Changes to the asset tests
Recent changes to the FHA assets tests means that certain assets, including water assets are now exempt for the purpose of the FHA assets tests.
Up to $1.1 million of the net value of water assets will be excluded when calculating the value of a farmer and their partner’s non-farm assets.
Need more information or help?
Call the DHS Farmer Assistance Hotline on 132 316 (8am – 8pm Monday to Friday).
DHS processes FHA applications and can help you to assess your situation.
Speak with your local Rural Financial Counsellor, financial advisor or accountant.
Don’t have a Rural Financial Counsellor? Find one near you at RFCS or call 1800 686 175.
See the FHA Guidelines
Farm Household Allowance (FHA) provides eligible farmers and their partners experiencing financial hardship with income support for up to three years.
FHA is designed to help recipients meet basic household needs and provides the opportunity to take steps to improve their circumstances.
While on FHA you may also claim up to $4 000 for activities that help you achieve financial independence by the end of your three years on payment.
FHA is delivered by the Australian Government Department of Human Services (DHS). Payments are made fortnightly, at a rate that aligns with social security allowances, such as Newstart Allowance (or Youth Allowance for those under 22 years of age).
You will also receive a Health Care Card as well as a range of other allowances such as Pharmaceutical Allowance and Rent Assistance.
If you leave Australia temporarily, you will only be paid while outside Australia for a negotiated period of up to six weeks.
eligible for Farm household Allowance, you must:
- be a farmer or the partner of a farmer
- be aged 16 years or older
- contribute a significant part of your labour and capital to a farm enterprise in Australia, or be the partner of a farmer who does
- meet income and assets tests
- meet residence requirements
- be willing and agree to comply with mutual obligations requirements ,and
- have received less than three years of Farm Household Allowance.
Please don’t self-assess your eligibility.
Depending on your circumstances, you may need to wait for a period of time before getting your first payment. However, if you are suffering severe financial hardship, please notify DHS, as some waiting periods may be waived.
Your income must be below the cut-off point for Newstart Allowance or Youth Allowance (whichever applies to your specific circumstances).
If you earn off-farm income, in some specific circumstances, that income may be deducted when calculating your entitlement under the income test.
A maximum of $80 000 of off-farm income can be offset against interest repayments if, among other things, your income or your partner’s income from your farming business for the relevant financial year is less than zero and you can substantiate that your loan contract cannot be renegotiated.
There are two parts to the asset test.
Part 1 - The non-farm and liquid assets test
The first part assesses the net non-farm and liquid assets you, your family and your business own. It has the same thresholds as national social security allowances. Liquid assets include cash in your personal and business bank accounts, term deposits, shares and other financial accounts.
As at 1 January 2017 the assets limits are:
- single recipients: $250 000 (homeowner); $450 000 (non-homeowner)
- partnered recipients: $375 000 (homeowner); $575 000 (non-homeowner).
Payment may be deferred when liquid assets are equal to or exceed $5 500 (single) or $11 000 (couple or single with dependants).
Part 2 – Total net assets test
The second part assesses your family's total net farm assets. The total must be below $2.55 million.
Example assets test
Joe is a single applicant who owns his own home. He has a total of $150 000 non-farm assets and funds which are readily available. As this is below the $202 000 threshold, he passes the first assets test.
* Note Joe’s home was excluded from this test.
Joe also has $2.95 million worth of farm assets and owes his lender $800 000; thus his net farm assets total is $2.15 million. As his net farm assets are below the $2.55 million threshold, he also passes the second assets test. Based on Joe’s non-farm and net farm assets, Joe passes the two part assets test.
Changes to the assets tests
Farmers and their partners can now apply or re-apply for the Farm Household Allowance (FHA) and receive concessional treatment for the value of certain assets, including water assets and shares in a marketing or processing entity.
Water asset changes
Up to $1.1 million of the net value of water assets that are held wholly or mainly for the purpose of the farm enterprise will be exempt when calculating the value of a farmer and their partner’s non-farm assets. Only that part of the water assets net value that exceeds $1.1 million will be included in the non-farm assets test.
Share asset changes
Generally shares in a marketing or processing entity (such as Murray Goulburn Co Ltd ) that a farmer needs to own in order to sell a product can be exempt. Holding/s in excess of the required shareholding/s cannot be exempt for the purpose of the assets test.
Asset hardship provisions
Where a person has substantial assets but cannot generate income from those assets and cannot rearrange their financial affairs, they may be eligible for asset hardship provisions.
Asset hardship provisions can give concessional treatment to farmers and their partners to allow them to have certain assets disregarded when calculating their rate of payment.
To qualify for hardship provisions a farmer or their partner must be:
- in severe financial hardship; and
- unable to sell or borrow against an asset.
A person is considered to be in severe financial hardship if:
- their readily available funds are equal to or less than:
- $13 975 (single with no children)
- $15 116.40 (single with children)
- $25 235.60 (couples combined)
- and they cannot reasonably be expected to sell or borrow against assets to improve their financial position.
If you believe that you could be eligible for asset hardship provisions please call the Farmer Assistance Hotline on 312 316, to start your claim for consideration under hardship provisions.
Mutual obligation requirements
Once DHS has assessed your initial application you may begin receiving FHA. In order to continue to receiving FHA, you need to complete a Farm Financial Assessment (FFA) and a Financial Improvement Agreement (FIA).
Farm Financial Assessment
The FFA is an assessment of the financial position of you, your partner and your farm. The government provides up to $1 500 towards the cost of a prescribed advisor completing the Farm Financial Assessment.
Financial Improvement Agreement
The FIA is a plan for you and your partner to work towards improving your capacity for financial self-reliance. DHS Farm Household Case Officers will work with you to ensure that your individual situation is taken into account and to help identify activities to help improve your situation.
To support you in undertaking the approved activities in the FIA, DHS provides access to an Activity Supplement of up to $3 000 over the three years of payment.
Recipients in their final (third) year of payment have access to an additional $1 000 for high value activities, where there is a demonstrated need. This may assist recipients to transition off the FHA and increase their focus on actions to improve their situation, including finding alternative sources of income/employment.
Applying for FHA
You can apply for FHA by:
The fastest way to apply for FHA is online. Alternatively, you can request a paper claim form by calling the Farmer Assistance Hotline on 132 316 or you can download a paper form
. Service Centres have self-service terminals available for farmers to access claim forms and telephones to contact the Farmer Assistance Hotline.
Farmers and their partners who require assistance with completing claim forms are encouraged to contact the Farmer Assistance Hotline on 132 316 or their local Rural Financial Counsellor.