Skip to navigation Skip to content

Rate and payment of Farm Household Allowance (FHA) 002-03030000

Expand/Collapse all sectionsExpand all


FHA rate calculation - example for single customer

Table 1: Rates used in this example were current 20 March 2020.

These amounts may not be current. They are examples only. For current payments, see Rates and thresholds.

Step

Action

1

Customer circumstances

Age: 28

Relationship status: single

Dependent children: no

Accommodation: not paying rent

Income

Business: farming sole trader

$10,000 (annual)

Business: non-farming sole trader (cleaning services)

$1,500 annual

Foreign Income:

$US 1,000 (monthly)

Employment income:

$150 (weekly)

Farm estimate

$0.00 annual

Financial assets

Savings: everyday account

$7,500

Beneficiary Loan:

$200,000

Shares

$15,000

2

Identify assessable income

Exclude:

  • Business: farming sole trader
  • Deeming from beneficiary loan

Include:

  • Business: cleaning services
  • Deemed income on savings and shares
  • Foreign income
  • Farm estimate

3

Customer's total daily income

Business: cleaning services: $1,500 / 365.25 = $4.1068

Foreign income (converted to $AU): $1,356.48 / 30.4375 = $44.5661

Employment income: $150 / 7 = $21.4286

Farm estimate: $0.00

Deemed income:

Financial assets total below threshold = $22,500

Multiplied by deeming rate 1%

Deemed income total = $225 per year

Daily deemed income amount = $225 / 365.25 = $0.6160

Total:

$4.1068 + $44.5661 + $21.4286 + $0.00 + $0.6160 = $70.7175

4

Customer's daily income test reduction

The income free area and income threshold must also be converted to a daily amount.

As total daily income is more than the daily income threshold, the reduction is the sum of:

(256 / 14 - 106 / 14) X 50% = $5.36

plus ($70.7175 - 256 / 14) X 60% = $31.4565

Total: $31.46 (rounded to 2 decimal places)

5

Daily maximum rate

FHA: $565.70 / 14 = $40.41

Energy Supplement: $8.80 / 14 = $0.6286

6

Calculate customer's rate

Subtract daily income test reduction from daily maximum rate.

Daily FHA: $40.41 - $36.90 = $3.51

Daily CES = $0.2507

Before 11 June 2020, the customer would be entitled to a part daily rate of $3.51.

From 11 June 2020, all FHA customers receive the maximum rate of payment if their payment is greater than zero dollars after the income test is applied. Their daily rate would be $40.41.

FHA rate calculation - example for partnered customer

Table 2: Rates used in this example were current 20 March 2020.

These amounts may not be current. They are examples only. For current payments, see Rates and thresholds.

Step

Action

Historical information

Before 21 June 2018, the partner maximum daily rate calculation incorrectly included PHA for all partnered customers. A system release resolved this issue on 21 June 2018.

When calculating rates of FHA before 21 June 2018, PHA must be included as a maximum daily rate component, regardless of whether or not it was listed in Entitlement Items at the time.

From 21 June 2018, PHA only needs to be included in the maximum daily rate calculation for those customers who are receiving it, as listed in Entitlement Items.

1

Customer circumstances

Age: 50

Marital Status: married (separated by illness), partner aged 58 in receipt of FHA

Dependent children: aged 8, 15 and 18

Accommodation: homeowner (lives in remote location)

Income

Business: farm (from REBS screen)

$5,000 (annual) - 50% customer, 50% partner

Business: non-farming (cleaning services)

$15,000 (annual) - 25% customer, 25% partner

Other government payment

$150 (fortnight) - 100% customer

Employment income:

$800 (IOP) - 100% partner

Farm estimate

$5,000 annual - 50% customer, 50% partner

Financial assets

Savings

$7,500 (50% customer, 50% partner)

Shares

$100,000 (25% customer, 75% partner)

Gifts

$20,000 (50% customer, 50% partner)

2

Identify assessable income

Exclude:

  • Business: farm (from REBS screen)

Include:

  • Business: cleaning services
  • Deemed income on savings, shares and gifts
  • Farm estimate
  • Partner's employment income

3

Total daily income

Deemed income for customer

Savings, shares, gifts

$3,750 + $25,000 + $10,000 = $38,750

$38,750 X 1% = $387.50 annually

Deemed income for partner

Savings, shares, gifts

$3,750 + $75,000 + $10,000 = $88,750

Below threshold: $40,300 X 1% = $403

Above threshold: ($88,750 - $40,300) X 3% = $1,453.50

Total: $2,244.00 annually

Daily income for customer

  • Deemed income:
    $387.50 / 365.25 = $1.609
  • Business (cleaning)
    $3,750 / 365.25 = $10.2669
  • Other government payment
    $150 / 14 = $10.7143
  • Farm estimate
    $2,500 / 365.25 = $6.8446

Total: $28.8867

Daily income for partner

  • Deemed income:
    $1,856.50 / 365.25 = $5.0828
  • Business (cleaning)
    $3,750 / 365.25 = $10.2669
  • Employment income
    $800 / 14 = $57.1429
  • Farm estimate
    $2,500 / 365.25 = $6.8446

Total: $79.3372

4

Customer's daily income test reduction

The income free area and income threshold must also be converted to a daily amount.

As the customer's total daily income is more than the daily income threshold, the reduction is the sum of:

(256 / 14 - 106 / 14) X 50% = $5.36

plus ($28.8867 - 256 / 14) X 60% = $6.36

Total: $11.72 (rounded to 2 decimal places)

5

Daily maximum rate

FHA: $612.00 / 14 = $43.71

Energy Supplement: $7.90 / 14 = $0.5643

6

Partner excess income

Partner's daily maximum rate:

FHA: $612.00 / 14 = $43.71

Energy Supplement: $7.90 / 14 = $0.5643

Total: $44.2743

Partner's income cut-off:

Partner income free area (daily rate): 1124/14 = 80.2857

Partner daily income (daily rate): 1850/14 = 132.1429

Partner income excess: 132.1429-80.2857 = 51.8572

Partner affecting income: 51.8572 x 0.60 = 31.1143

As partner daily affecting income is below the FHA daily rate it has no impact on customer rate.