FHA forced disposal of livestock

​​​What is forced disposal of livestock?

  • From time to time, farmers are forced to quickly sell, euthanise or otherwise dispose of some or all of their stock without realising the full market value of the animal.
  • This may be as a result of a biosecurity hazard, a natural disaster or prolonged drought. When this occurs it is referred to as ‘forced disposal of livestock’.

Don’t self assess! Call DHS on the Farmer Assistance Hotline: 132 316

The Australian Government Department of Human Services (DHS) processes FHA applications and can help you to assess your situation.

Farm Household Allowance (FHA) assists eligible farmers and their partners who are experiencing financial hardship to improve their long-term financial situation. FHA provides up to three years of income support, which is designed to help recipients meet basic household needs and is an opportunity to take steps to improve their circumstances.

FHA is paid fortnightly at a rate equivalent to Newstart Allowance (or Youth Allowance for those under 22 years of age).

Eligiblity Basics

You must:

  • be a farmer* or the partner of a farmer
  • meet an income and assets test
  • meet residence requirements
  • be willing to undertake a Farm Financial Assessment
  • be willing to enter into a Financial Improvement Agreement to help you improve your financial circumstances.

*If you are the farmer you must contribute a significant part of your labour and capital to the farm enterprise based on specific criteria.

Income and asset assessment and the forced disposal of livestock

There is no special treatment of income or assets generated from the forced disposal of livestock for the purposes of assessing
income or assets for FHA or other social security payments.

However, preferential tax treatments are available.

Tax treatment of forced disposal of livestock

If you have been forced to dispose of livestock you can elect to:

  • spread the profit earned from the forced disposal or death of livestock over a period of five years following the year of disposal, or
  • defer the profit and use it to reduce the cost of replacement livestock in the disposal year or any of the next five income years.

Any unused part of the profit is included in assessable income in the fifth income year.

You can elect to spread or defer profits if you dispose of stock or stock dies because:

  • land is compulsorily acquired or resumed under an Act
  • a state or territory leases land for a cattle tick eradication campaign
  • pasture or fodder is destroyed by fire, drought or flood and you will use the proceeds of the disposal or death mainly to buy replacement stock or maintain breeding stock for the purpose of replacing the livestock
  • they are compulsorily destroyed under an Australian law for the control of a disease (including bovine tuberculosis) or they die of such a disease, or
  • you receive official notification under an Australian law dealing with contamination of property.

For more information on tax rules relevant to primary producers visit: ato.gov.au/Business/Primary-producers

Need more information or help?

  • Call the Farmer Assistance Hotline: 132 316
  • Speak to your Financial Advisor or Rural Financial Counsellor
  • FHA Guidelines are available at agriculture.gov.au/fha

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