From 1 July 2014, farmers and their partners experiencing financial hardship, whose farm is their source of income, may be eligible to receive the Farm Household Allowance (FHA). The FHA is made available pursuant to the Farm Household Support Act 2014 (Cth) (the Act) which was assented to on 28 March 2014.
The FHA payment scheme will replace the existing Exceptional Circumstances Relief payment, the payment of which is dependent upon climatic triggers, such as drought.1
The amount payable under the FHA is determined by a person's age. For those under 22 years of age, the FHA will be paid at a rate equivalent to Youth Allowance, and for those 22 years of age and over, at a rate equivalent to the Newstart Allowance.2 Each person eligible for the FHA is only allowed to receive the FHA payment for a maximum of three years (1095 days).3 The periods of time over which a person receives the FHA (which total no more than three years) do not need to be consecutive.4
The Act sets out who will be eligible for the FHA. Eligibility requirements are set out separately in the Act for a 'farmer' and 'farmers' partners'.5 An eligible person will be an Australian resident,6 over 16 years of age,7 a farmer (as defined under the Act),8 will enter into a Financial Improvement Agreement (FIA),9 and satisfy the Activity Test,10 Significant Labour Test11 and Assets Test.12 For farmer's partners, an additional requirement that they be in a genuine domestic relationship with the farmer must be satisfied.13
The Act defines 'farmer' broadly to be a person who has a right or interest, including any legal or equitable estate in land, used wholly or mainly for the purposes of a farm enterprise, being an enterprise in any of the agricultural, horticultural, pastoral, apicultural or aquacultural industries.14 A farmer must also have effective control of the farm.15 To exclude those farmers whose principle occupation is not farming, a farmer must contribute significant labour to the farm. Significant labour can include farm management activities, for example, business planning and administration.
An FIA will detail the activities that a recipient of the FHA must undertake in order to receive the payment. These activities are intended to promote self-reliance and may include activities such as further training. In formulating a person's FIA, the overall financial position of the farm and any available options for improvement are assessed by an independent assessor.16 A person will satisfy the Activity Test by undertaking an activity listed in their FIA.17 However, where a person is unable to undertake particular activities given their personal circumstances, such as illness or another temporary incapacity or carer responsibilities, for example, the Act makes an exception in such circumstances.18
The Assets Test involves an assessment of both farm and non-farm assets including those assets owned by not only the person in whose name the application for FHA is made, but also those owned by their partner.19 The FHA will not be payable to person whose net value of their farm assets exceeds $2.55 million.20 Farm assets include a right or interest in things such as land, livestock, crops, plant and equipment.21 A person's non-farm assets must not exceed the following applicable maximums:22
- single recipients (who are homeowners), $196,750
- single recipients (not homeowners), $339,250
- partnered recipients (who are homeowners), $279,000
- partnered recipients (who are not homeowners), $421,500.
Non-farm assets will include all assets other than farm assets; however, it will not include the family home.23
Although the Act makes it clear that a person must be in Australia to receive the FHA, it also makes provision for the continuation of payments for up to six weeks where a recipient of the FHA travels overseas for a medical, family or humanitarian purpose.24
Footnotes
1Explanatory Memorandum, Farm Household Support Bill 2014.
2Farm Household Support Act 2014, ss 55, 56 and s 60.
3Ibid, s 6.
4Ibid, s 6.
5Ibid, ss 8 and 9.
6Ibid s 8(f) and s 9(h).
7Ibid, s 8(e).
8Ibid, s 5.
9 Ibid, ss 8(g) and 9(i).
10Ibid, s 19.
11Ibid, ss 8(b) and 9(d).
12Ibid, Division 6.
13Ibid, s 9(b).
14 Ibid, s 5.
15Ibid, s 12.
16Ibid, s 84.
17Ibid, s 15.
18Ibid, ss 11 and Division 5.
19Ibid, s 36.
20Ibid, s 34.
21Ibid, s 35.
22Ibid, s 33.
23Ibid, s 35.
24Ibid, s 53.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
