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Drought household assistance explained

Lisa Herbert, Thursday March 6, 2014 - 09:29 EDT
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Ewes and lambs grazing on remnants of a 2012 crop of chick peas near Walgett NSW. No crops have been planted since because of drought. - ABC

Farmers are being discouraged from assessing their own suitability for household support under the Federal Government's drought package.

The start date for the (FHA) was brought forward to March 3; it was previously scheduled to begin in July.

It replaces the Transitional Farm Family Payment and has more generous thresholds.

Up to $900 per fortnight is available for drought-affected farming couples most in need.

Farmers with net assets of $2.55 million will be able to apply for the Interim FHA, and off-farm assets for a married farmer can't exceed $279,000.

The family home is exempt.

David Green, a project officer with the Department of Human Services, is urging farmers not to think they won't be eligible.

"Each individual's circumstances are different.

"It's always in their best interests to lodge a claim.

"We'll be in touch with them to work out with them if they're eligible for the payment."

A farmer assistance hotline13 23 16 is operational Monday to Friday 8am to 8pm.

The Department of Human Services answered ABC Rural's questions about the allowance's eligibility requirements:

What is classified as an asset?

The Interim FHA will have a two tier asset test, comprising a non-farm asset test and farm asset test.

Any farm asset is assessed under the $2.55 million net asset limit and includes all assets essential to the running of the farm business.

The principal home is exempt from the asset calculation but a second or subsequent dwelling on the property is considered a farm asset.

A mob of cattle, stored grain, and any vehicles used to operate the farm are assets.

David Green says the value of an asset is "whatever the value of the asset is at the time of your claim if you were to sell it."

Total net off-farm or liquid assets mustn't exceed the relevant social security threshold. For a farmer who has a partner, the relevant threshold is currently $279,000.

"Those assets are personal assets that a person has, such as personal contents, a motor vehicle that you might use only for personal use, money in bank accounts, and personal shares," said Mr Green.

The thresholds are indexed to CPI and differ depending on whether the recipient is partnered or is a homeowner.

"If you're single and you're a homeowner, you'll have a certain threshold. If you're a couple and you're a homeowner, you would have a higher threshold.

"The threshold is based on the personal circumstances of the person claiming."

How much assistance is available?

Interim FHA will be paid at a fortnightly rate equivalent to Newstart Allowance (or Youth Allowance if a recipient is under 22). For a partnered homeowner, the amount of the payment is $452.30 per fortnight.

The payment rate is indexed to CPI and differs depending on whether the recipient is partnered or is a homeowner.

The payment is also subject to an income test. If, for example, a farmer has additional off-farm income the Department would take that into account when calculating the correct rate of payment for that person.

"If somebody is single and 21, the maximum payment they would receive is $501," said the Department of Human Service's David Green.

"If you're a partnered couple then you would receive $452.30 each. So that would be a maximum combined amount of $904.60 being paid to the applicant."

Income test

Both on and off-farm income is assessed under the income test.

Once a recipient earns over a certain amount, the amount of their payment is reduced.

That is, recipients can earn up to $62 (gross) before payment is reduced; income between $62 and $250 reduces payment by 50 cents per dollar; and income above $250 reduces payment by 60 cents per dollar.

The cut-out points varies for individuals depending on their circumstances. A couple who are both receiving the Interim FHA will not get a payment in a fortnight if their income reaches approximately $1,700.

For the purposes of the income test, in certain circumstances, a recipient may be able to deduct off-farm income earned against interest payable on their farm debt.

The purpose of this measure is to ensure that only income genuinely available to a recipient for their self-support is actually counted as income.

How long will it last?

The Interim FHA will be replaced by the new Farm Household Allowance on 1 July 2014. Legislation to implement the permanent FHA will be introduced to the Parliament shortly.

The Department of Human Services says funding for this measure is uncapped, meaning it will be available to anyone meeting the eligibility criteria.

"It is demand driven. We're here to provide assistance to all those farmers in need who lodge a claim," said David Green.

To apply or discuss their options, farmers in need should contact the Farmer Assistance Hotline (Department of Human Services) on 13 23 16 between 8am and 8pm, Monday to Friday.

The Interim FHA claim form and eligibility guidelines are available .


© ABC 2014

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