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Application of the Farmers' Income Test
Basic principle of the test
For participation in RAFS to be allowed, the farmer's (and his or her partner's) income for the three years preceding the date of legal transfer of the property must have been less than the maximum rate of age service pension.
There was an exception to this rule. The exception is where the farm property was transferred after 30 June 2001 and the transfer was allowed under the limited additional time given to finalise the transfer available to certain farmers. The additional time to finalise the transaction was allowed because they were unable to transfer the property on or before 30 June 2001 due to circumstances beyond their control. NB specified time limits for finalising the action apply to this group.
The income years for the exception group are 1997-1998, 1998-1999 and 1999-2000.
Income details required where claim backdated
The Income details for the three years prior to the date of farm transfer are required to determine whether the person satisfies the Farmers' income test. The date of claim is not relevant for the Farmer' Income Test.
If the farm was transferred after 30 June 2001, the 3 income test years to be used to calculate the person's income are the 1997-1998, 1998-1999, 1999-2000. The maximum basic rate to be used to calculate a person's maximum basic entitlement is to be the maximum basic rate that applied 30 June 2001.
Impact of Farmers' Income Test on rate of pension
The Farmers' Income Test had no impact on the rate of pension payable. This test was used solely for RAFS eligibility purposes. Normal income and assets tests rules continue to apply to the rate of pension payable.