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2008-2009-2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Farm Household Support Amendment
(ANCILLARY bENEFITS) BILL 2010
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Agriculture, Fisheries and
Forestry,
the Hon. Tony Burke MP)
Farm Household Support amendment
(ANCILLARY BENEFITS) BILL 2010
OUTLINE
The Farm Household Support Amendment (Ancillary Benefits) Bill 2010 (the
Bill) inserts a new Part 9D to the Farm Household Support Act 1992 to treat
farmers receiving income support under a pilot of drought policy reform
measures as if they were receiving Exceptional Circumstances Relief
Payments for welfare related purposes.
The pilot represents a dramatic shift in the way governments help farmers
deal with the challenges of the future, from crisis management to risk
management. The old system provides the most assistance to farmers who were
in the most debt and fails to recognise those who have made tough business
decisions to stay out of debt.
The new approach, to be trialled in Western Australia, will help to make
the farming sector more resilient and addresses mental health issues in
farming communities.
Importantly, the pilot will not affect farmers currently receiving income
support payments and interest rate subsidies under the old Exceptional
Circumstances system. The National Rural Advisory Council will continue to
consider proposals for Exceptional Circumstances declarations submitted by
state governments, and to reassess current declarations coming up for
renewal.
The pilot will run from 1 July 2010 to 30 June 2011. It includes the Farm
Family Support measure which provides income support to assist eligible
farmers facing hardship with basic household needs. Assistance is available
regardless of the cause of hardship.
The Farm Family Support payment will be delivered through an executive
scheme arrangement under the Financial Management and Accountability Act
1997 rather than being fully legislated, due to the complex nature of the
income support legislation and the short term nature of this program.
Guidelines will be published which will provide details of the operation of
the executive scheme.
The Government wishes to ensure that recipients of Farm Family Support
during the trial can access the full range of so-called 'ancillary
benefits' which are already available for Exceptional Circumstances Relief
Payment and other welfare recipients under existing legislation. As it is
not possible to use the executive scheme arrangement to provide the full
range of ancillary benefits to recipients, legislation is required to
ensure these will be available.
In order to meet the objective of making Commonwealth welfare assistance to
this group consistent with Exceptional Circumstances Relief Payment the
Bill will amend the Farm Household Support Act 1992 to effectively treat
(that is, to 'deem') Farm Family Support as if it were Exceptional
Circumstances Relief Payment for the purpose of providing access to a range
of measures (hereinafter referred to as 'ancillary benefits') that are not
available as part of executive scheme payments. These include an
automatically issued health care card and concessions relaxing the income
and asset testing of student allowances paid to, or in respect of, the
student children of recipients.
Ancillary benefits available to Exceptional Circumstances Relief Payment
recipients will automatically become available to Farm Family Support
recipients. This will be through the linkages in the Farm Household
Support Act 1992 to other legislation - that is the Social Security Act
1991, the Social Security (Administration) Act 1999, the Income Tax
Assessment Act 1936, the Income Tax Assessment Act 1997, the Small
Superannuation Accounts Act 1995, and the Age Discrimination Act 2004.
The Bill does not make any amendments to any legislation other than the
Farm Household Support Act 1992.
Provisions in this Bill can only be applied in respect of payments and
services made under and for the duration of the Farm Family Support Scheme,
an executive scheme created under the Financial Management and
Accountability Act 1997.
Piloting Drought Policy Reform
The pilot will test a comprehensive package of drought reform measures.
These are designed to:
a) Support farmers in managing and preparing for future drought and a
changing climate;
b) Increase the resilience and capacity of rural communities to cope with
adversity;
c) Better coordinate social support services in rural areas;
d) Help families meet immediate basic household expenses during financial
hardship; and
e) Connect farmers and former farmers to discuss opportunities outside of
farming.
Farm Family Support is a program under the drought pilot which provides
three key elements:
i) Income support, paid at a fortnightly rate based on the Newstart
Allowance basic rate, to help farmers and their families meet basic
household needs.
ii) Case management to assist farmers to develop a plan to identify actions
which will improve their financial position on-farm and off-farm.
iii) To support the implementation of these plans, assistance of up to $2
500 to fund the cost of financial advice to assess farmers' long-term
financial position and $5 000 to fund professional advice and/or
training.
FINANCIAL IMPACT STATEMENT
The estimated costs of ensuring ancillary benefits are provided as a part
of the Farm Family Support Scheme are $0.269 million, including the
automatically issued health care card and concessional income and asset
testing for Youth Allowance. The Farm Family Support scheme is demand-
driven.
Farm Household Support AMENDMENT (ancillary benefits) BILL 2010
NOTES ON ITEMS
Section 1: Short Title
Section 1 is a formal provision specifying the short title of the Act as
the Farm Household Support Amendment (Ancillary Benefits) Act 2010.
Section 2: Commencement
Section 2 provides for the commencement of the Act.
This Act will commence upon Royal Assent.
Section 3: Schedule(s)
Section 3 provides that each Act specified in a Schedule to the Act is
amended or repealed as set out in the applicable items of the Schedule
concerned, and any other item in a Schedule to the Act has effect according
to its terms.
Schedule 1-Amendment of the Farm Household Support Act 1992
Item 1: After Part 9C
This item inserts a new part 9D containing a new section 52D that describes
how payments under the Farm Family Support Scheme may be treated in
relation to certain other welfare related laws. It does not cover the
policy guidelines for the Farm Family Support Scheme itself.
Subsection 52D(1)
This subsection sets out the purpose of this section which is to set out
how other laws will apply to payments made, and things done, under the
executive scheme known as the Farm Family Support Scheme.
Subsection 52D(2)
This subsection creates a deeming provision whereby a payment of Farm
Family Support will be taken to be a payment of Exceptional Circumstances
Relief Payment for the various legislative provisions named. It sets out in
each paragraph those laws which are affected by the deeming provision.
Paragraph 52D(2)(a)
This paragraph identifies notification provisions and recovery of
overpayment provisions in the Farm Household Support Act 1992 that will
apply to Farm Family Support in the same way as they apply to Exceptional
Circumstances Relief Payments.
Paragraphs 52D(2) (b) and (c)
These paragraphs deem income support under the Farm Family Support Scheme
to be the same as Exceptional Circumstances Relief Payments for the
purposes of taxation law. This means that recipients will have access to
the same taxation treatment including access to the "beneficiary tax
offset" - allowing a higher tax free threshold - as recipients of other
income support payments such as Exceptional Circumstances Relief Payment.
Paragraph 52D(2)(d)
This paragraph deems income support under the Farm Family Support Scheme to
be the same as Exceptional Circumstances Relief Payments for the purposes
of access to their funds (if any) in the small superannuation account. A
Special Account is kept where employers may deposit money for their
employees instead of making superannuation contributions. This allows
employees with small superannuation balances an opportunity to avoid the
erosion of those balances by fees. This means that recipients will have the
same ability to withdraw these small balances following a period in receipt
of income support as recipients of Exceptional Circumstances Relief
Payment.
Paragraph 52D(2)(e)
This paragraph deems income support under the Farm Family Support Scheme to
be the same as Exceptional Circumstances Relief Payments for the purposes
of a number of provisions in the Social Security Act 1991.
This means that the student children of farmers receiving Farm Family
Support will have access to the same concessions in relation to income and
asset testing of their Youth Allowance, including an exemption from the
Family Actual Means Test, as they would if their parent were receiving
Exceptional Circumstances Relief Payment.
It also means that Austudy and Youth Allowance recipients who are partnered
to a farmer receiving Farm Family Support have access to asset testing
concessions.
This paragraph also covers the automatic issue of a health care card to a
farmer receiving Farm Family Support as if he or she were receiving
Exceptional Circumstances Relief Payment.
This provision exempts Farm Family Support in the same way as it does
Exceptional Circumstances Relief Payment from the requirement to be
considered as an alternative form of income support before the recipient
can be considered for access to Parenting Payment or other Social Security
Benefits under hardship provisions.
Finally this provision puts Farm Family Support on the same footing as
Exceptional Circumstances Relief Payment in relation to debt recovery
matters.
Paragraph 52D(2)(f)
This paragraph provides that a health care card issued under Section 1061ZK
of the Social Security Act 1991 as allowed for in subsection (e) will be
automatically ended when the farmer ceases to receive payment under the
Farm Family Support Scheme.
Paragraph 52D(2)(g)
This paragraph puts beyond doubt that any matter that is referenced or
relates to any of the provisions above in relation to Exceptional
Circumstances Relief Payment are to be taken to also apply to Farm Family
Support.
Subsection 52D(3)
This item deems Farm Family Support to be treated the same as other
programs under the Farm Household Support Act 1992 for the purpose of
reviews of decision. This will give access to the Social Security Appeals
Tribunal and the Administrative Appeals Tribunal under Part 4 of the Social
Security (Administration) Act 1999 to farmers who wish to appeal a decision
in relation to Farm Family Support. This approach offers an independent
review and puts Farm Family Support on the same footing as Exceptional
Circumstances Relief Payment.
Part 5 of the Social Security (Administration) Act 1999 allows the
collection and use of information relevant to the farmer's application for
that purpose. It also allows for the protection and disclosure of
information to apply in respect of claimants and recipients under the Farm
Family Support Scheme. This means they will be treated as if they were
claiming or receiving Exceptional Circumstances Relief Payment under the
Farm Household Support Act 1992. It also restricts Centrelink and the
Department of Agriculture, Fisheries and Forestry in relation to the giving
of information to third parties.
Subsection 52D(4)
This item deems income support under the Farm Family Support Scheme to be
the same as Exceptional Circumstances Relief Payment for the purpose of
setting a rate of payment to farmers that may vary according to age. It
allows for youth rates of payment for those under the age of 21.
Item 2: Application
The effect of this item is to allow things done in connection with Farm
Family Support Scheme before, on or after this legislation is enacted to be
taken into account by other laws on or after the commencement of this Bill.
Provisions in this Act will only be applied in respect of payments and
services made under and for the duration of the Farm Family Support Scheme,
an executive scheme created under the Financial Management and
Accountability Act 1997. As the scheme will not be in place until 1 July
2010 this provision is to allow for retrospective application in the event
the Bill is enacted after that date.
Any retrospective application as a result is generally beneficial to
persons other than the Commonwealth. For example, it would allow for the
retrospective issue of a health care card to cover the period that a person
was in receipt of Farm Family Support for a period from 1 July 2010 until
the legislation is enacted if the legislation is enacted after 1 July 2010.