FHA questions and answers

​​​General questions and answers


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What is the Farm Household Allowance?

The Farm Household Allowance provides eligible farmers and their partners who are experiencing financial hardship with assistance and support to improve their long-term financial situation.

The allowance is paid fortnightly at a rate equivalent to Newstart Allowance (or Youth Allowance for those under 22 years). A Health Care Card will be provided to recipients. Support is also provided through a dedicated case manager to help recipients assess their situation and develop a plan for the future.

Eligible farmers and their partners are able to access up to three years of payment. This is designed to give farm families time to get back on their feet and the opportunity to take steps to improve their circumstances.

Who will qualify for the Farm Household Allowance?

To qualify, among other things a farmer must:

  • be aged 16 years or older
  • have a right or interest in the land used for the purpose of a farm enterprise
  • use the land wholly or mainly for the purpose of the farm enterprise
  • use the land for the purposes of the farm enterprise and that land is in Australia
  • have a farm enterprise with a ‘significant commercial purpose or character’
  • contribute significant labour and capital to the farm enterprise
  • be an Australian resident and be in Australia
  • be willing to enter into a financial improvement agreement
  • satisfy an income test and an assets test
  • must have a cumulative period of Farm Household Allowance that is 3 years or less (if the farmer has been entitled to FHA in the past).

There are separate criteria for partners of farmers (if they do not qualify as a farmer in their own right). These criteria do not include the same labour test, but are otherwise similar. The Farm Household Allowance guidelines provides more information on these eligibility criteria.

Without assessing an applicant’s circumstances, it is not possible to determine whether these requirements have been met. For this reason, we would encourage all prospective applicants to not self assess and call the Farmer Assistance Hotline on 132 31.

What are the residency requirements for FHA and do New Zealand Citizens qualify?

Among other requirements, farmers must be an ‘Australian resident’ and ‘be in Australia’, to qualify for the Farm Household Allowance. The partner of a farmer must also be an ‘Australian resident’ who is ‘in Australia’ and furthermore their partner must ‘reside in Australia’.

To be eligible for Farm Household Allowance, you must:

  • be an Australian resident
  • continue to be an Australian resident for as long as you get the payment
  • be physically present in Australia on the day you submit your claim
  • be one of the following: an Australian citizen; holder of a permanent visa; or the holder of a protected special category visa (SCV).

A New Zealand citizen may also be eligible if they were in Australia under a special category visa (SCV) on 26 February 2001 or between 26 February 1999 and 26 February 2001 (for at least 12 months). Up to 24 February 2004, you may have been issued with a Certificate of Residence (XOB073) by International Services, in Centrelink.
The requirement to be an ‘Australian resident’ and ‘be in Australia’ is consistent with social security payments such as Newstart Allowance and Youth Allowance.
Further information on this requirement can be found at:

How does the Farm Household Allowance improve on previous income support payments?

The Farm Household Allowance is available regardless of the cause of financial hardship and does not rely on a climatic trigger (such as a drought declaration). Qualification for assistance is based on an individual’s circumstances.

Case management provides support to farmers while they assess their situation and take action to improve their long-term financial security. Two supplements, the Farm Financial Assessment Supplement (up to $1500) and the Activity Supplement (up to $3000 for agreed activities) are available to Farm Household Allowance recipients to assist them reach these objectives.

When did the Farm Household Allowance commence?

The Farm Household Allowance commenced on 1 July 2014, replacing the Interim Farm Household Allowance, which commenced on 1 March 2014. The Farm Household Allowance will ensure that farmers in need have access to financial support.

How do I apply for the Farm Household Allowance?

Income support payments are delivered by the Australian Government Department of Human Services (formerly Centrelink). You can apply for the Farm Household Allowance online by visiting Department of Human Services or by telephone on 132 316.

Why is the Farm Household Allowance available at all times, not just during drought?

The Farm Household Allowance recognises the circumstances of farmers and their partners and provides them with financial assistance to address individual hardship irrespective of the cause.

Drought is one cause of these hardships, but it is not the only one. Recognising farm families can experience difficulty in different ways and at different times, the payment is available at all times.

Successive reviews have recommended the government establish a hardship payment that is available at all times, not just during drought. These include the 2009 Productivity Commission report on Government Drought Support and the 2011 Review of the Western Australian Drought Pilot. The 2013 Intergovernmental Agreement on National Drought Program Reform also captures this approach and commits the government to implement the Allowance.

Why is the Farm Household Allowance limited to three years?

The three year period of support provides Farm Household Allowance recipients with sufficient time to develop strategies for financial self-reliance and creates an incentive to make business decisions where the farm business is unlikely to be viable.

What other measures are in place to help farmers in hardship?

Information on other assistance for farmers provided by the Australian Government is available on the assistance measures page.

What is the maximum payment rate under the Farm Household Allowance?

The rates of payment align with social security allowances, such as Newstart Allowance and Youth Allowance. Newstart Allowance rates are payable to a person over the age of 22 and are higher than the rate of Youth Allowance. For information on the latest rate of payments please refer to the Guide to Australian Government Payments.

Recipients may also be eligible to receive supplementary amounts such as telephone, pharmaceutical and/or remote area allowances and rent assistance.

What is the maximum amount of income that a person can earn and still receive the Farm Household Allowance?

There is a maximum amount of income that a recipient can earn in a fortnight before they are no longer entitled to the Farm Household Allowance payment for that fortnight. This maximum amount varies depending on your personal circumstances. For more information on the income cut-offs please refer to the Guide to Australian Government Payments, in particular:

  • Table D for those under the age of 22 (Youth Allowance) - refer to the rate for ‘Job seekers’
  • Table D(a) for those over the age of 22 (Newstart Allowance)

How is my income assessed?

Eligibility and rate of payment are assessed on a combination of ‘net business income’ and gross income for all other income.

Who qualifies as a prescribed adviser?

For the purposes of the Farm Financial Assessment, a person is a prescribed adviser if:

  1. the person has relevant financial qualifications; and
  2. the person is a member of a professional body whose members normally provide financial advice.

An example of a relevant financial qualification is a qualification:

  1. from a tertiary institution in a field that is relevant to giving financial advice; and
  2. that is recognised by a professional body whose members normally give financial advice.

Accountants and many agricultural consultants would meet the definition of a prescribed adviser. As most farmers would engage the services of an accountant, each farmer should be able to access an adviser to complete the Farm Financial Assessment.

A person is not required to hold an Australian Financial Services Licence (AFSL) to qualify as a prescribed adviser as the licence is required for a professional who provides financial product advice rather than financial advice. However, if during the course of the conversation, the prescribed adviser recommends a particular financial product (not included in the Farm Financial Assessment), they would be required to hold the AFSL.

The Farm Financial Assessment includes a disclaimer to ensure that prescribed advisers are aware of their requirements.

What information is required to complete a Farm Financial Assessment?

The documents required to complete a Farm Financial Assessment include:

  • a copy of your Farm Financial Assessment letter including your login details for the online Farm Financial Assessment
  • any current or recent business plans, agronomy plans or financial plans
  • copies of your last three years’ tax returns and financial statements (including profit and loss statements and balance sheets)
  • details of current income including Department of Human Services payments, income from off-farm employment or rental income
  • any superannuation payments, annuities and other income
  • details of assets and investments, including bank and building society accounts, farm management deposits and shares or managed investments
  • details of any personal or business debts
  • details of planned expenditure (e.g. children’s education, maintenance expenses)
  • copies of any additional financial information that you provided in support of your application for Farm Household Allowance.

Please note: The applicant would need to have completed the Farm Household Allowance application (available online at the DHS website) and be assessed as having a prima facia claim. Once a prima facia claim has been established DHS will issue a request to complete the Farm Financial Assessment.

Useful guidance is also available to assist farmers to gather all the information they need to take with them when they meet with their prescribed adviser to conduct their Farm Financial Assessment. Visit the Farm Financial Assessment page for more information.

How will the prescribed adviser be paid for their services?

The government will provide up to $1500 towards the cost of a Farm Financial Assessment. According to the preference of the farmer and their adviser, the farmer can pay their adviser and claim a reimbursement or the prescribed adviser can invoice the Department of Human Services directly for their services. The charge for the assessment should be commensurate with the time taken to complete the assessment.

Farm Household Allowance - assets


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What is the assets threshold for Farm Household Allowance?

There is a two-tier asset test for the Farm Household Allowance. An applicant must meet both tiers of the test to qualify.

The first tier – the non-farm assets test – is the same as mainstream social security allowances.

The asset limits (as at 1 July 2014) are:

  • single recipients: $202 000 (homeowner); $348 500 (non-homeowner)
  • partnered recipients: $286 500 (homeowner); $433 000 (non-homeowner)

The second tier has a net farm asset value limit of $2.55 million.

The principal family home is excluded from the calculation of assets.

Why was a $2.55 million net farm assets limit established?

The $2.55 million net farm asset value takes account of the fact that farm assets are hard to sell, especially in times of hardship. In most cases it is not possible or practical for farmers to sell farm assets, especially during periods of drought.

The $2.55 million net farm asset limit captures the majority of farms that are family owned and operated.

Is the Farm Household Allowance taxable?

Yes. Like many other income support payments, including Newstart and Youth Allowance, Farm Household Allowance is assessable income for taxation purposes.

What activities are associated with the allowance and how will case managers be involved?

Recipients and case managers will work together to negotiate flexible and realistic steps to improve a recipient’s situation, taking into account the fact that they have a farm to run. If necessary, objectives and associated activities can be renegotiated. Examples of activities that can be undertaken include:

  • training courses or development activities
  • appointments with professional advisers
  • alternative income sources
  • succession planning
  • social or health support.

What is the role of a Department of Human Services case manager?

A Department of Human Services Farm Household Case Officer, as well as specialist financial advisers and rural financial counsellors, will be available to support Farm Household Allowance recipients as they take steps to improve their long-term financial security.

The Farm Household Case Officer will assist recipients to meet their activity requirements by helping them to make decisions and take actions to improve their financial situation.

This includes negotiating a Financial Improvement Agreement, and helping recipients identify suitable training, advice and other services relevant to comply with their agreement.

The Farm Household Case Officer will also review the recipient’s agreement at least quarterly, including negotiating new goals, objectives and activities.

How will Rural Financial Counsellors be involved in working with recipients of the Farm Household Allowance?

Rural Financial Counsellors play an important role in assisting farmers who are suffering financial hardship and who have no alternative sources of impartial support.

Many recipients of the allowance will already have a relationship with a counsellor.

Recipients of the allowance will be encouraged to continue their relationship with a counsellor, or a Farm Household Case Officer may refer a client to a counsellor if this would be beneficial.

Will recipients of the Farm Household Allowance be able to receive any educational allowances?

Under the Assistance for Isolated Children Scheme, recipients of the Farm Household Allowance who are already eligible for the Basic Boarding Allowance will have the parental income test waived for the Additional Boarding Allowance.

If a person qualifies for the Farm Household Allowance, how does this affect the eligibility of their dependents for Youth Allowance?

Generally, to qualify for Youth Allowance applicants must meet a parental income and assets test. Farm Household Allowance recipients whose children apply for Youth Allowance will automatically meet the parental income and asset test. However, this does not exempt parents from completing the Family Actual Means Test (if applicable)—this treatment is in line with other social security recipients who also operate a business or partnership, who are receiving an income support payment and whose children are applying for Youth Allowance.

What other financial supplements are available to recipients of the Farm Household Allowance?

Recipients may be eligible for a range of supplements, including Telephone Allowance, Pharmaceutical Allowance, Remote Area Allowance, Clean Energy Supplement and Rent Assistance. Farm Household Case Officer will be able to advise farmers and their partners whether they are eligible for any or all of these allowances.

Water assets


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What is the water asset threshold for Farm Household Allowance?

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.

Why was $1.1 million net water assets limit established?

The $1.1 million net water asset limit captures the majority of farms that are family owned and operated.

If water assets were assessed as farm assets, the average current FHA recipient could hold $1.1 million in water assets and still satisfy the net farm assets test.

What does the $1.1 million net water asset limit mean for me?

From 17 December 2016, you can apply/re-apply for Farm Household Allowance and have up to $1.1 million of the net value of the water assets used in your farm enterprise exempt when calculating the value of your and your partner’s non-farm assets.

What if I applied for Farm Household Allowance previously and was rejected?

Contact the Farm Assistance Hotline on 132 316 for advice and assistance.

How do I apply/re-apply now that $1.1 million of net water assets is exempt from the non-farm assets test?

Farmers are encouraged not to self-assess.

Contact the Farm Assistance Hotline on 132 316 for advice and assistance.

What documents do I need to provide for my water assets?

You need to provide:

  • a copy of your Water Access Entitlement (or equivalent depending on your state) showing volume held, water source and security type;
  • the volume and water source of any unused allocation at the date of application; and
  • documents providing evidence of any loan secured fully or partly by one or more of the water assets.

What happens if the value of my water assets change?

You need to notify the Department of Human Services by contacting the Farm Assistance Hotline on 132 316.

What if the net value of my water assets is more than $1.1 million?

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 disregarded when calculating the value of a farmer and their partner’s non-farm assets.

Any net value in excess of the $1.1 million will be counted towards the non-farm assets test limit.

How do I calculate the value of my water assets?

You need to provide:

  • a copy of the Water Access Entitlement (or equivalent depending on your state) showing volume held, water source and security type, for each water held by you or your partner.
  • the volume and water source of any unused allocation at the date of application; and
  • documents providing evidence of any loan secured fully or partly by one or more of the water assets.

You need to provide an estimate of the value of your water assets.

In providing a valuation, you are required to use your best judgement of the actual market value of the water asset that you could achieve in today’s market and with respect to your particular circumstances.

If you need assistance in estimating the value of your water assets, you may wish to contact:

  • your state or territory water authority
  • an accountant or financial adviser

Will an evaluator value my water assets?

You need to provide an estimate of the value of your water assets.

In providing a valuation, you are required to use your best judgement of the actual market value of the water asset that you could achieve in today’s market and with respect to your particular circumstances.

If you need assistance in estimating the value of your water assets, you may wish to contact:

  • your state or territory water authority
  • an accountant or financial adviser

How do I get more assistance?

Contact the Farm Assistance Hotline on 132 316 for advice and assistance.

If you need assistance in lodging your claim you may wish to contact a Rural Financial Counsellor. For more information on the Rural Financial Counselling Service call 1800 686 175.

Farm Household Allowance - off-farm income offset


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How can a Farm Household Allowance recipient reduce their off-farm income from the assessment of their payment?

The Farm Household Support Act 2014, which establishes the Farm Household Allowance, allows for deductions to be made from off-farm income in some circumstances. The Farm Household Support Minister’s Rule 2014 sets out these circumstances, where that income has been used to pay interest on a loan related to the farm enterprise.

A key principle of the allowable deduction from off-farm income is that the ordinary income of the farm enterprise is less than zero. Importantly, the Farm Household Allowance recipient also needs to be able to demonstrate that they are unable to renegotiate terms with their lender. Other requirements apply – please see below for more details.

The effect of this is to ensure that a person’s rate of payment accurately reflects the money available to that person for their self-support. This setting recognises that farmers experiencing financial hardship often rely on off-farm income to support the farm enterprise rather than for self-support.

In these cases the interest component of farm losses can be used to offset an individual’s off-farm income where they meet the criteria listed in the Minister’s Rule, and summarised below.

What is off-farm income?

Off-farm income is any amount earned, derived or received that was not produced by an activity of the farm enterprise. Examples of off-farm income include (but are not limited to): contracting such as harvesting or fencing, off-farm employment, agistment income, interest payments, and rental income. One exception is income from compensation payments, which cannot be included in the offset.

When can the offset be used?

An amount of off-farm income can be excluded from the income assessment in the relevant tax year if:

  1. the amount of interest payable during the relevant tax year either by the person or their partner is owed to a commercial lender (e.g. a bank) and payable under a written contract; and
  2. the loan contract was entered into at least one year prior to the person or their partner claiming Farm Household Allowance and cannot be renegotiated with the lender; and
  3. the lender is independent from the person and their partner if applicable and does not have a right or interest in the farm or any other asset owned by the person, their partner or the farm enterprise; and
  4. the lender holds a farm asset of the farm enterprise as security for the loan; and
  5. the ordinary income of the person or their partner for the relevant financial year is less than zero (i.e. the farm enterprise made a loss in the relevant financial year).

The amount of off-farm income which can be offset against interest repayments is referred to as the ‘allowable deduction’. The maximum amount of the person’s (and their partner’s) allowable deduction is $80 000 for a tax year. This means, for a farmer and partner applying for the Farm Household Allowance, they may each claim a portion of the deduction, but the total between them cannot exceed $80 000.

Further, the allowable deduction is limited by the total of the farm enterprise loss AND the amount of interest owing. The interest portion cannot contain an amount for the repayment of the principal.

How does a Farm Household Allowance recipient show they cannot renegotiate terms with their lender?

Examples of how an applicant may be able to substantiate that they are unable to renegotiate the amount of interest payable during the tax year may include (but are not limited to):

  • prior correspondence from the commercial lender that a lower amount cannot be negotiated (particularly if there is a debt mediation process in place)
  • if the customer is already being assisted by the Rural Financial Counselling Service, checking with that service to verify that the person is in farm debt mediation, business debt mediation or is under asset management (frequently a precursor to either)
  • a statement from the person’s financial adviser or counsellor that a negotiation has taken place with the commercial lender and the lowest possible repayments are in place
  • default letters from the commercial lender (particularly threatening foreclosure).

Please note that where foreclosure has occurred, an assessment will also be required to determine if the farmer still has effective control of the farm enterprise (see s12 Farm Household Support Act 2014).

If you are in doubt whether you are eligible to access this offset as part of your Farm Household Allowance claim, you should contact the Department of Human Services’ Farmer Assistance Hotline on 132 316.

Income reconciliation process


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What is the Farm Household Allowance Reconciliation process?

A reconciliation process takes place following the end of each financial year to compare your estimate of business income with your actual business income. This process is called Business Income Reconciliation and is a requirement of receiving Farm Household Allowance (FHA).

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

The purpose of annual reconciliation is to ensure that recipients of FHA have received their correct FHA payments for the previous financial year. This reflects the general social security law principle of payment integrity—that the right person receives the right payment at the right time.

The first annual reconciliation of FHA payments is scheduled to begin in June 2016.

Why has the government provided for a waiver of FHA reconciliation debt incurred in 2014–15?

Provision of a one-off waiver has been made to assist 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. Recipients should keep DHS informed of any changes in their financial circumstances to avoid incurring any future debt. All recipients, even if they are eligible for a one-off waiver, will still need to complete the reconciliation process. Where business income estimates are unreasonable or there is evidence of deliberate and evasive non-compliance with a notice, the waiver will not apply.

What is expected of me (recipient of FHA) as part of the FHA reconciliation process?

A requirement of receiving Farm Household Allowance is that at the end of each financial year the Department of Human Services will undertake a comparison between your estimated business income and your actual business income.

The Department of Human Services will write directly to FHA recipients in June 2016 to detail what information you are required to provide and how you can submit this information to DHS.

For more information, call the Farmer Assistance Hotline on 132 316 (call charges may apply).
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