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5.5.1 Overview of RAFS
Last amended: 13 December 2007
What is RAFS
RAFS is a scheme that intended to allow older farmers to transfer ownership of the family farm or farms, by way of gift to the younger generation, without affecting the retiring farmer's eligibility for income support, or rate of income support.
Who can participate in RAFS
Any farmer or former partner of a farmer who transferred a farm property on or before 30 June 2001, by way of gift to the younger generation, and then retires from farming, may be eligible to participate in RAFS. RAFS was also open to farmers or farming couples who transferred their farm or farms by way of a gift between 15 September 1992 and 14 September 1997.
In certain limited situations qualifying farmers (and their partners) were given additional time to complete the transfer of the farm. The circumstances include where the farmer initiated action by seeking advice from the Department about under the scheme prior to 1 July 2001 but where there was insufficient time to complete the process before the scheme ended on that date.
Period of operation of RAFS
RAFS commenced on 15 September 1997 and was initially to operate until 14 September 2000. The RAFS Extension Act 2000 extended the scheme to 30 June 2001. In certain limited situations farmers who did not have sufficient time to finalise the transfer of farm property under the scheme before 1 July 2001 were given limited additional time to do so. RAFS has now ceased and therefore, no new claims for assistance under the scheme can be lodged.
Additional time to finalise transfer for certain farmers
Certain qualifying farmers (and their partners) who were unable to finalise the transfer of their farm on or before 30 June 2001, due to delays beyond their control, were provided with additional time to finalise the farm transfer.
For this group, a claim for RAFS or written pre-assessment request must have been lodged on or before 31 July 2001.
If the farmer satisfied the requirements, the farmer (or his or her partner) was required to complete the property transfer by:
- where a preliminary request to test eligibility was lodged-3 months from the date of the notification advice from the Department that the person was eligible to participate in the scheme, or
- where an actual application was lodged, 3 months from the date of lodgement of the application.
The RAFS Eligibility Criteria was amended to enable certain qualifying farmers (and their partners) to complete the farm transfer within a specified time frame after 30 June 2001 and still benefit under the Scheme's provisions as if the farm had been transferred on or before 30 June 2001. All other eligibility criteria remained unchanged.
Requirements applicable to farm transfer
Certain requirements had to be met in order for participation in RAFS to be considered for a particular farm transfer.
Requirements applicable to farmer or former partner
A qualifying farmer, the former partner of a qualifying farmer or the widow/widower of a qualifying farmer may have been eligible to divest a farm under RAFS.
If a claim for RAFS was lodged within 3 months of the date of transfer of the farm(s), the farmer's pension entitlement may under certain circumstances be backdated to the date of transfer.
Benefits of participation in RAFS
Where a farmer who transferred a farm property to the younger generation was eligible to participate in RAFS, the value of the farm(s) transferred (up to a maximum of $500,000) was not assessed under the deprivation provisions. This may have resulted in an increase in the rate of pension payable to the farmer or a rate of pension payable where previously no pension was payable.
Need for professional advice
Farmers who were contemplating a transfer of their farm(s) and farm assets to the younger generation in order to participate in RAFS were strongly advised to seek professional advice in relation to succession planning and legal and taxation matters.