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C09/2014 Department of Agriculture - Farm Household Allowance

Document

DATE OF ISSUE:  18 August 2014

Department of Agriculture - Farm Household Allowance

Purpose

To advise staff of the Department of Agriculture's new Farm Household Allowance (FHA), paid by the Department of Human Services (DHS) and how this will affect the Department of Veterans' Affairs (DVA) client compensation and income support payment assessments.

Key Points
  • The FHA is an income support payment similar to Newstart and Youth Allowance paid by DHS
  • DVA Disability Pension — s are exempt income for the purposes of the FHA.
  • Manual clearances with DHS are required where a client claiming a mutually exclusive DVA payment has indicated that they are in receipt of FHA.
  • Few DVA clients will be affected.

Background

In the 2013-14 Budget, the Government announced its main contribution to the National Drought Program Reform of a new Farm Household Allowance to support farmers and their partners when they are in hardship.  The package is designed to encourage farmers to plan for the future and better manage risks, including the risks associated with drought.  This package replaces the Exceptional Circumstances arrangements.

Background continued

The Farm Household Allowance will be paid by DHS fortnightly at a rate equivalent to Newstart Allowance (or Youth Allowance for those under 22 years old).  A Health Care Card will be provided and support through a case manager to help recipients assess their situation and develop a plan for the future.  The new Allowance will be available for those 16 years old or over for up to three years to give farm families time to improve their circumstances.

Impact on DVA Clients

Mutual Exclusion

The Farm Household Support legislation aims to be consistent with existing social security law and is treated in a similar manner to other income support payments under the Social Security Act 1991 (SSA) such as Newstart Allowance.  Eligibility for the new allowance cannot be granted if the person currently receives income support.

Education Allowances paid under the Veterans' Children Education Scheme (VCES) or the Military Rehabilitation and Compensation Act Education and Training Scheme (MRCAETS) are not to be paid in addition to the FHA.

The FHA is not payable to War Widow[glossary:(er)s:] or the Military Rehabilitation and Compensation Act 2004 (MRCA) Wholly Dependent Partners receiving a pension or those that have received a lump sum.

Income Support

The Farm Household Allowance is not payable if a person is receiving a Service Pension or Income Support Supplement under the Veterans' Entitlements Act 1986 (VEA), or an income support payment under the SSA, such as Age Pension.

Additionally, a DVA client receiving the Farm Household Allowance cannot also receive:

  • Age Pension (SSA);
  • Age Service Pension (VEA s.36C(c));
  • Invalidity Service Pension (VEA s.37C(c));
  • Partner Service Pension (VEA s.38C(1)(c)); or
  • Income Support Supplement (VEA s.45D(1)(c))

because the FHA is considered a social security benefit (Section 93(1) item 4 of the Farm Household Support Act 2014 refers).

DFISA

As 'adjusted disability pension' is exempt in the Farm Household Allowance income test assessed by DHS (section 95 item 1 of the Farm Household Support Act 2014 refers) no DFISA will be payable by DVA in respect of the FHA.

For an explanation of 'adjusted disability pension' and 'DFISA' see the Consolidated Library of Information and Knowledge (CLIK) Compensation & Support Policy [glossary:Chapter 5.9.1.

Rehabilitation and Compensation

War Widow Pension and Wholly Dependent Partner payment

Farm Household Allowance is not payable if a person is receiving a War Widow(er)'s Pension under the VEA.  There are some exceptions for those in receipt of the DVA pension continuously since before 1 November 1986 and also received a social security benefit.

A clearance will be required with DHS when granting a War Widow(er)'s Pension or the MRCA Wholly Dependent Partner payment (periodic or lump sum) so that the FHA can be cancelled by DHS.

Incapacity Payments

For those in receipt of MRCA or SRCA Incapacity payments, the FHA can be paid in addition to incapacity payments but the FHA is reduced dollar for dollar as per usual compensation offsetting arrangements.

Permanent Impairment

Permanent Impairment compensation does not affect the payment of Farm Household Allowance because it is included in the definition of 'adjusted disability pension:CSPOL/5.9.1]' (VEA s.118NA(d)) and this is excluded from the FHA income test (section 95 item 1 of the Farm Household Support Act 2014 refers).

Education Schemes

Mutual exclusions also apply to the FHA and payments under the DVA education scheme (section 38(6)(a) of the FHS Act 2014 refers).  A clearance is required with DHS when granting an education allowance to a client who is in receipt of the FHA.

Other Exceptions

The Orphan's Pension or MRCA Eligible Young Person's payment do not affect the Farm Household Allowance.

DHS Clearances

To prevent clients being overpaid, please conduct a clearance with DHS when granting new mutually exclusive DVA payments where the person has declared they are in receipt of FHA.  For example, if a deceased veteran farmer's wife and daughter (under 25 years old) are running the farm and both are in receipt of FHA and then the daughter decides to take up full?time study, a clearance with DHS will ensure that the FHA ceases the day before the commencement of study when the DVA Education Allowance commences.

Legislation

Department of Agriculture

The Farm Household Support Act 2014 and the Farm Household Support (Consequential and Transitional Provisions) Act 2014 received Royal Assent on 28th March 2014.  On 15 May 2014, it was proclaimed that the Farm Household Allowance would commence from 1 July 2014.

Section 38 of the Farm Household Support Act 2014 lists the mutual exclusions and exceptions.  The Farm Household Support (Consequential and Transitional Provisions) Act 2014 repealed the Farm Household Support Act 1992.

Department of Veterans' Affairs

References to the repealed Farm Household Support Act 1992 in sections 49J(5)(c) and 49Y(5)(c) of the Veterans' Entitlements Act 1986 under the definition of non?assessable income for the redundant Retirement Assistance for Farmers' schemes were repealed as part of these changes.

Contact

Please address any questions regarding this Departmental Instruction to Georgina Dudzinski of New Initiatives in the Rehabilitation and Entitlements Policy branch on x14895 or by email to georgina.dudzinski@dva.gov.au.

Mark Harrigan

Assistant Secretary

Rehabilitation and Entitlements Policy Branch

Rehabilitation and Support Division

    August 2014

Disability pension, for the purposes of service pension and income support supplement, means:

  • a pension paid for incapacity from war caused conditions, or peacetime, peacekeeping or hazardous service caused conditions (other than a war widow's or orphan's pension); or
  • temporary incapacity allowance; or
  • any other payment in respect of incapacity or death resulting from war or war-like operations in which the Crown has been engaged [usually paid by another Commonwealth country].

A war widow/widower is generally a person who immediately before their partners death, was the partner of, or was legally married to:

Refer to 5E(1) of the VEA for the full definition.

 

 

An age pension is a means tested income support payment paid by Centrelink  or DVA on behalf of the Department of Families, Housing, Community Services and Indigenous Affairs. The majority of age pensions are paid through Centrelink. However, eligible veterans  who have an accepted disability or receive a disability pension from DVA, but do not have qualifying service, may be paid their age pension by DVA. Their partner may also receive their age pension from DVA, if eligible.

 

 

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.

 

 

Section 118NA of the VEA defines adjusted disability pension as:

  • disability pension paid under Parts II or IV of the Veterans' Entitlements Act 1986 (VEA); and
  • permanent impairment payments and special rate disability pension paid under the Military Rehabilitation and Compensation Act 2004.

Adjusted disability pension does not include war widow's/widower's pension, or payments made by other governments to compensate for war or service related injuries.