FMD Rainfall Analyser frequently asked questions

From 1 July 2016, you can withdraw your FMD within 12 months without affecting any tax deduction you have claimed for an amount deposited in the previous income year if you meet the required rainfall deficiency criteria for the six consecutive months prior to your withdrawal of the FMD. Normally, FMDs must be held for at least 12 months in order to realise the taxation benefits.

From 1 July 2016, a primary producer affected by drought can withdraw their FMDs before 12 months without losing their taxation benefits, if they:

• made their FMD in the previous financial year, and
• claimed a deduction for the FMD in the previous financial year’s tax return, and
• have held their FMD for at least six months, and
• can demonstrate that an area of their farming property has been affected by a rainfall deficiency for the six consecutive months immediately prior to the withdrawal of the FMD (see below).

If a primary producer withdraws their FMD early because of drought (based on rainfall deficiency), they cannot claim a tax deduction for any further deposits made in that financial year.

You must not be solely carrying on one or more of the following primary production businesses:

• commercial fishing, pearling and related activities
• tree felling
• transporting trees that you logged for milling or processing.

To be eligible, an area of land you use for your primary production business must have been affected by a rainfall deficiency  for the previous six consecutive months immediately before your withdrawal. The rainfall must be within the lowest fifth percentile (a 1-in-20-year event) of  rainfall records held by the Bureau of Meteorology for your location for that six-month period.

A fifth percentile or lower rainfall deficiency criterion was chosen as this is comparable to the early access provision that was used under the previous Exceptional Circumstances (EC) arrangements, which ceased on 30 June 2014.

Under the EC arrangements an area generally had to have experienced this level of rainfall deficiency over more than 12 months.

FMDs only have to be held for 12 months to satisfy legislative requirements and realise the available tax concession. Six months of rainfall deficiency was considered a reasonable length of time to avoid deposits being made solely for tax minimisation/planning purposes rather than to address genuine periods of hardship requiring withdrawals of FMDs.

You can check your potential eligibility for early withdrawal based on drought by using the FMD Rainfall Analyser. This tool allows you to locate your property on a map and identify whether it has met the required rainfall deficiency for the previous six consecutive months. To be eligible, an area of your farming property must be located in a red shaded area on the map. If it is, you can request a Rainfall Deficiency Report from the department to keep as part of your taxation records should you choose to withdraw funds early.

To avoid confusion, the red shading reflects eligibility for the month of withdrawal. For example, red shading on a map generated in October means an area experienced a rainfall deficiency in the six consecutive months immediately prior to October (i.e. the 6-month period from 1 April to 30 September).

Please remember: When requesting a Rainfall Deficiency Report, it is your responsibility to ensure you provide the department with the correct location of your property. If the report you use to show your eligibility is found, through an Australian Taxation Office (ATO) audit for example, to be incorrect or a misrepresentation (that is, the highlighted point shows a fifth percentile rainfall deficiency but is not located on any part of your property) you could lose your claimed taxation benefit and penalties could be applied.

Prior to making your withdrawal, you should ensure you have received a Rainfall Deficiency Report from the department confirming your eligibility for early withdrawal based on drought. This way you can make sure you meet all the FMD Scheme’s requirements and don’t incur any unexpected tax liabilities. You should print and save the report you receive from the department for your records (see below for further information on keeping records).

To obtain your concessional tax treatment you need to ensure that any withdrawal occurs before the end of the month immediately following that 6-month drought period.

If you need to demonstrate rainfall deficiency for an earlier period, you can request a report from the department. The red shading on the report will reflect the month a withdrawal would have been eligible for a particular location.

As the FMD Scheme is an Australian Government program, the rainfall deficiency criterion may differ from the criteria used by a state government to determine eligibility for state government assistance. Therefore a state government drought declaration does not in itself make you eligible to withdraw your FMD early without losing your claimed taxation concessions.

If your farm business is located in a state government drought-declared area, you are encouraged to consider the other forms of assistance available from your state government.

No. The FMD Scheme is a national program and to make sure the early access provision is applied equitably to all FMD holders, they must use the FMD Rainfall Analyser (and a Rainfall Deficiency Report from the department)  to demonstrate their eligibility to withdraw their FMDs early without losing their claimed taxation concessions.

Using Bureau of Meteorology rainfall data ensures a consistent, objective and equitable assessment of each primary producer’s need to withdraw their FMD early, regardless of where their farm business is located.

The Bureau of Meteorology uses certain rainfall observation stations and interpolates these (uses estimation techniques) to generate the data that underpins the FMD Rainfall Analyser. The estimates are subject to the uncertainties of scientific and technical research and so these may not exactly reflect what has happened on a particular part of your property on a particular date.

It is important to note that the Bureau of Meteorology rainfall data used for the FMD Rainfall Analyser is updated on a monthly basis—usually on or about the 22nd day of each month.

This involves uploading data for the previous calendar month and correcting any inaccuracies in any previous data. This means the months and/or years you will be able to select from the tool’s layer menu will also change on or about that date, and that the eligibility of a particular area may appear to change over time even if you select the same month and year.

While it is extremely unlikely that the new data will change your eligibility, it is recommended that you submit a request to the department for a Rainfall Deficiency Report immediately after checking the tool to confirm your property met the rainfall deficiency criteria at a particular point in time.

No. It will not be possible for an FMD holder to achieve any alterations to data presented in an FMD Rainfall Analyser report.

The map on your FMD Rainfall Deficiency Report that you receive from the department will show an area (if any) that has experienced a rainfall deficiency equivalent to, or worse than, a 1-in-20-year rainfall event over the six consecutive months prior to the month of withdrawing your FMD.

If your report shows that your farm business, whether wholly or partially, is located in such an area the report will be considered sufficient evidence to demonstrate you have experienced a drought that warrants early withdrawal of your FMD without the loss of any taxation concessions you have claimed from making the deposit in the previous financial year. If your farm business is not located wholly or partially in such an area, you will not have met the eligibility criteria for early withdrawal.

You are not eligible for early withdrawal of your FMD under the drought early access provision. If you choose to withdraw an FMD you have held for less than 12 months, and have already claimed the tax deduction for the deposit, you will need to request an amendment to that tax return to exclude the deduction.

You are not eligible for early withdrawal of your FMD under the drought early access provision. If you choose to withdraw an FMD you have held for less than 12 months, and have already claimed the tax deduction for the deposit, you will need to request an amendment to that tax return to exclude the deduction.

The department provides the report in a PDF format via email. It is recommended that you save it electronically and print it out, so it can be kept in a safe place for your records. This should be done as soon as possible to show you are eligible for early withdrawal.

If you lose the electronic version of the report provided to you by the department (or an old report generated from the previous ‘self-assessment’ tool), you can request a replacement from the department.

As data is updated monthly (around the 22nd day of the month) in the FMD Rainfall Analyser, there is an unlikely risk, but a risk none the less, that you may no longer be eligible once the rainfall data is updated.

You are responsible for retaining your Rainfall Deficiency Report in accordance with the applicable taxation record keeping requirements. You should retain the records for five (5) years as per Australian Taxation Office (ATO) requirements.

You must not use, copy, reproduce or distribute any part of the report for any other purpose.

If you are ever audited for tax purposes, the Australian Taxation Office (ATO) can verify your property details against the longitudes and latitudes you have provided for your FMD Rainfall Deficiency Report. If your property is found not to be at the location you have provided and you were not in a rainfall deficient area, there may be tax implications and penalties.

The Bureau of Meteorology’s rainfall deficiency dataset, which underpins the Rainfall Analyser, is generated at an approximately 5km horizontal resolution.

The Bureau of Meteorology’s rainfall dataset is the best available dataset to ensure a nationally consistent, independent, repeatable and timely approach to determination of rainfall deficiency for the purposes of the FMD Scheme.

The Bureau’s data is based on rainfall records dating back to 1900 from an extensive network of standardised rainfall gauges and consistent observation practices. The collection, analysis and interpolation of the rainfall data conforms to international best practice standards set by the World Meteorological Organization, and enables the Bureau to provide the best estimate of rainfall recorded across the country.

Rainfall data that is not part of the Bureau’s national dataset was not considered reliable for the purpose of the FMD scheme, as it has not been collected using standardised instruments and observation practices or undergone sufficient quality control or review.

The Bureau of Meteorology updates the rainfall deficiency data used for the map and reports on a monthly basis. Updates occur about the 22nd day of each month, allowing for the majority of rainfall records across the country to be included in the Bureau’s analysis of rainfall deficiencies.

The rainfall deficiency datasets generated by the Bureau of Meteorology are derived from the Bureau of Meteorology’s national Australian Water Availability Project (AWAP) gridded rainfall dataset.

This dataset provides a nationally consistent, long-term record of rainfall, which includes observed rainfall data from 1900 to present. Currently, around 6000 individual rainfall stations input into the AWAP dataset, all of which conform to World Meteorological Organization guidelines for climate observational standards and practices.

The Bureau has very long rainfall records, with the national gridded dataset extending back to 1900. On-farm records may not extend as far back in time as the Bureau’s records, and may not be subject to the same level of review and standardisation as the Bureau’s records.

Only the Bureau’s rainfall deficiency data can be used to demonstrate that a farm business has experienced rainfall deficiencies for the purposes of primary producers withdrawing their FMD early without the loss of any claimed taxation concessions.
This approach ensures a nationally consistent, objective and equitable approach is applied to this aspect of the FMD Scheme.

The Australian Government has set the eligibility criteria, including the rainfall criterion, for primary producers to withdraw their FMDs within 12 months without losing their claimed taxation benefits.

Using the rainfall dataset from the Bureau of Meteorology allows for a nationally consistent, independent, repeatable and timely approach to assessing rainfall deficiency.

The Bureau’s data is based on long-term records from an extensive network of standardised rainfall gauges and consistent observation practices. The data has undergone world-leading quality control and thorough review to ensure it conforms to international best practice standards set by the World Meteorological Organization.

Rainfall data that is not part of the Bureau’s national dataset was not considered reliable for the purposes of the FMD Scheme, as it has not been collected using standardised instruments and observation practices or undergone sufficient quality control or review.

More information is available from the following sources:

Australian Taxation Office
Phone: 13 28 66

Department of Agriculture, Fisheries and Forestry
Email: FMD Returns

Bureau of Meteorology

Please send an email to FMD Returns if you have any technical questions or issues to raise.