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5.10.1 Overview of Retirement Assistance for Sugarcane Farmers Scheme (RASF)
Last amended: 19 August 2009
What is RASF
RASF was part of the Federal Government's 2004 Sugar Industry Reform Program, announced by the Prime Minister on 29 April 2004. RASF was a scheme that intended to allow older sugarcane farmers to transfer ownership of the family sugarcane farm or farms, by way of gift to the younger generation, without affecting the retiring sugarcane farmer's eligibility for income support, or rate of income support.
Who can participate in RASF
Any sugarcane farmer, the partner or former partner of a sugarcane farmer, or the widow/widower of a sugarcane farmer who transfers a sugarcane farm property within the period that the scheme is in operation, by way of gift, to the younger generation, and then retires from sugarcane farming, may be eligible to participate in RASF. The person must reach retirement or pension age prior to 13 July 2007.
Period of operation of RASF
RASF commenced on 13 July 2004 and operated up to and including 12 July 2007.
Requirements applicable to sugarcane farm transfer
Certain requirements have to be met in order for participation in RASF to be considered for a particular sugarcane farm transfer.
Sugarcane farmer must be a qualifying sugarcane farmer
A person must be a qualifying sugarcane farmer, or the partner or former partner of a qualifying sugarcane farmer or the widow/widower of a qualifying sugarcane farmer to be eligible to divest a sugarcane farm under RASF.
Transfer of farm to actively involved eligible descendent
If a claim for service pension or income support supplement is lodged within 13 weeks of the date of transfer of the sugarcane farm(s), the sugarcane farmer's pension entitlements may under certain circumstances be backdated to the date of transfer.
Benefits of participation in RASF
Where a sugarcane farmer who transfers a sugarcane farm property to the younger generation is eligible to participate in RASF, the value of the sugarcane farm(s) transferred (up to a maximum of $500,000) is not assessed under the deprivation provisions. This may result in an increase in the rate of pension payable to the sugarcane farmer or a rate of pension payable where previously no income support pension was payable.
Need for professional advice
Sugarcane farmers who are contemplating a transfer of their sugarcane farm(s) and sugarcane farm assets to the younger generation in order to participate in RASF are strongly advised to seek professional advice in relation to succession planning and legal and taxation matters, as well as any impact on the transferee.
Pension bonus scheme
Sugarcane farmers who are members of the pension bonus scheme (PBS) may also participate in RASF. However, the transfer of the sugarcane farm is regarded as a disposed asset for the purposes of calculating the amount of bonus payable.
A person's 'partner' is someone who is a member of a couple with that person.
A widow is a woman who was:
- the partner of a person immediately before the person died; or
- legally married to a man and living with him immediately before he died; or
- legally married to a man and living separetely and apart from him on a permanent basis, immediately before he died.
A widower is a man who was:
- the partner of a person immediately before the person died: or
- legally married to a woman and living with her immediately before she died; or
- legally married to a woman and living separetely and apart from her on a permanent basis immediately before she died.
Currently, the pension age for a veteran is 5 years earlier than pension age for a non-veteran.
Male Pension Age
- If a veteran = 60 years. Veteran pension age is specified in VEA section 5QA.
- If a Non-Veteran = 65 years. Pension age for non-veterans is specified in VEA section 5QB.
Pension age for a female is subject to age equalisation. Pension age for females is being raised by 6 months every two years, so that by 1 January 2014 the eligibility ages for males and females will be the same.
From 1 July 2017, the pension age for both male and female non veterans born on or after 1 July 1952 will progressively increase by 6 months every 2 years, so that by 1 July 2023, pension age for a non veteran will be 67. Veteran pension age will not change so by 1 July 2023 pension age for a veteran will be 7 years earlier than pension age for a non veteran. A table explaining this gradual increase can be found in 3.4.1 Age requirements.
A person is considered to be a qualifying sugarcane farmer if they have:
- held an eligible interest in the farm for a continuous period of 15 years and the farm has for the last two years and since 29 April 2004 been a sugarcane farm, or
- acquired an eligible interest in the sugarcane farm before 29 April 2004 and had an active involvement in the farm or the farming industry in Australia for any period or periods totalling at least 20 years.
During either period the person or their partner must have derived asignificant part of their income and contributed a significant part of their labour to the development of a sugarcane farm for at least the last two years.
Refer to subsections 5PAA(3) and 5PAA(4) for the full definition.
According to subsection 5P(1) of the VEA, an eligible descendant in relation to a person means:
- a child, step child or adopted child of the person or of a partner of the person, or
- a descendant in direct line of a child described above, or
- any other person who, in the opinion of the [glossary:Commission:DEF/Commission/Repatriation Commission], should be treated for the purposes of this definition as a person described in the above paragraph.
- has contributed a significant part of his or her labour to the development of the sugarcane farm; or
- has undertaken educational studies or training in a field that, in the opinion of the Commision, is relevant to the development or management of the sugarcane farm enterprise.
A service pension is an income support payment broadly equivalent to the social security age and disability support pensions. It may be paid once a veteran or partner has reached the nominated age or is incapacitated for work.
ISS is an income support payment that may be paid to eligible war widows and widowers under the VEA and persons receiving wholly dependent partners' compensation under the MRCA, and who satisfy the means tests. It is an indexed rate, increased twice-yearly in March and September in line with changes to the cost of living and/or average wages. Income Support Supplement (ISS) legislation commenced on 20 March 1995. It is a payment created to replace the ceiling rate income support age, carer, wife and disability support pensions, paid to war widows/widowers by Centrelink.
Income support pension is:
- a social security pension
- a service pension;
- an income support supplement.