Farm Household Allowance and the reconciliation of 2014–15 debts

​​​​​​​Farm Household Allowance (FHA) provides eligible farmers and their partners Australia-wide up to three years income support in times of financial hardship to help meet basic household needs. It provides a chance for farm families to take steps to improve their circumstances.

The amount of FHA you receive depends on your income. To be eligible for FHA, your income must be below the allowable income limits.

Business Income Reconciliation

Reconciliation is an end of financial year comparison between your estimate of business income and your actual business income. The purpose of reconciliation is to make sure you receive the correct payments under FHA.

At the end of each financial year you are required to supply your tax returns and financial statements to the Australian Government Department of Human Services (DHS) to determine your actual business income. You would have received a letter in June 2016 advising of the steps that needed to be taken.

Your business income will be reconciled against your estimated business income to determine the appropriate reconciliation outcome. Reconciliation will result in one of three outcomes:

  • You have received the correct payment and no further action is required; or
  • You have not been paid your full entitlement for the financial year and a top-up payment will be made to your nominated bank account; or
  • You have been overpaid and a debt will be raised in your name for repayment.

Failure to provide tax returns and/or financial statements

If you do not provide your tax returns and/or financial statements to DHS when required, the payments that you received in that financial year will be raised as a debt and your ongoing fortnightly payments may be suspended.

Even if you are no longer receiving FHA, you must still supply your tax returns and financial statements to DHS.

If you have received an extension to lodge your tax return from the ATO, please contact DHS to advise that an extension has been granted.

Need for reconciliation

Farm business income is difficult to forecast. It can only be determined when farm business income is received and the production costs can be deducted.

To account for this difficulty, an estimate of business income is used to assess your eligibility for FHA payments.

Reconciliation ensures that you have been paid the amount you are entitled to under FHA.

The reconciliation process

1. Estimating farm business income

When you apply for FHA, you will be asked to estimate your business income for the current year. Income from other sources, such as employment, can continue to be declared as it is earned.

You can update your estimate of farm business income at any time during the year. Changes to your estimate may affect your rate of payment.

You must notify DHS of any change of circumstances within 14 days of the change.

2. Supplying income tax returns and financial statements

At the end of the financial year, you will be required to supply your personal and business tax returns and financial statements to DHS. This requirement applies even if you are no longer receiving FHA.

3. Reconciling actual business income against estimated income

Your tax returns and financial statements will be used to assess your actual business income for the year in order to calculate the amount you were entitled to be paid under FHA. This amount is then compared to the amount you were actually paid to determine the appropriate reconciliation outcome. Reconciliation will result in one of three outcomes:

  • You have received the correct payment and no further action is required; or
  • You have not been paid your full entitlement for the financial year and a top-up payment will be made to your nominated bank account; or
  • You have been overpaid and a debt will be raised in your name for repayment

Reconciliation of payments will only occur for the times of the year when you received FHA. Any periods where you were not receiving FHA will not be included in the adjustment.

One-off waiver of 2014–15 FHA reconciliation debts

A provision has been made for a one-off waiver of 2014–15 FHA reconciliation debts to help recipients cope with their financial pressures as they learn to understand and respond to the requirements of the reconciliation process.

The waiver will not be repeated in future years. If you receive FHA, you should make sure you keep DHS informed of any changes in your financial circumstances to avoid incurring any future debt.

Where business income estimates are unreasonable or there is evidence of deliberate and evasive non-compliance with a notice, the waiver will not apply.

Received an extension to lodge your tax return?

If you have received an extension to lodge your tax return from the Australian Taxation Office, please advise DHS immediately.

Repaying owed amounts

A provision has been made for a one-off waiver of FHA reconciliation debt incurred in the 2014-15 financial year. This is a one-time only waiver and will not be available in future years.

Where business income estimates are unreasonable or there is evidence of deliberate and deceitful non-compliance the waiver will not apply.

In future years, if you need to repay an amount based on reconciliation, you will receive an Account Payable notice advising you of the amount. You will have to repay the amount using one of the repayment options in the notice. You may want to contact DHS to discuss repayment options or your review and appeal rights.

If you need to repay an amount, you can continue to receive FHA so long as you remain eligible.

More information or help

Call the Farmer Assistance Hotline: 132 316
Visit humanservices.gov.au/farmhouseholdallowance
Speak to your Financial Advisor or Rural Financial Counsellor
Read the FHA Guidelines at agriculture.gov.au/fha

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