RETIREMENT ASSISTANCE FOR FARMERS

SCHEME EXTENSION BILL 2000

Outline and Financial Impact

These amendments to the Social Security Act 1991 and the Veterans’ Entitlements Act 1986 extend the operation of the Retirement Assistance for Farmers Scheme to 30 June 2001.

Date of Effect

Royal Assent

2000 - 01

$1.856m

2001 - 02

$2.255m

2002 - 03

$2.282m

2003 - 04

$2.368m

Short Title

Clause 1 sets out how the Act is to be cited.

Commencement

Clause 2 sets out the commencement date of the Act.

Schedule(s)

Clause 3 provides that the Acts specified in Schedule 1 and Schedule 2 are amended as set out in the items of those Schedules.

Overview

These amendments to the Social Security Act 1991 extend the operation of the Retirement Assistance for Farmers Scheme from 14 September 2000 to

30 June 2001.

Background

The Retirement Assistance for Farmers Scheme commenced on

15 September 1997, providing a “window of opportunity” for age pension age farmers and their partners to transfer their farm and farm assets, up to a maximum of $500,000, to the next generation without affecting their access to the age pension.  Similarly, a non-pension age partner may qualify for one of a number of other social security payments (such as partner allowance) without having the value of the transferred interest affect access to that payment.

To be eligible farmers have to :

·          show a long term involvement in the farm (or in farming);

·          have an average income of less than the applicable age pension rate over the 3 years prior to the transfer (from both farm and non-farm activities);

·          be of age pension age or reach that age before the Scheme’s end date, originally 14 September 2000.  For farmers who are members of a couple, at least one member of the couple must either be of age pension age or reach that age before the Scheme’s end date.

The person of the younger generation, to whom the farm and farm assets are transferred, needs to show that he or she has been actively involved with the farm during the 3 years immediately before the transfer.

Farmers need to meet all other age pension eligibility criteria in order to qualify for payment of that pension.

Explanation of the Changes

These amendments to the Social Security Act will extend the operation of the Retirement Assistance for Farmers Scheme from 14 September 2000 to 30 June 2001, an  extension of 9 months.

This will provide a continued opportunity for low-income age pension aged farmers to transfer their farms to a younger generation without the value of this asset affecting their ability to access the age pension. 

It means that an eligible farmer, or their partner, now has until 30 June 2001 to transfer the farm to the younger generation and also has until 30 June 2001 to reach age pension age.

No other eligibility criteria or conditions of the Scheme have changed.

Items 1 - 6

Items 1 - 6 extend the operation of the Retirement Assistance for Farmers Scheme for an extra 9 months.  Instead of the Scheme ending on

14 September 2000, the Scheme will now operate until 30 June 2001. 

Commencement

Clause 2 provides that this Schedule commences on Royal Assent.

Overview

These amendments to the Veterans’ Entitlements Act 1986 (VEA) extend the operation of the Retirement Assistance for Farmers Scheme from

14 September 2000 to 30 June 2001.

Background

The Retirement Assistance for Farmers Scheme provides veterans and their partners with a “window of opportunity” for an inter-generational transfer of the farm and farm assets without that transfer affecting their eligibility for a Veterans’ Affairs income support payment.

The Scheme operates in exactly the same way as it does for persons covered by the Social Security Act.

Explanation of the Changes

These amendments to the VEA will extend the operation of the Retirement Assistance for Farmers Scheme from 14 September 2000 to 30 June 2001, a  period of 9 months. 

This will provide a continued opportunity for low-income farmers to transfer their farms to a younger generation without the value of this asset affecting their ability to access a Veterans’ Affairs income support payment. 

It means that an eligible farmer, or their partner, now has until 30 June 2001 to transfer the farm to the younger generation and also has until 30 June 2001 to reach age pension age.

No other eligibility criteria or conditions of the Scheme have changed.

Items 1 - 6

Items 1 - 6 extend the operation of the Retirement Assistance for Farmers Scheme for an extra 9 months.  Instead of the Scheme ending on

14 September 2000, the Scheme will now operate until 30 June 2001. 

Commencement

Clause 2 provides that this Schedule commences on Royal Assent.