Most Read Contributor in Australia, September 2016
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
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
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.
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