5.6.9 Pension Bonus and Retirement Assistance for Farmers

Last amended: 22 April 2014

Pension bonus impact

The pension bonus scheme (PBS) is designed to encourage a person to defer retirement. Contrary to this, the retirement assistance for farmers scheme (RAFS) encourages farmers to retire. Special rules apply to farmers registered under the pension bonus scheme, who subsequently apply for RAFS. These special rules are designed to allow them to utilise the benefits of both schemes.

Timing of pension bonus and RAFS activities

In order for a person to access both schemes a person must:

Access to pension bonus scheme and RAFS

If a person registered under the pension bonus scheme then applies for assistance under RAFS they can give their farm away. By doing so, the gifting of the farm is disregarded under the disposal of assets rules.    

Impact on bonus from giving away farm

The act of giving away the farm impacts on the bonus amount, which is calculated taking into account deemed income under the income test and the asset value under the assets test that would be maintained on the deprived value of the farm if RAFS were not enacted. The gift of the farm is not considered a gift for the purposes of a disposal preclusion period for PBS.