Basic principle of the test

For participation in RASF to be allowed, the sugarcane farmer's (and their partner's) income [3] for the three years preceding the date of legal transfer of the property must be less than the [glossary:maximum:] [glossary:basic:] [glossary:rate:] [8] of age service pension [3], excluding pension supplement [3]. 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 [3] to apply depending on the farmer's personal circumstances at the time of transfer.

Last amended: 18 August 2014

Assess actual income not deemed income

In the assessment of non-sugarcane farm income for the sugarcane farmers' income test, deemed income is not calculated on financial assets [3]. Income from financial assets is assessed using the actual income amount received, as disclosed on the income tax return.

Actual income relating to financial assets

The table below sets out the income that should be assessed for various forms of financial assets.

Disposal of income and assets

If the sugarcane farmer or their partner has disposed of any assets during the three years prior to divestment, no income is assessed under the sugarcane farmers' income test, as no actual return would be received. As with other financial assets, deeming provisions [3] do not apply to gifted assets. If the person qualifies for a pension or allowance under RASF, assessment of gifts under the deprivation provisions will apply in determining the rate of pension payable. Disposal of income is included in the sugarcane farmers' income test.

Payments not assessed as income

The following payments will not be assessed as income [3]:

• income support payments [3] including Family Tax Benefit
• Youth Allowance or ABSTUDY
• payments made under the Farm Household Support Act 1992 (repealed 2014)
• payments made under the VEA [3]
• eligible termination payments.

Assessment of all other income

All other non-sugarcane farm income normally assessable under the income test will be taken into account under the sugarcane farmers' income test. Under the test, non-farm profits cannot be offset by non-farm losses.    

Person's ordinary income from farming

Section 49Y(3) [4] VEA