Eligibility and payability for Farm Household Allowance (FHA) 002-02040000

FHA is paid to eligible farmers and/or the partner of a farmer. Both members of a couple can be paid as a farmer if qualification criteria are met.

Payment of FHA cannot occur in conjunction with any other:

• social security benefit
• social security pension
• Service Pension
• Income Support Supplement, or
• Veteran Payment

FHA changes set by the Australian Government include:

• 1 August 2018, period that farmers and their partners can receive FHA extended to 4 years (1,460 days)
• 16 December 2019, FHA became payable for 4 years in a specified 10 year period with
• first 10 year period 1 July 2014 to 30 June 2024
• second 10 year period 1 July 2024 to 30 June 2034

Customers that have already received 1,460 days of payment in the first 10 year period can reapply for the second 10 year period.

For the purpose of FHA, a farmer is a person who:

• has a right or interest in land, and
• uses the land wholly or mainly for the purposes of a farm enterprise

The definition of a 'farmer' includes customers with:

• a right or interest in land used for the purposes of a farm enterprise
• a legal or equitable interest in the land. For example, sharefarmers (customers who have entered into an agreement to contribute resources to a farm enterprise for a share of profits)

A customer does not need to have total financial or legal control of the farmland to meet the definition.

The customer must meet all the following eligibility requirements. They must:

• be a farmer who contributes a significant part of their labour and capital to a farm enterprise (or is unable to do so due to a temporary illness or injury), where the farm enterprise is:
• is in Australia, and
• has significant commercial purpose or character
• be aged 16 years or over (partnered customers must be over the age of consent in their State or Territory)
• meet
• Australian residence requirements for payment
• the income and asset test
• be willing to enter into and comply with a Financial Improvement Agreement (FIA), or they have an existing FIA
• have received FHA for a cumulative period of less than 4 years in the specified 10 year period

A customer must meet all the following requirements. They:

• are not qualified to be paid FHA as a farmer in their own right
• are a member of a couple and their partner qualifies for FHA as a farmer. Note: the farmer does not have to claim or receive FHA for their partner to claim and be eligible for FHA
• meet
• Australian residence requirements for payment
• the income and asset test
• are aged 16 years or over, and over the age of consent in their State or Territory
• are willing to enter into and comply with a Financial Improvement Agreement (FIA), or they have an existing FIA
• have received FHA for a cumulative period of less than 4 years in the specified 10 year period

A farmer may have a right or interest in farm land through:

• ownership of land
• leasing of land
• sharefarming
• private companies and trusts that own land
• being an apiarist

A farm enterprise is the business associated with the farm land.

An enterprise is described as a business within the following industries:

• agricultural
• horticultural
• pastoral
• apicultural
• aquacultural

Exclusion

Forestry is not an activity that falls within the above industries. It does not meet the definition of a 'farm enterprise' for the purpose of FHA. Individuals with a right or interest in land used wholly or mainly for forestry purposes do not meet the definition of a 'farmer'.

The assessment of significant labour considers:

• if the labour of a farmer is significant to the farmer and the farm enterprise
• the comparison of time spent working the farm with time spent in off-farm work
• whether the off-farm work is irregular and does it compete with farm requirements
• if the labour promotes, or is it reasonable to expect it to promote, the efficient and profitable operation of the farm enterprise

Farmer incapacitated by a temporary illness or injury

A farmer incapacitated by illness or injury is considered to be contributing significant labour when:

• the illness or injury is temporary, and
• they were contributing a significant part of their labour to the farm enterprise immediately before their illness or injury

The assessment of significant capital is assessed on a case-by-case basis. There is no defined proportion of capital to meet the qualification, the contribution is assessed in comparison to other capital and liabilities the farm holds.

The assessment of significant capital considers:

• if the capital is significant to the farmer and the farm enterprise
• only the farmer's contributions of capital to the farm enterprise. It is not a comparison of the total contribution where others are involved in the farm enterprise

Under section 7 of the Secretary's Rule, the following must be considered when determining if a farm enterprise has a significant commercial purpose or character for FHA purposes:

• is the farm enterprise being conducted efficiently and profitably
• if the farm enterprise is not being conducted efficiently and profitably, what steps or proposed steps are being taken, to make sure the farm enterprise is conducted efficiently and profitably
• size and scale of the farm enterprise, including:
• the current level of production
• the level of production that could reasonably be expected to be achieved within a reasonable timeframe
• the extent that commercial markets, and potential commercial markets, can be accessed by the farm enterprise
• suitability of the land on which the farm enterprise is conducted
• capital requirements for the farm
• operational and other costs of the farm enterprise, including debt servicing
• matters that have had an adverse effect on the profitability of the farm enterprise and the steps being taken to manage those matters

From 1 July 2024, new eligibility provisions apply to new claims. These provisions help Service Officers assess whether the farm enterprise has significant commercial purpose and character.

The changes introduce new revenue considerations, including whether the:

• average revenue of the farm enterprise has been more than $60,000 per financial year over the last 3 financial years
• income from the farm enterprise could be expected to exceed $60,000 gross turnover per year

The gross income must generate from Primary Production activities (gross revenue from sales).

Related sources of business income under Farm Business Loss rules are excluded when considering if the farm enterprise has met the $60,000 gross turnover.

Where a farm enterprise does not currently meet the required turnover from Primary Production activities, consideration may be given to:

• whether it has been met in the last 3 financial years, or
• if there is a reasonable expectation that it could meet this turnover in the future

To support the commercial viability of the farm enterprise, customers must provide their gross farm income from their last 3 tax returns.

A current financial year estimate can be used if the customer's latest tax return shows a profit exceeding the income threshold resulting in the customer being ineligible for FHA.

An estimate maybe appropriate where the profitability of the farm has reduced and the customer has suffered from exceptional circumstances such as:

• drought
• fire
• infestation

Farmers my continue to be paid FHA where they:

• received FHA prior to 01 July 2024 and their payment rolled over into the new 10 year period, and
• continue to meet eligibility

If a customer’s payment is reviewed, qualification must be reassessed and the $60,000 gross turnover threshold must be evaluated when considering the significant commercial purpose or character of the farm enterprise.

Section 7(7) of the Social Security Act allows that under certain circumstances, a customer may receive an exemption from meeting the residence requirements, in order that they can be paid JobSeeker Payment or Youth Allowance for a period of 6 months, see New Zealand 10 year residence exemption.

This exemption does not apply for FHA due to the modifications to the Social Security Act imposed by section 94 of the Farm Household Support Act 2014. A customer who falls into this residence category may wish to test eligibility for JobSeeker Payment and will be subject to the income and assets tests relevant to that payment.

A waiting period may be applied when a customer qualifies for FHA but it is not immediately payable. Waiting and preclusion periods are not included when calculating the maximum 4 years entitlement to FHA.

Waiting and preclusion periods that may apply:

• Seasonal Work Preclusion Period (SWPP) if the customer has been engaged in high income seasonal, intermittent or contract work in the 6 months before claiming
• Income Maintenance Period (IMP) if the customer has received termination or leave payments from an employer
• Newly Arrived Resident's Waiting Period (NARWP)

FHA customers are also subject to a Compensation Preclusion Period.

From 5 April 2017, the Liquid Assets Waiting Period (LAWP) or Ordinary Waiting Period (OWP) no longer apply to FHA customers.

If more than one waiting or preclusion period applies to a customer, they are served concurrently and the end date is the day on which the longest period ends.

Customers who do not meet the assets tests for FHA may qualify under Asset Hardship rules as assessed for other income support payments. There is no distinction between personal and farm assets when assessing which assets can be disregarded.

As of 11 June 2020, the assets test limit:

• increased to $5.5 million
• combines personal and farm assets
• is applicable to both a single customer and a couple

Preclusion periods may be partly or fully waived if the customer is in severe financial hardship.

The customer may seek a waiver on severe financial hardship grounds when claiming FHA or while serving a preclusion period. The waiver takes effect from the date the customer claimed severe financial hardship.

For more details, see Waiting periods for income support payments.

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 payment, customers are required to:

• complete a Farm Financial Assessment (FFA) with a financial assessor
• enter into and comply with a Financial Improvement Agreement (FIA) that they negotiate with a Farm Household Case Officer (FHCO)

When granted FHA, the customer will have an FHCO assigned. The FHCO will regularly review the customer's progress towards meeting their activity requirements. Where agreed by the customer, a Rural Financial Counsellor (RFC) may attend meetings with the customer and the FHCO to provide extra support and guidance towards improving the customer's circumstances.

The RFCS provides free, independent, and confidential assistance to eligible farmers to:

• help them better understand their financial situation
• offer a range of services and information to support customers to assess their business finances and plans for the future
• access government and industry programs, as well as help with short term issues including:
• negotiating loans,
• debt mediation
• succession planning
• prepare and lodge claims for FHA
• access professional services to assist them manage and cope with stress

For FHA claims, the Rural Financial Counsellor (RFC) is authorised to sight, copy and certify a person’s original identity documents for the purpose of completing linkage with the customer, as part of the Identity Confirmation process.

he customer can consent to having their RFC attend meetings with them and their FHCO. This helps the RFC and FHCO to provide complementary support for the customer as they work towards improving their financial situation.

A person does not need to be in receipt of FHA to be referred to RFCS and access the RFCS services.

The Resources page includes a link to the Rural Financial Counselling Service Program.