Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2002-2003-2004
THE
PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
(Circulated by the authority of the Minister for Agriculture,
Fisheries and Forestry,
the Hon Warren Truss MP)
1. The purpose of the Farm Household Support Amendment Bill 2004
is to extend the Government’s Farm Help - Supporting Families Through
Change programme and renew its focus to support decision making by low
income farmers ‘who can no longer borrow against their assets’ to
make changes to their situation.
2. The Bill extends the programme to 30
June 2008 as a key component of the
ongoing Agriculture – Advancing Australia package.
3. The Bill
includes a number of amendments that aim to improve the effectiveness and
administration of the Farm Help programme and ensure that it reaches low income
farmers most in need. There will be an increased emphasis on using strategic
information, analysis and professional advice to support decision-making. These
changes have emanated from the on-going monitoring of the programme’s
performance, a mid-term evaluation of Farm Help and the Performance Audit of Key
Agriculture Advancing Australia Programs undertaken by the Australian National
Audit Office in 2003. The extension of the Farm Help programme and its
associated changes will not affect the ongoing Exceptional Circumstances Relief
Payment programme.
4. The Farm Household Support Amendment Bill
proposes extending the programme to 30 June 2008 for a four-year fully
operational programme with applications for income support closing on 30 June
2007. Income support payments will conclude on 30 June 2008. There
will be residual expenditure after 30 June 2008 of approximately $2 million.
Provision will be made for any simple extensions of the Farm Help program
(beyond June 2009) to be made by Regulation. This will enable the matter to be
dealt with expeditiously by the Parliament.
5. The Farm Household
Support Amendment Bill 2004 will also give effect to a number of proposed
enhancements to the Farm Help programme, including:
a) Requiring that financial assessments are undertaken after the initial stage of application and the Activity Plan developed before income support can commence.
b) Ensuring financial assessments are undertaken by prescribed advisors.
c) Requiring the assessment of a farmer’s ability to access further finance to be included in the financial assessment.
d) Providing immediate access to income support after initial application if applicants meet the Farm Help hardship provisions.
e) Enabling reviews to be conducted of re-establishment grant recipients and their partners to determine whether they have re-entered farming within 5 years of receiving the grant.
f) Removing the provision allowing farmers to suspend their Farm Help income support to access the Exceptional Circumstances Relief Payment and then return to Farm Help income support.
g) Ensuring recipients are making effective use of the programme through obtaining advice and implementing their activity plans.
h) Amending the objects of the Farm Household Support Act 1992 to
reflect the changed focus of the programme from welfare to
adjustment.
6. The Instruments established under the Farm Household
Support Act 1992 will also be amended to implement the programme extension
and its enhancements. Specifically, these will focus on:
a) Increasing the maximum re-establishment grant to $50,000.
b) Determining a farmer’s ability to access further finance in the financial assessment.
c) Undertaking financial assessments after the initial stage of application and developing the Activity Plan before income support can commence.
d) Financial assessments being undertaken by prescribed advisors. In most cases this would be a suitably qualified financial person, although it is possible that provision will be made to allow others to undertake the financial assessment in remote areas, in rare instances.
e) Ensuring that Counsellors, funded by the Australian Government, cannot draw funding from more than one Australian Government programme for the same purposes (in response to an ANAO recommendation).
f) Undertaking quarterly reviews of recipients’ circumstances and progress against their activity plans, undertaken to ensure recipients are making effective use of programme elements in terms of decision-making and business improvements.
7. A regulation under the Farm Household Support Act 1992 will be
issued which details who can provide financial assistance to programme
recipients.
FINANCIAL IMPACT STATEMENT
8. The Farm
Help programme was allocated $134.9 million over four years in the 2004-05
Federal Budget. Changes to the programme proposed in the Farm Household
Support Amendment Bill 2004 have been included in this figure. There will be
residual expenditure after 30 June 2008 of approximately $2 million.
NOTES OF CLAUSES
Clause 1
– Short Title
This Bill is to amend the Farm Household
Support Act 1992.
Clause 2 - Commencement
7. Clause 2
specifies the commencement date for the provisions in the Act. Most provisions
will come into effect on the date the Farm Household Support Amendment Act
2004 is proclaimed. Schedule 1 is retrospective to 1 July 2004, to ensure
that struggling farmers will not be disadvantaged by delays in the
scheme’s operation.
Clause 3 –
Schedule(s)
8. Clause 3 provides that the amendments specified in a
Schedule to the Act, and any other items in a Schedule, are amended or repealed
according to the terms of the Schedule. Any item in a schedule has effect
according to its terms.
Item 1 – Paragraph 6B (a)
9. This item extends the
closing date for applications for Farm Help income support to 30 June 2007 or
such later date as is prescribed.
Item 2 – Paragraph 6B
(b)
10. This item extends the closing date for payment of Farm Help
income support to
30 June 2008 or such later date as is
prescribed.
SCHEDULE 2 – CHANGES TO FARM HELP INCOME SUPPORT AND
RE-ESTABLISHMENT GRANT SCHEME
Part 1 – Main
amendments
Item 1 – Subsection 3(2)
11. This
item references the meaning for an activity plan to subsection
8B(3).
Item 2 – Subsection 3(2)
12. This item
references the meaning for advice on financial outlook to subsection
8B(2).
Item 3 - Subsection 3(2)
13. Item 1 inserts
the definition of liquid assets from the Social Security Act 1991.
Inclusion of this definition means that the assets of a person and their
partner, if any, (excluding farm assets) will be assessed to verify whether they
qualify for the hardship provision developed for Farm Help.
Item 4 -
Subsection 3(2) (definition of sale of a farm)
14. This definition
has been repealed.
Item 5 – Subsection 3(2)
15. The
definition of sale of a farm enterprise has been inserted to replace the
definition of sale of a farm. This change has been made to ensure that sale of a
farm refers to a transaction which results in the rights or interests of a
person in the enterprise and the land used for the purposes of the farm
enterprise being transferred to another person. This clause is not intended to
allow for the transfer of a person’s right or interest to their
partner.
Item 6 - Subsection 3(2)
16. This item references
the meaning for severe financial hardship to section 5.
Item 7 –
After Section 4
17. This clause allows farmers who are in severe
financial hardship when they make a claim for Farm Help income support, to
access Farm Help income support without having obtained advice on their
financial outlook or developing an activity plan. If a farmer who qualifies for
Section 8B (1) (a) to (c) of Farm Help income support requests hardship
assistance under the Farm Help programme, they will have to prove that they meet
the criteria for hardship. Severe financial hardship is defined as where the
liquid assets (as defined in section 198N of the Social Security Act
1991) of a person and their partner at the time of application are not
greater than the total amount of Newstart Allowance that would have been payable
in the immediately preceding six weeks if the person were entitled to Newstart
Allowance and had no other income.
18. Hardship provision recipients will be provided with income support for a
period of up to three months while they undertake their financial assessment and
develop their activity plan. Income support will cease if they have not done
this within the three month period.
19. The intention of this clause is
to allow for a minority of applicants to the scheme, who need immediate income
support, to undertake the initial requirements of the programme. The majority of
applicants will be required to develop their activity plan and undertake a
financial assessment prior to receiving income support. This is to ensure that
programme participants benefit from the maximum time, while on income support,
to implement their activity plan and emphasises the adjustment focus of the
programme.
Item 8 – Section 6
20. The previous
objects of the Act have been repealed and replaced with separate objects for the
Exceptional Circumstances Relief Payment and Farm Help income support. There are
no objects for the Farm Household Support programme as this programme has
ceased. The amendment and clarification of the objects has been developed to
assist decision-makers, tribunals and the courts, in making clear the
distinction between Farm Help and the Exceptional Circumstances Relief Payment.
Previous rulings by the Courts have considered that the objectives of the two
programmes are the same and that Farm Help had a welfare orientation. This is
not the case. The object of Farm Help has been refined to promote adjustment by
farmers – to ensure that they take action to improve their long term
financial situation by either improving the financial performance of their farm
enterprise, finding alternative sources of income or re-establishing outside
farming.
Item 9 – Section 8B
21. This section repeals
the previous section and substitutes an amended qualification for Farm Help
income support. These changes are to ensure that programme requirements to
obtain a financial assessment and develop an activity plan prior to income
support (except in cases of hardship) are met. This will assist decision making
by low income farmers ‘who can no longer borrow against their
assets’ to make changes to their situation. The differences in
qualification provisions for Farm Help and the Exceptional Circumstances Relief
Payment demonstrate that Farm Help has an adjustment focus, whereas Exceptional
Circumstances Relief Payment is primarily a welfare
programme.
22. Section 8B(1)(d)(i) removes the requirement for a bank
certificate of inability to obtain finance, in response to concerns raised by
farmers and the banks, particularly the perceived impact this requirement might
have on a farmer’s future borrowing capability. It replaces the
certificate with the requirement for a person to obtain advice from a prescribed
adviser. This prescription will be made by regulation. Advisers will give their
opinion on whether a farmer is likely to obtain further finance and on the
prospects of the farm enterprise. There is still provision in the Act in
8B(1)(d)(ii) for a person to obtain advice about their inability to obtain
finance from their primary lender, as an optional
alternative.
23. Section 8 (e) inserts the requirement that a person
obtains advice from a prescribed adviser on whether there is a reasonable
likelihood of improving the financial performance of the farm
enterprise.
24. Section 8B(1)(f) makes mandatory the requirement that a
person develops an activity plan prior to receiving income support or a
re-establishment grant, enabling in Sections 51 and 51B termination of
assistance under the programme if a person fails to develop and implement an
activity plan. The rationale for this clause to encourage farmers to approach
the programme as an opportunity to gain information and skills that will support
a better outcome for them and their families in the long term. This amended
process is intended to maximise recipients’ opportunities to make
decisions about their future and to then implement change, while they receive
income support under the programme for up to twelve
months.
25. Requirements in 8B(1)(d), (e) and (f) can be deferred in the
instance of severe financial hardship, as discussed previously.
Item
10 – At the end of Division 1B of Part 2
26. This provision
ends the opportunity for a person or their partner to suspend their Farm Help
income support to access Exceptional Circumstances Relief Payments and then
return to Farm Help income support. This provision has been developed to ensure
that a person uses their time on Farm Help to implement their activity plan and
achieve some form of adjustment in the farm business. A continuous period of
consideration of options and decision making will give farm families the best
opportunity to fulfill their own stated goals and achieve improved financial
security. A person or their partner is able to apply for Exceptional
Circumstances Relief Payment after their completion of the Farm Help programme.
This provision will not be retrospective beyond the commencement of Schedule
2.
Item 11 – Section 13B
27. Subsection 13B has been
repealed as it is no longer relevant to programme revisions. It was included
when an activity plan was not a mandatory requirement.
Item 12 –
Subsection 19(3)
28. This amendment inserts new reference to Section
19 subsection 4.
Item 13 – at the end of section
19
29. This amendment allows discretion for the Secretary to waive
the requirement for a person to obtain advice on financial outlook or to develop
an activity plan prior to being granted income support where they have been
determined to be in severe financial hardship. It also allows for access to the
Farm Help advice and training scheme if income support is granted for this
three-month period through the hardship provision. It allows the Secretary to
use the information a person provides for the Farm Help advice and training
grant for the purposes of determining whether they are able to qualify or be
payable for Farm Help income support, if they apply for Farm Help income support
within a period of three months of being eligible for the advice and training
grant. It refers in the Note to cessation of payability of income support if
advice is not obtained and the activity plan is not developed within three
months of the claim being granted. This responsibility can be delegated by the
Secretary to Centrelink.
Item 14 – At the end of Part
8
30. Section 50 provides the ability to terminate Farm Help income
support if a person or their partner is in receipt of an Exceptional
Circumstances Relief Payment. This removes the possibility of a person or a
couple receiving Farm Help income support and Exceptional Circumstances Relief
Payment at the same time.
31. Section 51 provides for automatic
termination if a person fails to obtain advice on financial outlook or develop
an activity plan within three months if they are in receipt of income support
because they have been granted access under severe financial hardship provisions
(subsection 19(4)).
32. Section 51B provides for termination of Farm Help
income support if a person fails to comply with an activity plan that they have
developed. This ceases to be payable on the day that the determination is
made.
Item 15 – Part 8A
33. Part 8A has been
repealed, to remove the provision to suspend Farm Help income support or Farm
Household Support to access Exceptional Circumstances Relief
Payment.
Item 16 – Paragraph 52A (1)(a)
34. This
provides objects for the Farm Help re-establishment grant scheme which relate to
the amended object for Farm Help income support.
35. 52AA gives the Commonwealth the authorisation to recover the amount
of a re-establishment grant if a re-establishment grant recipient or their
partner returns to farming within five years after receiving the grant. This
provision has been transferred from the Re-establishment grant
instrument.
Item 18 – Paragraph 52B(1)(a)
36. This
repeals the paragraph and substitutes a new guideline for the advice and
training grant scheme in the Farm Help Advice and Training Scheme 1997
instrument. These guidelines particularly enable the development of an activity
plan by recipients of the advice and training grant.
Item 19 –
Paragraph 52B(3)(b) and (c)
37. This repeals the paragraphs and
substitutes provisions (b), (c), (d) and (e) as further guidelines for the
advice and training grant scheme in the Farm Help Advice and Training Scheme
1997 instrument. These amended provisions outline what the Instrument is
required to cover: assistance to comply with directions to develop an activity
plan; implement an activity plan; obtain advice on their financial outlook and
the consequences for a person of not complying with directions.
Item 20 – Subsection 8E(5)
38. This subsection has
been repealed, as Section 49D (ability to suspend Farm Help if Exceptional
Circumstances Relief Payment is payable) to which it refers has been
repealed.
Item 21 – Section 9A (note)
39. The note
has been repealed as part 8A (Qualification for Exceptional Circumstances Relief
Payment) to which it refers has been repealed.
Item 22 – Section
9B (note)
40. The note has been repealed as part 8A (Qualification
for Exceptional Circumstances Relief Payment) to which it refers has been
repealed. This now refers to section 50 for termination of Farm Help income
support where Exceptional Circumstances Relief Payment is
payable.
Item 23 – Definition
41. This refers to the principal
act mentioned in Schedule 3 as the Farm Household Support Act 1992.
42. This item notes that amendments in (1) made by items 1, 2, 3, 6, 7,
8, 9, 11, 12, 13, 20, 21 and 22 will be applicable to a person who makes a claim
for Farm Help income support on or after the commencement of this
item.
43. This item notes that amendments in (2) which relate to the
insertion of sections 51 and 52 into the Farm Household Support Act 1992
will be applicable to a person who makes a claim for Farm Help income
support on or after the commencement of item 14.
Item 25 –
Exceptional circumstances relief payment
44. This item notes that
amendments made by item 8 will be applicable to a person who makes a claim for
Exceptional Circumstances Relief Payment on or after the commencement of this
item.
Item 26 – Interaction between exceptional circumstances
relief payment and farm help income support
45. This item notes that
amendments in (1) made by items 10 and 15, where a person who makes a claim for
Exceptional Circumstances Relief Payment, that results in Farm Help income
support not being payable to a person, will commence for a claim made on or
after the commencement of this item.
46. The amendments made by item 14
in relation to the insertion of section 50 into Farm Household Support Act
1992 will apply on or after the commencement of this item. This item refers
to a situation where a person receives an Exceptional Circumstances Relief
Payment, that results in Farm Help income support not being payable to a
person.
Item 27 – Activity plan directions under section
13B
47. Paragraph (1) clarifies that despite the repeal of section
13B of the Farm Household Support Act 1992 made by item 11, the
section will continue in force where a claim for farm help income support was
made prior to commencement of the repeal of this item.
48. Paragraph (2)
clarifies that despite the repeal of section 13B of the Farm Household
Support Act 1992 made by item 11, the section will continue in force
where a direction under section 13B to undertake an activity plan was given and
in force prior to commencement of the repeal of this item.
49. Paragraph
(3) clarifies that despite the repeal of section 13B of the Farm Household
Support Act 1992 made by item 11, the section will continue in force
where a direction under section 13B to comply with an activity plan was given
and in force prior to commencement of the repeal of this item.
Item 28
– Farm Help re-establishment scheme
50. Paragraph (1) refers to
amendments made by items 4, 5, 8, 16 and 17 of Schedule 2, which will
apply to a claim for a re-establishment grant on or after commencement of this
item.
51. Paragraph (2) refers to amendments made by items 4 and 5 of
Schedule 2 to subsection 3 (2) , to the amendment made by item 16 of Schedule 2
to section 52A and the insertion by item 17 of section 52AA in Schedule 2.
Despite these, section 52A of the Farm Household Support Act 1992 and the
instruments made under that section will continue to be in force on and after
the commencement of those items where a claim for a re-establishment grant was
made prior to the commencement of those items.
Item 29 – Farm
help advice and training scheme
52. Paragraph (1) refers to
amendments to section 52B of the Farm Household Support Act 1992 made by
items 18 and 19 of Schedule 2 which will apply to a claim for a grant of the
advice and training scheme on or after the commencement of this
item.
53. Paragraph (2) refers to amendments to section 52B of the
Farm Household Support Act 1992 made by items 18 and 19 of Schedule 2.
Despite these, section 52B of the Farm Household Support Act 1992 and the
instruments made under that section will continue to be in force on and after
the commencement of those items where a claim for the advice and training grant
was made prior to the commencement of those items.