Income test for Farm Household Allowance

There is an income test for Farm Household Allowance (FHA). This means that we consider how much you earn when we assess your claim. There are cut-off limits which can mean you won’t be eligible if your income has a higher value.

A cut-off limit is specific to your circumstance and is based on all the following:

• income from your farm
• amount of farm loss
• how it is apportioned between partnered customers.

Your total income is your farm business income and non-farm income combined. There are certain incomes you need to tell us about and others we don’t need to know about. We need to know about any business income, non-farm income and other incomes, losses and forced disposals of livestock.

If you meet the assets cut-off limit but are not sure about the personal and farm income test, you can still submit a claim for us to assess.

Farm business income

Farm business income includes the income from your farm enterprise and directly related businesses. We’ll use your latest tax return to work out if you’re eligible for FHA.

If your farm business has had a change of circumstances, you should tell us. We may be able to use a farm business estimate instead of your tax return.

Read more about estimating business income.

Non-farm income or non-farm business income

If your business income from a non-farm enterprise will be very different from your latest tax return, you may be able to provide us with an estimate for the current financial year.

Your non-farm income can affect your payment. You must tell us when you claim. Read how to report your income.

Farm business losses

If your farm is losing money, we’ll use that loss to offset your non-farm income. We’ll do this if you earn less than $0 from your combined farm business activities.

We’ll calculate your farm business loss as an average fortnightly amount.

We’ll then reduce your fortnightly non-farm income by that amount when working out how much you can get. We’ll use farm losses to reduce non-farm income up to $100,000 per individual or couple, each financial year.

You don’t have to apply to offset your income. We’ll assess this when you report your income.

To find out more about farm business losses, call the farmer assistance hotline.

Forced disposal of livestock

We may exempt money you get from the forced disposal of livestock from the income test. We’ll exempt the income if you deposit it in a Farm Management Account.

Forced disposal includes selling or destroying livestock due to drought or natural disaster. It may also include any of the following:

• when your farm can’t support the livestock
• when you have concern for the welfare of the livestock
• when the law requires you to dispose of the livestock.

You must tell us if you get money from the forced disposal of livestock.

If you lend money to the trust or company

Deeming rules are used to work out income from your financial assets. If you’re getting FHA, deeming rules may not apply to a loan.

If your loan meets all the following, it’s not subject to deeming:

• you make the loan to a trust that you’re a beneficiary of or to a company you hold shares in
• your loan relates to a farm asset held by the trust or the company
• your outstanding loan amount exceeds the total value of all financial investments held by the trust or company and there’s not enough money in the investments to repay the full amount.

Read more about the deeming rules.