Farm Household Allowance (FHA) 002-02000000

Farmers and their partners can submit a combined partner online claim. To do this, both customers must be registered for online services, online notifications and be registered as a couple with Centrelink prior to starting their claim.

If the customer is eligible to complete a combined partner claim, this will be offered at the Review and Confirm stage of the claim. Go to Claiming Farm Household Allowance.

Farmers and their partners who are unable or unsuitable to lodge an online claim can submit a combined partner paper claim.

Farmers and their partners still have the option to submit individual claims.

Although specific FHA legislation and policy applies, it refers to social security law for general provisions that apply to JobSeeker Payment (JSP) and Youth Allowance (YA).

Part 5 of the Farm Household Support Act modifies how the Social Security Act and Social Security Administration Act operate, so that those Acts can apply in relation to FHA.

There is also Rules that work with the Farm Household Support Act and modify the Social Security Act to deliver the Farm Household Allowance Program.

References has links for:

• Farm Household Allowance Guidelines that reference the Social Security Guide
• Farm Household Support Act 2014 that references the Social Security Act 1991 and Social Security Administration Act 1991
• Farm Household Support (Consequential and Transitional Provisions) Bill 2014
• Farm Household Support Minister's Rule 2014
• Farm Household Support (South Australian Murray Sustainability Irrigation Industry Improvement Program) Minister's Rule 2015
• Farm Household Support Minister's Amendment Rule 2015
• Farm Household Support (Non-farm Assets) Minister's Rule 2016
• Farm Household Support (Waiver of Debts) Minister's Rule 2016
• Farm Household Support (Non-farm Assets) Amendment Rule 2016
• Farm Household Support Amendment Act 2017
• Farm Household Support Amendment Act 2018
• Farm Household Support (Forced Disposal of Livestock) Minister's Rule 2019
• Farm Household Support Amendment Act 2019
• Farm Household Support Amendment (Relief Measures) Act (No.1) 2019
• Farm Household Support Amendment (Relief Measures) Act (No.2) 2019
• Farm Household Support Amendment (Relief Measures) Act (No. 1) 2020
• Farm Household Support Amendment (Debt Waiver) Act 2021
• Farm Household Support Secretary's Rule 2024

Examples

Specific eligibility and payability provisions apply to farmers and their partners claiming FHA. FHA customers are also subject to some waiting period provisions.

The income and asset tests that apply for FHA are linked to those that apply for JSP and YA customers, but there are significant differences:

• From 11 June 2020 the FHA assets test combines personal and farm assets under a single test with a limit of $5.5 million either for a single customer or a couple. Prior to 11 June 2020, non-farm assets and farm assets are assessed separately for FHA, and both asset tests must have been met to be eligible for FHA
• From 11 June 2020, customers who qualify for FHA will receive the maximum rate of FHA payable
• The customer's estimate of their farm enterprise business income and any directly related business is combined to obtain the total farm business income
• FHA customers may be able to reduce their non-farm income by up to $100,000 if their total farm business income is a loss

FHA is a taxable payment paid at the JobSeeker Payment (JSP) or Youth Allowance (YA) rate depending on the age of the customer.

FHA customers have access to the same benefits and services as other income support customers and may be eligible for add-ons depending on their circumstances. FHA customers are automatically issued with a Health Care Card (HCC).

FHA customers may qualify for:

• an advance payment of FHA
• urgent payment if the customer is in financial hardship
• Hardship Advance upon grant or restoration of FHA if the customer is in severe financial hardship
• Crisis Payment

If the customer is at risk of or is experiencing vulnerability, offer referral to available resources, external service Providers or agency specialist staff if required.

To receive FHA, customers must:

• complete a Farm Financial Assessment (FFA), with a financial assessor who has appropriate qualifications or expertise to conduct the assessment. (An FFA supplement is available to help meet the cost of preparing the FFA)
• be willing to enter into a Financial Improvement Agreement (FIA) which they negotiate with a Farm Household Case Officer
• undertake agreed activities such as training, obtaining advice or seeking work, and
• annually update their financial information from their completed tax return

These activities will be aimed at improving their capacity to become financially self-reliant from on or non-farm activities. An FHA activity supplement can be used to pay for activities agreed to in the FIA.

Customers who do not comply with these requirements without an exemption or a reasonable excuse may have their FHA payments suspended or cancelled.

From 01 July 2019, FHA customers who receive income from a forced disposal of livestock will be able to exclude any amounts assessed as income when they either deposit or intend to deposit into a Farm Management Deposit account (FMD).

The amount received from the forced disposal of livestock is exempt only from the farm business income assessment for the relevant financial year. The amount deposited into the FMD will be included in the assessment of non-farm assets and deemed to be earning interest, which is included in the overall income assessment.

Forced disposal of livestock income will be exempt from the date it is received by the customer and can only be exempted for the member of the couple or the partner who owns the FMD.

For more details, go to Assessing income for Farm Household Allowance (FHA).

The 28 day timeframe has been removed for providing an FFA. From 27 March 2020, Farm Household Case Officers (FHCOs) determine the FFA due date to consider the customer’s circumstances. Generally, unless special circumstances exist, the FFA will be completed and returned within one month of the customer being assigned to the FHCO. One FFA extension can be granted and the FHCO will determine the due date of the FFA extension.

BIR was removed for payments received from 1 July 2020 onwards. BIR processing was undertaken for payments received up until 30 June 2020 (financial year 2019/20). BIR processing ended on 30 June 2024.

The Government announced a package of support to drought affected communities. This includes changes to FHA.

A FHA one-off Relief Payment automatically paid to eligible customers when:

• FHA payment cancelled because they received their 4 year entitlement (1460 days)
• They were cancelled for reason O4Y (Already paid 4 years of FHA), and
• this occurred between 1 July 2019 and 30 September 2020

The rate of FHA Relief Payment was $7,500 for a single customer or $6,500 for a partnered customer. If both customers received FHA payments and cancelled because they received 1,460 days of payment (CAN O4Y), each member of the couple received the FHA Relief Payment.

The FHA Relief Payment is recoverable if determined it was received fraudulently.

From 16 December 2019, the off-farm income offset stopped and replaced with farm business losses. If the income of the farm business enterprise and directly related businesses for the financial year is less than zero, the total farm business loss is offset by non-farm income. The amount of non-farm income offset against the total farm business loss is exempt from the income test up to a total amount of $100,000. A business is a related business of a farm enterprise if it is carried on principally to provide goods or services to the agricultural or aquacultural industries and there is a sufficient commercial relationship between the enterprise and the business.

The drought support package includes 4 changes to FHA. These changes commenced on 11 June 2020:

• All FHA customers will receive Maximum Rate of payment for their circumstances
• A single asset test combines personal and farm assets
• Asset test threshold is $5.5 million
• The Activity Supplement is now $10,000 with a life-time cap and can be used to cover travel and accommodation associated with an approved activity
• The additional activity supplement has been removed
• The prescribed adviser requirements have been removed. Farm Financial Assessments are completed by a financial assessor who has relevant qualifications or expertise. A financial assessor does not need to be a member of a professional association

The Act permanently waives the repayment of certain classes of debts for FHA recipients arising from the BIR process for FHA payments between 1 July 2015 and 30 June 2020. The Act came into effect on 24 July 2021.

Pre-commencement debt

Reconciliation debt (FHA) (RCN) raised prior to Royal Assent 24 July 2021.

Pre-commencement RCN debts fall into 2 categories:

• Partial rate RCN debts: customers with a pre-commencement RCN debt, where they were entitled to a partial rate (reduced rate but not to NIL) at any time during the relevant financial year, are eligible to have the RCN debt waived in full, without the need to ‘trade’ clock days.
  Partial rate BIR debts did not have days re-credited as available clock days when the debt was raised
• Nil rate RCN debts: customers with a pre-commencement RCN debt where they were entitled to a NIL rate (zero rate for entire BIR period), will be required to 'trade' any available clock days to have their debt reduced or waived. This is because they had the benefit of clock days being re-credited when the original BIR debt was raised. FHA recipients with days to trade will have the choice of whether to accept the waiver. Some recipients may wish to continue to receive FHA, rather than reduce their debt by trading days.

Post-commencement debt

RCN debt raised on an after Royal Assent 24 July 2021.

Customers with a post-commencement RCN debt had their debt automatically waived in full without the need to ‘trade’ any clock days regardless of whether they received a partial rate or NIL rate during the financial year/s being assessed for BIR. This process was automatic, this BIR system functionality applied the debt waiver and did not recredit clock days where the customer had zero or partial entitlement for the year reconciled.

This legislative amendment permanently increases the farm asset test threshold to $5 million from 1 July 2019.

Previously, the farm asset test threshold was temporarily increased to $5 million from 1 September 2018 to 30 June 2019 under the Farm Household Support Amendment (Temporary Measures) Act 2018.

The Australian Government provided immediate additional financial support to help farmers and their partners.

Eligible households received either 1 or 2 payments of the FHA Supplement:

• the first FHA Supplement was paid from 1 September 2018 for the qualifying period 1 September 2018 to 1 December 2018
• the second FHA Supplement was paid from 1 March 2019 for the qualifying period 2 December 2018 and 1 June 2019

Farming couples received up to $12,000 and single farmers $7,200 in total. Payments were made direct to their bank accounts.

The farm asset test temporarily increased to $5 million from 1 September 2018 to 30 June 2019.

This legislative amendment extended the cumulative period of Farm Household Allowance to 4 years (1,460 days) from 1 August 2018.

Customers who had already received their full 3 years FHA entitlement could apply for the additional 1 year from 1 August 2018.

Customers who were receiving FHA payments automatically had the extended period applied.

This legislative amendment makes 2 significant changes to the Farm Household Support Act 2014 (FHS Act).

Remove requirement for FHA customers to serve an Ordinary Waiting Period (OWP) and Liquid Assets Waiting Period

This requirement has been removed because farmers were already attached to the workforce. It also required them to use their liquid assets for self-support before FHA became payable. This risked diverting those assets from supporting the operation of the farm enterprise.

This change applies to claims:

• submitted on or after 5 April 2017
• on hand and not yet determined as at 5 April 2017

Definition of farm assets

The FHA Farm assets test was permanently set at $5.5 million from 11 June 2020 under the Farm Household Support Amendment (Relief Measures) Act (no.2) 2019.

The existing definition of farm assets in section 35 of the FHS Act is framed in restrictive terms. That is, an asset is a farm asset only if it falls within 1 of the categories specified in that section.

The Farm Household Support Amendment Act 2017 (Amendment Act) broadened the meaning of a farm asset to include any asset which is used or held wholly or mainly for carrying out a farm enterprise, except for cash, bank deposits and Farm Management Deposits. The Amendment Act defines and specifically includes water entitlement rights and some shares as farm assets.

The new definition of farm assets is applied to claims submitted on or after 5 April 2017.

For all claims determined on or after 5 April 2017, the assessment was based on the definition of farm assets in section 35 of the FHS Act and the provisions of the Farm Household Support (Non-farm Assets)

The Process page contains a list of roles and responsibilities specific to FHA.