The Farm Household Allowance (FHA) in Australia is subject to an income test to determine eligibility and payment amounts. The income test assesses the income of the farmer and their partner, if applicable, to determine their financial need.
Farm business income estimate
Farm business income includes the income from your farm enterprise and directly related businesses. You need to estimate your farm business income, including any allowable deductions. You do this for the current financial year when you claim, and again each financial year. We use this estimate to work out if you’re eligible for FHA.
Non-farm business income
If your business income from a non-farm enterprise will be different from your latest tax return, you can provide Centrelink with an estimate for the current financial year
Non-farm income
Your non-farm income can affect your payment. You must report to Centrelink how much you earn each fortnight.
Farm business losses
If your farm is losing money, your loss will be used to offset your non-farm income. Centrelink calculates your farm business loss as an average fortnightly amount. Your fortnightly non-farm income will be reduced by that amount when working out how much you can get. Your farm losses go to reduce your non-farm income up to $100,000 per individual or couple, each financial year.
Forced disposal of livestock
Money from the forced disposal of livestock may be exempt from the income test. Forced disposal includes selling or destroying livestock due to drought or natural disasters. It may also include any of the following:
- when your farm can’t support the livestock
- when you have concerns for the welfare of the livestock
- when the law requires you to dispose of the livestock.
The exact details of the income test for FHA can vary, as government policies and thresholds may change. However, here are some general points to consider:
- Means testing: The income test for FHA involves evaluating the combined income of the farmer and their partner (if applicable). This includes income from various sources such as farming activities, off-farm employment, investments, and other assessable income.
- Thresholds: There are specific income thresholds or limits set by the government to determine eligibility and payment amounts. These thresholds may vary depending on factors such as whether the farmer has dependent children or the specific circumstances of the applicant.
- Adjusted taxable income: The income test typically assesses the adjusted taxable income, which takes into account various deductions and exemptions. It may include adjustments for allowable expenses, losses, and certain other factors that could affect the farmer’s financial situation.
- Income taper rate: If the farmer’s income exceeds the threshold, there may be a taper rate applied to reduce the FHA payment amount. This means that for each dollar earned above the threshold, the FHA payment may be reduced by a certain percentage.
It’s important to note that the income test for FHA can be complex, and specific details may change over time. For the most accurate and up-to-date information regarding the income test and eligibility criteria for the Farm Household Allowance, I recommend visiting the official website of the Australian government’s Department of Agriculture, Water and the Environment or contacting their offices directly. They will be able to provide you with the latest information and guidance based on your specific circumstances.