Review of the Farm Household Allowance (FHA)

​​Consultation on the Review has now closed. Further information on the Review’s consultation process can be found on the Have your Say page.​

On 29 July 2018, the Minister for Agriculture David Littleproud announced a review of the Farm Household Allowance (FHA), which provides help for farmers facing hardship, particularly during drought.

The FHA originally commenced on 1 July 2014 and formed part of the Commonwealth’s contribution to the 2013 Intergovernmental Agreement on National Drought Program Reform. As it has now been in operation for over four years, the Australian Government has decided it is timely to review whether the current settings of the program:

  • are reaching the farmers who are in need,
  • are effective and efficient in meeting the original objectives to provide assistance while assisting farmers to improve long-term financial circumstances,
  • remain fit for purpose; and
  • contribute to an enduring approach to income support for farmers in hardship, including drought.

The Review will make recommendations to Government in the first half of 2019.

The Review is being conducted by an expert panel in consultation with stakeholders. The expert panel includes:

  • Mrs Michele Lawrence (Chair), member of the Agricultural Industry Advisory Council and dairy farmer, Tasmania;
  • Ms Georgie Somerset, Deputy Chair of Agforce and cattle farmer, Queensland; and
  • Professor Robert Slonim, Professor of Economics at the University of Sydney and former director of the Australian Government’s Behavioural Economics Team, New South Wales.

The panel is conducting a public submission process to ensure all interested stakeholders are given the opportunity to participate. The panel would then provide its findings, deliberations and recommendations in a report for Government consideration.

FHA Review - Terms of Reference

The Farm Household Allowance (FHA) is the Commonwealth Government’s income support payment that supports farmers and their partners experiencing financial hardship, regardless of the source of that hardship. The program provides eligible farmers with up to four cumulative years of support along with assistance through planning and training for long-term financial improvements. On 19 June 2018, the Government announced access to the payment would be extended from three to four years, with new settings to begin from 1 August 2018. Then, on 5 August 2018, the Government announced an increase to the assets test eligibility threshold from $2.6 million to $5.0 million as well as two special supplementary lump sum payments in recognition of the severity of the current drought.

The FHA originally commenced on 1 July 2014 and formed part of the Commonwealth’s contribution to the 2013 Intergovernmental Agreement on National Drought Program Reform. As it has now been in operation for over four years, the Australian Government has decided it is timely to review whether the current settings of the program:

  • are effective and efficient in meeting the original objectives to provide assistance while assisting farmers to improve long-term financial circumstances,
  • remain fit for purpose; and
  • contribute to an enduring approach to income support for farmers in hardship, including drought.

The Review will occur in the second half of 2018 and make recommendations to Government in the first half of 2019.

The Review will be conducted by an expert panel in consultation with stakeholders. The committee will conduct a public submission process to ensure all interested stakeholders are given the opportunity to participate. The panel would then provide its findings, deliberations and recommendations in a report for Government consideration.

Guiding principles

Providing recommendations to government on an enduring approach to income support for farmers in hardship, including drought. Recommendations should be in line with the policy framework of the current Intergovernmental Agreement on National Drought Program Reform or its replacement.

Scope of the review

The review will:

  • Examine barriers to take up.
  • Examine the current time limit in the context of the 2009 Productivity Commission Inquiry into Drought Support recommendation that income support payment to farmers be limited to a maximum claim per farm household for three years out of every seven in order to avoid long term welfare dependency.
  • Assess whether current reciprocal arrangements are effective in assisting farmers to improve long-term financial circumstances.
  • Assess whether it has been effective, and whether it is appropriate, to have one program with the dual objectives of both providing support and assisting structural change.
  • Assess the efficacy of recipients’ ability to come on and off payment, noting it was a key policy setting in establishing the program, including looking into how it is being utilised, whether it is achieving its intended outcomes and/or possible alternative models for implementation.
  • Assessing the suitability and effectiveness of current policy settings including:
    • the current income eligibility tests;
    • the current assets eligibility tests;
    • Farm Financial Assessments;
    • Financial Improvement Agreements; and
    • activity supplement.
  • Assessing the suitability and effectiveness of current delivery settings including:
    • the delivery model including the role of Farm Household Case Officers;
    • the application process;
    • involvement by the Rural Financial Counselling Service; and
    • statutory timeframes for the provision of documentation.

Out of scope

The following will be out of scope for the review:

  • Significant increases to Commonwealth expenditure
  • Removing income support to farmers
  • Removing means testing
  • Making assistance ongoing
  • Reinstatement of drought or exceptional circumstance declarations
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