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

All FHA customers must enter into a Financial Improvement Agreement (FIA) negotiated with their Farm Household Case Officer (FHCO).

The FIA lists the activities the customer agrees to undertake.

Customers granted an exemption from the activity test must still enter into an FIA but do not need to undertake activities in their FIA during the exemption period.

FHA activity test exemptions are only granted and applied by an FHCO.

To view current and previous activity test exemption details, in Customer First:

• Select CRN/BP hyperlink in header
• Select Circumstance Data tab
• Scroll down and select FHA Specific Overview
• Activity Test Relief assignment block (view only)

Exemptions may apply for the following reasons:

• essential farm activities, go to Step 2
• temporary incapacity due to illness or injury (medical certificate needed) go to Step 3
• pregnancy and childbirth, go to Step 4
• caring for ill or disabled children, go to Step 5
• domestic violence, go to Step 6
• Australian Defence Force Reserves, go to Step 7
• an exemption due to special circumstances, go to Step 8
• none of the above exemption reasons apply, go to Step 9

A farmer may be temporarily exempt from the activity test during periods of activity essential to the operation of the farm. This ensures the farmer is not prevented from running their farm business during times of intensive workloads. However, they still need to satisfy the activity test for the majority of their time on payment.

Some common examples of essential farm activities are:

• sowing and harvest for grain growers
• pruning and harvest on horticultural properties
• lambing, calving, and hand rearing or feeding of agricultural livestock

Exemption period

Must not exceed 6 weeks, and cannot be extended.

May only apply twice in a 12 month period, regardless of the length of the previous exemptions, or if FHA was paid during the period.

Go to Step 10

A customer may be granted a temporary incapacity exemption from the activity test if they are unable to participate in a suitable activity for 8 or more hours per week due to a medical condition, which is supported by medical evidence that they are unable to undertake any program of help or suitable activity.

Evidence

For temporary incapacity exemptions, the customer must provide a medical certificate completed by a medical practitioner. See Centrelink Medical Certificate (SU415 or SU683).

To assess and process the medical certificate, see Assessing and coding medical evidence for temporary incapacity exemptions.

Exemption period

For the period stated on the medical certificate, up to 13 weeks.

Further exemptions (also not exceeding 13 weeks) can be granted if the customer continues to meet all criteria for a temporary incapacity exemption and provides additional medical certificates.

If customer is seriously ill and undergoing treatment

Additional exemptions can be granted without an additional medical certificate in this case, until the person's exemption period reaches the period stated on their original medical certificate, up to 52 weeks from the date the first exemption was granted.

If the temporary incapacity extends beyond 52 weeks, the customer must provide an additional medical certificate and may be granted a further 13 week exemption. This exemption can also be extended without the need for an additional medical certificate, but the total period must not exceed 26 weeks. After the 26 weeks, all subsequent applications for temporary incapacity exemptions of up to 13 weeks must be supported by an additional medical certificate.

See the References page for a link to the Farm Household Allowance Guidelines for more details about exemptions for seriously ill customers.

Go to Step 10

A pregnant customer is exempt from the activity test from 6 weeks before the date they are expected to give birth until 6 weeks following the birth.

This exemption applies even if the child is stillborn or placed for adoption.

If at any other times during the pregnancy a customer is unable to meet their activity test requirements because of pregnancy-related medical problems, they should apply for an incapacity exemption.

Evidence

The customer must provide evidence of their pregnancy and expected date of delivery, such as a letter from a doctor or registered midwife. Evidence does not have to be a Centrelink medical certificate. Scan a copy of the evidence to the customer's record.

Exemption period

To determine the period of exemption calculate 6 weeks before the expected due date. The system will automatically calculate the exemption end date (start date plus 12 weeks). This may need to be extended if the pregnancy becomes overdue.

Go to Step 10

A customer can be granted an exemption from the activity test if they are the principal carer of a dependent child who has a disability, illness, mental health condition or physical condition and whose care needs prevent the customer from meeting the activity test.

Verification to support these circumstances is needed before an exemption can be granted.

Exemption period

Determine the period based on the customer's circumstances.

The initial exemption cannot exceed 12 months.

At the end of the exemption period, additional exemptions can be granted subject to a review of the child's care needs.

Go to Step 10

There are 2 circumstances when domestic violence or other family factors can be taken into account for activity test exemptions.

If the customer is the principal carer of 1 or more children and:

• the customer was subjected to domestic violence in the previous 26 weeks, the period of exemption must be 16 weeks
• there are special circumstances about the customer's family, there are no specific matters that limit when this may apply. Determine the period of exemption based on what is appropriate for the customer, but it cannot exceed 16 weeks. Additional exemptions of up to 16 weeks can be granted

Decisions about eligibility for this exemption and the exemption duration (after the initial 16 week period) should be based on recommendations made by a Services Australia social worker.

Go to Step 10

Customers are exempt from the activity test while attending a training camp as a member of the Australian Defence Force Reserves.

For an exemption to be granted, participation in a training camp must be verified by the equivalent of a signed training notice or signal notice. If a training notice is not issued a reservist must produce authorised documentary evidence of the training activity. If the activity cannot be verified as training, it should be regarded as service

If this service is:

• less than 35 hours per week, they can remain eligible for FHA and may have their activity test requirements reduced, income earned during this time is exempt from the income test
• more than 35 hours per week, they can remain eligible for FHA for up to 12 weeks during any 12 month period, income earned during this time is exempt from the income test. After 12 weeks (cumulative or continuous) service, they are considered to be undertaking full-time service. This activity must be included in the customer's FIA

A reservist who undertakes continuous full-time service is considered to be employed and all income earned during this time is taxable and subject to the income test.

Go to Step 10

An exemption can be granted if the FHCO is satisfied that:

• special circumstances exist that are beyond the customer's control, and
• in these circumstances it would be unreasonable to expect the person to satisfy the activity test

If the circumstances impede, rather than prevent, a customer from meeting their usual requirements, first consider adjusting or reducing these requirements in preference to exempting them from the activity test completely.

Examples of special circumstances:

• major personal disruption to the recipient's home (default exemption period of 2 weeks)
• major personal crisis, including homelessness (default exemption period of 4 weeks)
• affected by declared natural disaster, for example, bushfire, flooding or cyclone
• temporary caring responsibilities
• dad and partner leave
• undertaking jury duty
• being a newly protected witness
• being a newly arrived refugee
• volunteering during a state or national emergency
• undertaking Indigenous cultural business

Exemption period

Must not exceed 13 weeks, and cannot be extended.

See the References page for more information about special circumstances in the Guide to Social Security Law, 3.11.5.20.

Go to Step 10

A customer may be granted an activity test exemption if, having regard to all the relevant factors that are not covered by the exemption reasons listed above, it would be unreasonable to expect the customer to satisfy the activity test for that period.

An exemption should be granted in this case only when all other options have been exhausted (in terms of reducing or adjusting requirements in the FIA) and there is a reasonable expectation that activity relief should be applied.

Some examples are:

• the location of the Services Australia Service Centre
• difficulties with transport and communication
• educational, cultural or religious background of the customer

Has the customer provided evidence to support the request for an exemption?

• Yes, see Table 2
• No, request the customer provide evidence appropriate to the reason they are seeking an exemption

If the customer may be eligible for an activity test exemption

Tell the customer:

• to provide evidence appropriate for the reason they are seeking an exemption must be provided before an exemption can be considered
• to contact their FHCO for the exemption request to be assessed

Has the customer provided evidence to support the request for an exemption?

• Yes, see Table 2
• No, request the customer provide evidence appropriate to the reason they are seeking an exemption

An exemption may be granted by the FHCO for the following reasons:

• essential farm activities
• temporary incapacity due to illness or injury (medical certificate needed)
• pregnancy and childbirth
• caring for ill or disabled children
• domestic violence
• Australian Defence Force Reserves
• an exemption due to special circumstances, or
• if circumstances are not covered in the above exemption reasons, it would be unreasonable to expect the customer to satisfy the activity test for that period

Does the evidence supplied support the decision for an exemption to be granted?

• Yes, for:
• for Temporary Illness/Injury and Serious Illness exemptions, go to Step 2
• for all other exemption reasons, go to Step 3
• No, go to Step 4

Activity test exemptions for reasons Temporary Illness/Injury and Serious Illness can only be applied by manually coding the Medical Certificate (MC) screen in Customer First.

The Medical Certificate guided procedure is unable to be used to code medical certificates for FHA customers.

For help with coding the fields on the MC screen see Assessing and coding medical evidence for temporary incapacity exemptions.

After the medical certificate coding has been finalised, the data will be replicated to SAP.

Go to Step 5

If the customer has been granted an activity exemption for a reason other than Temporary Illness/Injury and Serious Illness, code the exemption using Process Direct:

• open the customer record
• go to the Farmer Activity Test Relief (FATR) screen

To add a new exemption, select:

• Add to insert a new entry and update:
• the relevant Activity Reason
• start date - the start of the exemption
• end date - the end of the exemption
• FHA from the Activity Test Type Code drop down menu
• Save

To edit a previous exemption:

• select Edit next to the line that needs correction
• Update the relevant data
• select Save

Review the details and finalise the update:

• select Assess
• Update in the Update Header Data screen:
• Receipt Date - the date the customer notifies
• Channel - the channel the information was received
• select Save

Go to Step 5

Tell the customer they cannot be granted an exemption/ further exemption under the FHA guidelines.

Tell the customer that if they fail to undertake the activities as agreed in their FIA, and they do not have a reasonable excuse, it will result in a Qualification Failure. If this occurs, their FHA payments will stop until they do comply. See Qualification failures table.

Procedure ends here.

Tell the customer:

• the period the exemption applies for
• they will need to undertake the activities in their FIA when the exemption ends
• if they are still unable to undertake their activities they should contact their FHCO to seek a further exemption or renegotiate their FIA

Record the details of the exemption in the customer's Case Notes. Note: if a non-sensitive case note is recorded, this will leave a started DOC on the AL screen. The DOC will need to be manually closed.

Check an End of Activity Test Relief Review activity has been created, go to Step 6.

When a new relief period is recorded and saved, an End of Activity Test Relief Review activity is created.

Reason Code, and Start and End Dates will be auto-populated. The activity will be linked to the FHA Benefit Case and assigned to the employee responsible (FHCO).

If an existing relief period is extended or corrected, the existing End of Activity Test Relief Review activity will be updated to reflect changes to the relief period start/end dates.

To check an End of Activity Test Relief Review activity has been created, in the customer's record in Customer First, select:

• CRN/BP to display the customer summary
• Farm Household Allowance case from the Cases tab
• Activities tab - the view may need to be expanded to find the End of Activity Test Relief Review activity

To change the status of End of Activity Test Relief Review activities, select:

• End of Activity Test Relief Review hyperlink
• Edit
• Completed from the Activity Status drop down menu
• Save and Back

Procedure ends here.

To monitor the End of Activity Test Relief Review activities:

• go to Workspace > Social Services - Benefit Management > Search Activities
• on the Search Activities page:
• Activity Type: select End of Activity Test Relief
• Status: select Open
• Business partner ID: select the pop-up and enter details of the FHCO employee (AGS number)
• select Search

The status of End of Activity Test Relief Review activities changes to due 7 days before the exemption end date.

To change the status of End of Activity Test Relief Review activities, select:

• Activity ID hyperlink
• Edit
• Completed from the Activity Status drop down menu
• Save and Back

Procedure ends here.

An FHA customer may be subject to a qualification failure if they:

• fail to enter into a Financial Improvement Agreement (FIA) as requested in writing, or
• fail to undertake an activity within the timeframe specified in their FIA

A qualification failure must be imposed and payment suspended if the FIA is not negotiated and returned within the relevant due dates.

Progress against the activities in the FIA will be monitored. Customers should notify their FHCO as they complete the activities in their FIA. Additionally, FHCOs schedule an appointment to review the customer's FIA at least every 13 weeks. If an activity is not completed by the due date, a failure may be recorded and payment suspended.

To view the FIA, in Process Direct:

• Key START into the Super Key
• Select FHA FIA Workflow from the Task Selector

For information on conducting the review, see Financial Improvement Agreements (FIA).

• To determine if a qualification failure was committed, go to Step 2
• To record a customer complying and resolve a failure, go to Step 5
• To resolve a failure applied in error, go to Step 7

Consider if:

• the customer had a reasonable excuse for the failure, and
• they either notified Services Australia at the start of the activity or it would have been unreasonable for them to have notified the agency in the circumstances

When considering if they had a reasonable excuse, consider if, at the time of the failure, the customer:

• needed to undertake farm work that was unforeseen critical and not the kind of farm work the person would normally undertake at that time
• needed to take on unforeseen family or caring responsibilities
• did not have access to safe, secure and adequate housing
• was using emergency accommodation or a refuge
• had literacy and language skills that affected the conduct of the person resulting in the failure
• had a disability, illness, mental health condition or physical condition
• experienced a drug or alcohol dependency
• was subjected to violence
• was adversely affected by the death of an immediate family member or close relative
• had been imprisoned for more than 14 days and was released not more than 28 days before the time of the failure

If none of the above circumstances apply, it is reasonable to determine that a qualification failure has been committed and must be applied

See the References page for a link to the Farm Household Support Secretary's Rule 2024 and the Guide to Social Security Law, 3.1.13.90, Reasonable Excuse.

Did the customer commit a qualification failure?

• Yes, go to Step 4
• No, go to Step 3

Do not record the failure activity. No further action is needed.

Record details of the decision on a DOC.

Consider if:

• an exemption from the activity test should be granted, see Exemptions from activity test table
• they should contact their Farm Household Case Officer (FHCO) to negotiate or renegotiate their FIA

Procedure ends here.

To record a qualification failure, in Process Direct:

• key START into the Super Key and select FHA FIA Workflow from the Task Selector
• select Add on FIA Activities tab
• select the Type as Failure Activity
• select the appropriate option from the Failure Reason
• complete the details for the failure activity, including relevant dates
• select the Failure Status as Active
• select Save

This will auto generate a Social Services Plan (SSP) to suspend payment from the date the failure was applied. The SSP must be approved to finalise the suspension. See Suspending, cancelling and restoring Farm Household Allowance (FHA).

If the payment is not suspended after approval, escalate to ICT. See the Resources page for a link to mySupport.

Tell the customer that if they comply:

• within 13 weeks of the suspension date, FHA will be restored from the date the customer complies. Note: FHA will not be back paid
• more than 13 weeks after the suspension date, FHA will be cancelled and they will need to reclaim FHA to receive payments

Record details on a DOC.

The customer must be advised of the decision.

Does the customer want to apply for a formal review of decision to impose a qualification failure?

• Yes, go to Step 8
• No, procedure ends here

Has the customer complied with their activity test requirements within 13 weeks of the suspension?

• Yes, go to Step 6
• No, Payment must be cancelled by FHCO. See Suspending, cancelling and restoring Farm Household Allowance (FHA).The customer will need to re-claim FHA

Procedure ends here.

To record if a customer complied, in Process Direct:

• key START into the Super Key
• select FHA FIA Workflow from the Task Selector
• select Edit on Failure Activity
• enter Complied Date: this is the date the customer complied with their FIA requirements. Note: if the Complied Date is not entered, the customer will be paid zero rate from the date the failure was applied
• update activity status to Resolved
• select Save

Restore the customer's FHA payment using the change process. See Suspending, cancelling and restoring Farm Household Allowance (FHA).

FHA entitlements will resume from the date the customer complied, for example, the date entered into an FIA or started an activity as agreed in the FIA. No arrears should be generated for the period where they did not comply with their mutual obligations.

Procedure ends here.

There may be instances where the customer has complied with their FIA requirements before the due date but a failure is still applied. This could occur because of delays in updating the customer's record.

If the failure has been applied in Process Direct after the customer complied:

• key START into the Super Key
• select FHA FIA Workflow from the Task Selector
• select Edit on Failure Activity
• update activity status to Cancelled
• select Save

Restore the customer's FHA payment using the change process. See Suspending, cancelling and restoring Farm Household Allowance (FHA).

Procedure ends here.

Reviews and appeals for FHA are conducted under social security law. See Initial contact about a decision and the review of decision process.

Customers can apply for a formal a review of the decision to impose a qualification failure and may be eligible for payment pending the review. See Payment pending review table.

An FHA customer may be subject to a conduct failure if they:

• commit misconduct while undertaking an activity agreed in their FIA
• refuse or fail to accept an offer of suitable work if they had agreed to seek work as an activity under their FIA
• are unemployed as a result (directly or indirectly) of their voluntary act
• are unemployed as a result of their misconduct as an employee

See the References page for relevant policy and legislation links.

Go to Step 2

Consider if:

• the customer had a reasonable excuse for the failure, and
• they either notified Services Australia at the start of the activity or it would have been unreasonable for them to have notified the agency in the circumstances

Need to contact a third party such as the customer's employer?

When considering if they had a reasonable excuse, consider if, at the time of the failure, the customer:

• needed to undertake farm work that was unforeseen and critical and not the kind of farm work the person would normally undertake at that time
• needed to take on unforeseen family or caring responsibilities
• did not have access to safe, secure and adequate housing
• was using emergency accommodation or a refuge
• had literacy and language skills that affected the conduct of the person resulting in the failure
• had a disability, illness, mental health condition or physical condition
• experienced a drug or alcohol dependency
• was subjected to violence
• was adversely affected by the death of an immediate family member or close relative
• had been imprisoned for more than 14 days and was released not more than 28 days before the time of the failure

See the References page for a link to the Farm Household Support Secretary's Rules 2024 and the Guide to Social Security Law, 3.1.13.90, Reasonable Excuse.

Go to Step 3

• Yes, go to Step 5
• No, go to Step 4

Do not record the failure activity. No further action is needed.

Record details of the decision on a DOC.

Consider if:

• an exemption from the activity test should be granted, see Exemption reasons table
• they should contact their Farm Household Case Officer (FHCO) to negotiate or renegotiate their FIA

Procedure ends here.

To record a conduct failure, in Process Direct:

• key START into the Super Key
• select FHA FIA Workflow from the Task Selector
• select Add on FIA Activities
• select the Type as Failure Activity
• select the reason for the failure from Activity Reason
• complete the details for the failure activity, including relevant dates
• select the Failure Reason as Active
• select Save

When the failure category is set to 'Conduct', the system will automatically generate an 8 week non-payment period beginning from the date of the failure.

Confirm that the Social Services Plan (SSP) shows not entitled and check date of effect (should be date decision was made). If the non-payment period is not automatically generated, escalate to ICT. See the Resources page for a link to mySupport.

Would the customer suffer severe financial hardship if the 8 week non-payment period was applied?

• Yes, go to Step 7
• No, an 8 week non-payment period will automatically be applied, starting from the date the decision is made. During the 8 week non-payment period:
• FHA remains current at zero rate
• add-on payments are not payable, for example, Rent Assistance
• the customer retains access to an automatic Health Care Card
• an end date 8 weeks from the date of decision will be recorded on the system
• Record details on a Note/DOC
• Make sure the customer is advised of the decision, go to Step 6

Reviews and appeals for FHA are conducted under social security law. See Initial contact about a decision and the review of decision process.

Customers can apply for a formal a review of the decision to impose a conduct failure and may be eligible for payment pending review of the decision. See Payment pending review table.

The conduct failure activity must have a status of Active before the non-payment period can be waived.

To record a waiver for the 8 week non-payment period due to severe financial hardship, in Process Direct:

• key START into the Super Key
• select FHA FIA Workflow from the Task Selector
• select Edit on relevant Failure Activity
• update Zero rate end date to waiver date less 1 day
• set the failure activity status to Waived
• select Save

This will trigger a reassessment and generate a follow up Social Service Plan (SSP).

Approve the SSP.

Procedure ends here.

If an FHA customer applies for a formal a review within 13 weeks of the decision to impose a qualification failure, payment may continue pending the outcome of the review.

To record payment pending review, in Process Direct::

• key START into the Super Key
• select FHA FIA Workflow from the Task Selector
• select Edit on relevant Failure Activity
• update Qualification failure end date to review date less 1 day
• select Save

A reassessment will be triggered and follow-up SSP generated.

Check FHA benefit status is current.

Approve the SSP.

Payment will restart from the date the original decision was imposed.

If the formal review of decision outcome is:

• successful, go to Step 3
• unsuccessful, go to Step 4
• modified, go to Step 5

If an FHA customer applies for a formal review within 13 weeks of the decision to impose a conduct failure, payment may continue pending the outcome of the review.

To record payment pending review, in Process Direct:

• key START into the Super Key
• select FHA FIA Workflow from the Task Selector
• select Edit on relevant Failure Activity
• update PPR Start Date to date review was requested
• the End date will be automatically updated to 1 day less than the PPR Start Date
• select Save

A reassessment will be triggered and follow-up SSP generated.

Check FHA benefit status is current.

Approve the SSP.

Payment will restart from the date the original decision was imposed.

If the formal review of decision outcome is:

• successful, go to Step 3
• unsuccessful, go to Step 4
• modified, go to Step 5

If the decision is overturned:

• key START into the Super Key
• select FHA FIA Workflow from the Task Selector
• select Activities tab
• select Edit on relevant Failure Activity
• update Cancel-Appeal outcome status
• select Save

A reassessment will be triggered and follow up SSP generated.

Approve SSP.

The failure will be considered invalid and the customer will be back paid to the date of the suspension/non-payment period.

Procedure ends here.

If the decision is upheld the activity status will remain Active:

• key START into the Super Key
• select FHA FIA Workflow from the Task Selector
• select the Activities tab
• select Edit on relevant Failure Activity
• check that the failure activity status is Active

To track the review history:

• mark the previous zero rate entry as invalid
• insert another entry with proper zero rate period
• Start Date = date of failure
• End date for qualification failure = '31.12.9999'
• End date for conduct failure = start date plus 8 weeks
• select Save

A reassessment will be triggered and follow-up SSP generated.

Approve SSP.

Procedure ends here.

For multiple appeals applications for formal review of decision:

• key START into the Super Key
• select FHA FIA Workflow from the Task Selector
• select Edit on relevant Failure Activity
• mark the previous zero rate entry as invalid
• insert another entry with modified zero rate decision period
• select Save

A reassessment will be triggered and follow up SSP generated.

Approve SSP.