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2016-2017-2018
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
FARM HOUSEHOLD SUPPORT
AMENDMENT (TEMPORARY MEASURES) BILL 2018
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Agriculture and Water Resources,
the Hon. David Littleproud MP)
FARM HOUSEHOLD SUPPORT AMENDMENT
(TEMPORARY MEASURES) BILL 2018
GENERAL OUTLINE
The Farm Household Support Amendment (Temporary Measures) Bill 2018 (the Bill) will
amend the Farm Household Support Act 2014 (the FHS Act) to provide a temporary increase
to the farm assets limit and a new, two-part payment supplement to qualifying Farm
Household Allowance (FHA) recipients.
The FHA program provides qualifying farmers and their partners one-on-one case support, an
Activity Supplement for planning and training and an income support payment, paid at the
same rate as Newstart Allowance, to help meet household expenses.
FHA is subject to an income test in line with Newstart Allowance and a tailored, two tier
assets test. The first tier of the assets test relates to non-farm assets and is the same as
Newstart Allowance. The second tier relates to net farm assets and is currently set at $2.635
million, indexed annually (whether they are single or partnered). In order to be eligible for
FHA farmers must meet income and both the non-farm and farm assets tests.
The Bill will operate to provide a two-part payment to qualifying FHA recipients from
1 September 2018 until 1 June 2019. The Bill also increases the net farm assets limit from
$2.635 million to $5 million from 1 November 2018 until 30 June 2019.
FINANCIAL IMPACT STATEMENT
It is estimated the FHA supplement and temporary increase to the farm assets test could cost
the Australian Government $158 million over four years from 2018-19, including
implementation costs.
However, FHA is uncapped and demand-driven, therefore expenditure is based on demand.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Farm Household Support Amendment (Temporary Measures) Bill 2018
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview of the Bill
The Farm Household Support Amendment (Temporary Measures) Bill 2018 (the Bill) will
amend the Farm Household Support Act 2014 (the FHS Act) to provide a temporary increase
to the farm assets limit and a new, two-part payment supplement to qualifying Farm
Household Allowance (FHA) recipients.
Human rights implications
The Bill engages, or has the potential to engage, the following rights:
Article 9 of the International Covenant on Economic, Social and Cultural
Rights (the ICESCR) - right to social security
Article 11(1) of the ICESCR - right to an adequate standard of living, including food,
water and housing
Article 12(1) of the ICESCR - right to health
Article 6 of the ICESCR - right to work and rights in work.
Right to Social Security
Article 9 of the ICESCR recognises the right to social security. The United Nations
Committee on Economic, Social and Cultural Rights (CESCR) has stated that the term 'social
security' in article 9 encompasses the right to access and maintain benefits, whether in cash
or in kind to secure protection from (a) lack of work related income; (b) unaffordable
healthcare; or (c) insufficient family support.1
The Bill provides a time-limited increase to the farm assets test, from $2.635 million (indexed
annually) to $5 million. People who receive FHA will be entitled to continue claiming the
$5 million farm assets limit until they are required to lodge an application (if ever) for FHA
after 30 June 2019. For those with farm asset values between the current farm assets limit and
the proposed $5 million temporary increase, the Bill will operate to increase access to social
security. For FHA recipients who qualify for the FHA supplement, the Bill will provide
additional financial assistance that will help to pay for a range of expenses, including
healthcare, family expenses and other costs normally met with household income.
1 CESCR, General Comment No 19 (2008), paragraph 2.
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Summary
The Bill engages and promotes the right to social security enshrined in Article 9 of the
ICESCR.
Right to an adequate standard of living, including food, water and housing
Article 11(1) of the ICESCR recognises the right to an adequate standard of living, including
food, water and housing. States have an obligation to ensure the availability and accessibility
of the resources necessary for the progressive realisation of this right. The ICESCR has stated
that the core content of the right to adequate food implies both the availability and (economic
and physical) accessibility of food.2
The livelihood of farmers is subject to a variety of factors beyond their control. By providing
the FHA supplement and temporarily increasing the farm assets limit, the Bill seeks to
promote this right through increased access to financial and social support during times of
hardship.
FHA recipients are, subject to eligibility criteria, also able to access rent assistance. By
temporarily easing access to the FHA program, the Bill will also protect the right to an
adequate standard of housing.
Summary
The Bill engages and promotes the right to an adequate standard of living, enshrined in
Article 11(1) of the ICESCR.
Right to health
Article 12(1) of the ICESCR recognises the right of all individuals to enjoy the highest
attainable standard of physical and mental health.
The CESCR has stated that this right is not confined to the right to health care.3 The CESCR
considers that Article 12 more broadly acknowledges that the right to health embraces a wide
range of socio-economic factors that promote conditions in which people can lead a healthy
life, and extends to the underlying determinants of health, such as food and nutrition,
housing, access to safe and potable water and adequate sanitation, safe and healthy working
conditions, and a healthy environment.
By temporarily increasing the farm assets limit, the Bill encourages access to all measures
provided under the FHA program. In particular, the ancillary benefits contained in Part 2,
Division 8, Subdivisions A and B will be available to those who are entitled to access FHA
due to the increased farm assets limit.
For example, FHA recipients are granted automatic access to a Health Care Card (under
Part 5 of the Bill that applies the social security law to FHA); and, subject to eligibility
criteria, rent assistance and Pharmaceutical Allowance under Part 2, Division 8,
Subdivisions A and B of the Act.
2 ICESCR, General Comment No 12 (1999), paragraphs 8 and 13.
3 ICESCR, General Comment No 14 (2000), paragraph 4.
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The Health Care Card assists FHA recipients with certain health costs by allowing access to
specific services at a concessional rate. Rent assistance is a supplementary payment added to
FHA of recipients in commercial rental accommodation, and Pharmaceutical Allowance
helps with the cost of accessing prescription pharmaceuticals under the Pharmaceutical
Benefits Scheme. These measures are beneficial to FHA recipients, promoting conditions
required to live a healthy life.
Summary
The Bill engages and promotes the right to health in Article 12(1) of the ICESCR.
Right to work
Article 6 of the ICESCR protects the right to work. Article 6(2) provides that, to achieve the
full realisation of this right, States should take steps to include "technical and vocational
guidance and training programmes, policies and techniques to achieve steady economic,
social and cultural development and full and productive employment under conditions
safeguarding fundamental political and economic freedoms to the individual".
The Bill will operate to make FHA more accessible to people with higher values of farm
assets but who still need support. While receiving payment, FHA recipients are able to access
an Activity Supplement to undertake agreed training and assessment activities as prescribed
in their Financial Improvement Agreement. By increasing access to the program, the Bill will
encourage access to technical and vocational training skills for new FHA recipients with farm
asset values higher than the current farm asset value limit, but lower than the proposed
$5 million limit. Indirectly, engaging in technical and vocational training will support these
recipients to increase their access to work.
Conclusion
The Bill is compatible with human rights as it promotes the protection of, and does not limit,
the human rights that it engages with.
(Circulated by authority of the Minister for Agriculture and Water Resources,
the Hon. David Littleproud MP)
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NOTES ON AMENDMENTS
Preliminary
Clause 1 Short Title
Clause 1 provides for the short title of this Act to be the Farm Household Support
Amendment (Temporary Measures) Act 2018.
Clause 2 Commencement
Clause 2 provides for the commencement of each provision in the Bill, as set out in the table.
Subclause 2(1) provides that each provision of the bill specified in column 1 of the table
commences, or is taken to have commenced, in accordance with column 2 of the table. Any
other statement in column 2 has effect according to its terms.
Item 1 in the table provides that the whole of the Bill commences on the day after the Bill
receives the Royal Assent or 1 September 2018, whichever is earlier.
Clause 3 Schedules
Clause 3 provides that legislation that is specified in a Schedule to the Bill is amended or
repealed as set out in the applicable items in the Schedule concerned, and any other item in a
Schedule to the Bill has effect according to its terms.
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Schedule 1--Farm assets value limit
Overview
Schedule 1 to the Bill will amend the Farm Household Support Act 2014 to provide a
temporary increase to the farm assets value limit. Schedule 1 also provides for related
transitional measures, grandfathering and indexation rules.
Farm Household Support Act 2014
Item 1 Section 34
Item 1 substitutes section 34. The new section will temporarily increase the farm assets value
limit to $5 million. The temporary increase to the farm assets limit will commence on
1 November 2018 and end on 30 June 2019 (inclusive).
For people who have at least one day of payment on Farm Household Allowance (FHA)
during the temporary increase to the farm asset limit and continue to receive FHA after
30 June 2019, the provision will ensure that the farm assets value limit will continue to be
$5 million until they are required to reapply for FHA (if ever).
The increased $5 million farm assets value limit will not be subject to indexation, including
for recipients who continue to receive FHA under the $5 million farm assets value limit after
30 June 2019.
On 1 July 2019, the farm assets value limit that applied prior to 1 November 2018 will apply
to those people not affected by subsection 34(4). This limit will be indexed again on
1 July 2019, building on the effect of existing indexation.
Item 2 Section 95 (table item 3)
Item 2 amends section 95, table item 3 to ensure a reference to section 34 is updated to be a
reference to section 34(2).
Item 3 Section 95 (table item 5)
Item 3 amends section 95, table item 5 to ensure a reference to section 34 is updated to be a
reference to section 34(2).
Item 4 Section 95 (table item 5)
Item 4 amends section 95, table item 5 to set the first day of indexation as 1 July 2019.
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Schedule 2--FHA supplement
Overview
Schedule 2 to the Bill will amend the Farm Household Support Act 2014 to provide a two-
part FHA supplement to qualifying FHA recipients.
Farm Household Support Act 2014
Item 1 Section 4
Item 1 omits and substitutes the existing overview with an overview that includes information
on the FHA supplement.
Item 2 Subsection 5(1)
Item 2 amends subsection 5(1) to insert definitions for FHA supplement and qualifying
period.
FHA supplement means a supplement provided under Part 4A of the Farm Household
Support Act 2014.
Qualifying period has the meaning given by subsection 89B(2).
Item 3 After Part 4
Item 3 inserts a new Part 4A after Part 4 in the Farm Household Support Act 2014. Part 4A
provides provisions required to create the FHA supplement.
Section 89A provides a simplified outline of Part 4A.
Section 89B provides the rules for who is qualified for the FHA supplement for each
qualifying period.
If, by operation of the social security law, a person is deemed to have had a payable day
within a payment period, that person will qualify for the FHA supplement for that period.
There are two periods in which a person can qualify to receive the FHA supplement - the
first period is between 1 September 2018 and 1 December 2018 and the second period is
between 2 December 2018 and 1 June 2019. Section 89C provides for the method to calculate
the rate of FHA supplement a person is entitled to receive. For example:
a person paid FHA on any day in the first period will receive one supplement payment
($3,000 for a person who is a member of a couple and $3,600 in all other
circumstances) - paragraph 89C(1)(a) and paragraph 89C(1)(b) refer; and
a person paid FHA on any day in the second period will receive one supplementary
payment ($3,000 for a person who is a member of a couple and $3,600 in all other
circumstances) - section 89C(1)(a) and section 89C(1)(b) refer.
A person will only be entitled to one payment in each qualifying period, for a maximum of
two payments over both qualifying periods, if they are eligible for both periods. However, if a
person is entitled to one payment in each qualifying period, they may be paid both payments
as one lump sum.
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Subsection 89C(2) provides for circumstances in which an overpayment will not be
recoverable as a debt due to the Commonwealth. Farm Household Allowance requires
recipients to estimate their business income in order to calculate their rate - as farm income is
often hard to predict, this estimate is often incorrect. While overpayments are normally repaid
to the Commonwealth, recipients that have been underpaid will receive a supplementary
payment.
FHA supplement is a short-term relief payment for people facing particular hardship.
Subsection 89C(2) ensures that the rules peculiar to FHA do not result in a debt arising
against a payment of FHA supplement. However, subsection 89C(2) allows for debt recovery
if an FHA supplement is obtained by fraud.
Item 4 Section 90
Item 4 omits and substitutes the existing simplified outline with an overview that includes
information on the FHA supplement.
Item 5 Section 91 (example)
Item 5 amends the existing example to include a reference to FHA supplement.
Item 6 Subsection 93(1) (table item 6)
Item 6 amends table item 6 of subsection 93(1) to include a reference to FHA supplement.
This amendment ensures that a reference to a social security payment in the Social Security
Act 1991 will include a reference to activity supplement, farm financial assessment
supplement and FHA supplement.
Item 7 Section 95 (at the end of the table)
Item 7 modifies the application of the Social Security Act 1991 to prevent social security debt
recovery being applied against an FHA supplement payment. FHA supplement is a relief
payment and should not be subject to Commonwealth debt repayment.
Item 8 Subsection 105(3)
Item 8 amends subsection 105(3) to include a reference to Part 4A (FHA supplement). The
amendment ensures that payments are to be made out of the Consolidated Revenue Fund,
which is appropriated accordingly.
Social Security (Administration) Act 1999
Item 9 After section 12K
Item 9 inserts a new section 12L to ensure that a claim is not required for a person to receive
FHA supplement.
Item 10 Subsection 47(1) (after paragraph (hw) of the definition of
lump sum benefit)
Item 10 inserts FHA supplement into the list in subsection 47(1).
Item 11 After section 47CA
Item 11 inserts section 47CB, which provides for rules of when, and how, a person should be
paid FHA supplement.
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FHA supplement requires administrative flexibility to ensure efficient delivery. Section
47CA provides the Secretary a broad discretion to determine the most appropriate day and
method of payment.
For example:
The Secretary may determine that the dates of payment for the first FHA supplement
period will be 1 September 2018 and 1 December 2018, with the payment being made
by electronic transfer.
The Secretary may also determine that the dates of payment for the second FHA
supplement period will be 1 March 2019 (including any outstanding payment from the
first period) and 1 June 2019 by electronic transfer.
The Secretary's decision making process will remain constrained by the normal principles of
administrative law.
Item 12 Subclause 1(1) of Schedule 1
Item 11 inserts a definition of FHA supplement in subclause 1(1) of Schedule 1 to the Social
Security (Administration) Act 1999.
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