. Please let me know if you are in with this...
Sorry, but this is so unethical and simply just unfair! You are punishing people who are organised and not have a different super account with every employer they have ever had which enough Australian citizens and residents do! I have been 2 years on a Working Holiday and double the time I have worked on other visas. Now that history and being orgnaised has costs me several thousand dollars.
The question has also still not being answered HOW that is actually justified. Not only Australia but other countries too are profiting already from WH makers because they provide cheap labour for jobs locals, according to my experience and what I got told by Australian citizens and residents, are not willing to do, particularly not for those wages. And because of the cheap labout food can or could be offered cheaper. And then again more money gets taken away from everyone who has ever held a WHV? Is really everything only about making money or is there actually an intention of intercultural exchange? I really started to wonder.
Update from me:
Because of a late payment from the last employer I had to lodge another application to get that little bit of money paid out and as this was into another account, opened while I was on another visa but WHV, I can taxed the smaller amount.
So warm advice for every WHV holder - if you stay longer on other visas, open a new account when on the other visa!!! Don't consolidate those two. Then it should, in theory work as it did for me with my last payment. Wish someone had told me back then....
I am just starting work on a 417 WHM visa and I plan on getting sponsored and moving on to the 457/482 visa.
So what is the best way to go about being tax efficient for me going forward?
Is it to change my whole super provider when I move on to the new visa so I have clearly different super accounts?
I wish you all the best for your plans! And yes, to save your super from being lost in taxes for the case you leave the country again and have to claim it before retiring age, then stick to having two super accounts. One with the money which came in from your work during the WHV and one for the time afterwards. At least that is from reading the regulations and my own experience the way which should work. If you never plan on leaving Australia again, then you don't need to worry too much. But sometimes life goes drifferent and unexpected ways. So if I was eligable for a WHV again, that is how I would do it, even if I apply for long-term visas. And if the super provider comes and asks if you want to consolidate, then just say you don't want that, they cannot do it without your consent.
Its time to take legal action against this plain and simple ripoff from hard working overseas workers.
If there is any attorney willing to take this case, I throw in 5.000aud and hoping to get more support from other people who lost their savings to this unethical and wrong racist "law"!
In USA its illegal to apply laws retrospective why should it be legal or accepted in Australia? There are a lot of overseas workers here and there will be uprise after they run out of their current visas!
My loss estimated over 25.000aud
There is some of Australian laws below:
9.48 It is not uncommon for taxation measures to be enacted with retrospective operation. Indeed, budget measures often commence from the date of the budget announcement, rather than the date of enactment. Such legislation does not retrospectively alter the rights and obligations of taxpayers before the date of the announcement—mitigating any negative impact that arises from the retrospective application.
9.49 There is wide acceptance that amendments to taxation law may apply retrospectively where the Government has announced, by press release, its intention to introduce legislation, with the legislation providing for commencement dated to the time of the announcement. The situation is common enough for the Australian Taxation Office (ATO) to have issued guidance on its administrative treatment of taxpayers where taxation legislation has retrospective operation.
9.50 One ATO practice note provides that, when legislation has been announced but not yet enacted, taxpayers who exercise reasonable care and follow the existing law will suffer no tax shortfall penalties and nil interest charges up to the date of enactment for the legislative change. Taxpayers will also be given a ‘reasonable time’ to get their affairs in order, post enactment of the measure, without incurring any interest charges.
9.51 Another practice note provides that, where the ATO changes its view or practices, the Commissioner of Taxation has a general policy of not applying these changed views and practices retrospectively. Typically, retrospective application will only be justified where the ATO has not contributed to the taxpayer adopting a contrary view, where there is fraud or evasion, or where tax avoidance may be involved.
9.52 The Senate has scrutiny processes intended to minimise periods of retrospectivity. Standing Order 44 provides that where taxation legislation has been announced by press release more than six months before the introduction of the relevant legislation into Parliament (or publication of a draft bill), that legislation will be amended to provide for a commencement date after the date of introduction (or publication).
9.53 In 2004, a Treasury Department review of aspects of income tax self-assessment considered suggestions that Parliament should not pass retrospective tax laws. The review concluded that the commencement date of measures should remain an issue to be ‘examined and determined by Parliament on a measure-by-measure basis’.
9.54 The review stated that while, ideally, tax measures imposing new obligations should apply prospectively, retrospective commencement dates may be appropriate where a provision:
corrects an ‘unintended consequence’ of a provision and the ATO or taxpayers have applied the law as intended;
addresses a tax avoidance issue; or
might otherwise lead to a significant behavioural change that would create undesirable consequences, for example bringing forward or delaying the acquisition or disposal of assets.
9.55 Retrospective taxation measures have included provisions creating criminal offences in relation to entering arrangements to avoid regulation of ‘bottom of the harbour’ tax schemes.
9.56 In general, however, taxation provisions with retrospective operation concern liability for tax. Four recent examples are outlined below.