Application of the Sugarcane Farmers' Income Test

Basic principle of the test

For participation in RASF to be allowed, the sugarcane farmer's (and their partner's) income for the three years preceding the date of legal transfer of the property must be less than the [glossary:maximum:] [glossary:basic:] [glossary:rate:] of age service pension, excluding pension supplement. The income amount used for the sugarcane farmers' income test equals the total of the last three years non-sugarcane farm income plus the total of the last three years sugarcane farm income. Negative total sugarcane farm income can be offset against positive income from other sources.

Example of a sugarcane farmer's income

The table below shows an example of a sugarcane farmer's income for the three years preceding transfer.

The loss on rental properties in years 1 and 2 cannot be offset against any other source, so the three-year total rent income is $5000. The loss on farming income can be offset against the other positive income. Thus, the assessable income for the sugarcane farmers' income test would be $55,000 minus $10,000 = $45,000.

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 sugarcane farmers' income test. The date of claim is not relevant for the sugarcane farmers' income test.

Impact of sugarcane farmers' income test on rate of pension

The sugarcane farmers' income test has no impact on the rate of pension payable. This test is used solely for RASF eligibility purposes. Normal income and assets tests rules continue to apply to determine the rate of pension payable.

Relevant maximum rate of age service pension

The table below shows how to determine which maximum basic entitlement to apply depending on the farmer's personal circumstances at the time of transfer.