Mutual obligations, failures and exemptions from the activity test for Farm Household Allowance (FHA) customers 002-02070000

From 11 June 2020:

• Financial assessors undertaking the Farm Financial Assessment (FFA) need to have appropriate qualifications or expertise. This includes Rural Financial Counsellors (RFC)
• Financial assessors do not need to be a member of a professional body
• If a customer elects to have an RFC complete their FFA there will not be any fee charged
• The activity supplement:
• will be increased to $10,000 and is a lifetime cap
• will not be reset if there is a change to the customer’s FHA clock days
• can be used to pay for reasonable travel and accommodation costs associated with an activity
• There is no longer an additional activity supplement

Customers eligible for FHA may be asked to submit a Farm Financial Assessment (FFA). Their FHA will cancel if the FFA is not provided as requested. An FFA supplement is available to help with the cost of preparing the FFA.

From 11 June 2020, the person preparing the FFA is a financial assessor who has appropriate qualifications or expertise to conduct the assessment. A financial assessor does not need to be a member of a professional body.

FHA customers need to undertake activities aimed at helping them to improve their financial self reliance. They are supported by their Farm Household Case Officer (FHCO), who will help them decide on the best mix of activities they can undertake to achieve financial independence before the end of their FHA entitlement.

Customers must enter into a Financial Improvement Agreement (FIA), which they negotiate with their FHCO. The FIA includes the activities the customer agrees to undertake in order to improve their capacity to generate income and achieve financial independence. An activity supplement can be paid to partially or fully cover the cost of an activity in the customer's FIA. From 11 June 2020, customers can access the activity supplement to pay for reasonable travel and accommodation costs associated with the activity.

If granted an exemption from the activity test, the customer must still enter into an FIA. They will be deemed to have met the activity test during the exemption period. Failure to undertake agreed activities, meet agreed timeframes or misconduct without a valid exemption will result in a failure being imposed, which will affect their payment.

At least once every 13 weeks, the FHCO will review how the customer is meeting the requirements of their FIA and if necessary renegotiate the FIA with the customer.

To ensure that customers are taking action to improve their situation while receiving FHA payments customers are subject to an activity test to make sure they meet their obligations as agreed in their Financial Improvement Agreement (FIA).

Unlike JobSeeker Payment (JSP), there is no requirement for FHA customers to undertake activities for a minimum number of hours to satisfy the activity test. This recognises the substantial workload of running a farm.

Customers need to notify the agency within 14 days if they are unable to comply with their activity test requirements.

If a customer does not have an exemption or a reasonable excuse, failing to meet their obligations can result in a:

• qualification failure if they do not enter into or comply with the terms of their FIA. Payments will be suspended until the customer complies with the requirement. If the customer does not comply within 13 weeks, payment will be cancelled
• conduct failure, for example due to misconduct while undertaking an activity in their FIA, or becoming unemployed due to misconduct. An 8 week non-payment period will be applied. This may be waived if it would cause the customer severe financial hardship

A customer may continue to be paid due to severe financial hardship pending review in certain circumstances.

An exemption from the activity test for FHA customers may be granted for the following reasons:

• essential farm activities
• temporary incapacity due to illness or injury
• pregnancy and childbirth
• Australian Defence Force Reserves service or training
• domestic violence
• care of disabled children
• special circumstances where the Farm Household Case Officer (FHCO) is satisfied the circumstances are beyond the customer's control and/or it would be unreasonable to expect the customer to satisfy the activity test

The maximum period of the exemption varies depending on the reason.

The Process page has more details about each exemption reason.

The Rural Financial Counselling Service (RFCS) provides free, independent and confidential help to eligible farmers to help them better understand their financial situation. They offer a range of services and information to support customers assess their business finances, and plan for the future. They help customers to access government and industry programs as well as help with short term issues like negotiating loans, debt mediation and succession planning. They can even help customers prepare and lodge claims for FHA. A Rural Financial Counsellor (RFC) is authorised to sight, certify and copy original documents and complete linkage as part of the Identity Confirmation process.

The RFCS can also help customers access professional services to help them manage and cope with stress. From 11 June 2020, the RFCS can undertake the FFA for customers.

Customers may consent to have their RFC attend meetings with them and their Farm Household Case Officer (FHCO). This will make sure they receive support from both services that complement each other as the customer works to improve their financial situation.

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

Wherever possible, customers will also be linked with an RFC who will need to have Person Permitted to Enquire (PPE) authority.