Source: http://clik.dva.gov.au/print/book/export/html/16159
Timestamp: 2019-09-23 14:09:32
Document Index: 602750831

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﻿ 5.5 Retirement Assistance for Farmers Scheme (RAFS)
Home > Compensation and Support Policy Library > Part 5 Income Support Allowances and Benefits > 5.5 Retirement Assistance for Farmers Scheme (RAFS)
Chapter 3.1 — 0 Financial Hardship [4]
Chapter 5.6 Pension Bonus Scheme [5]
Chapter 5.1 — 0 Retirement Assistance for Sugarcane Farmers Scheme (RASF) [6]
Chapter 9.6 Deprivation of Income & Assets [7]
Chapter 3.1 Service Pension Eligibility [8]
Chapter 3.2 Income Support Supplement (ISS) Eligibility [9]
Chapter 2.1 Claims [10]
Part IIIB, Division 8 [11] VEA
Section 5.5.3 [22]
Section 5.5.4 [24]
5.5.6/Lodgement of RAFS claim [26]
Section 5.5.7 [28]
[31]VEA?
The criteria for transfer of a farm [32] or farms under the scheme that allowed the farm property to be disregarded under the deprivation of assets rules were as follows:
the farm(s) must have been transferred as a gift to one or more eligible descendant [32] within a specified timeframe; More ? [33]
the person who transferred the farm(s) must have been a qualifying farmer [32]; at the time of transfer More ? [34]
the transfer of the property must have taken place between 14 September 1992 and 30 June 2001 or within a specified time frame allowed in certain limited circumstances; More ? [35]
the person or his or her partner was at retirement age [32] on or before 30 June 2001;
the total value of the farm(s) transferred, together with relevant farm assets [32], did not exceed $500,000; More ? [36]
during the last 3 years before the transfer was completed, the eligible descendant or descendants to whom the farm(s) was transferred were actively involved in that farm [32]; More ? [37]
Where an [glossary:eligible:] [glossary:widow or:] [glossary:former partner of a qualifying farmer:] [39] had an interest in the farm, that person may have also benefited from RAFS, even though they themselves may not have met the definition of a qualifying farmer. Such a person was still required to meet further eligibility requirements for RAFS.
5.5.3/Requirement for Transfer to Eligible Descendant [42]
5.5.4/Farmer must be a Qualifying Farmer [44]
5.5.7/Application of Assets Limit [47]
5.5.5/Active Involvement [49]
5.5.8/Application of the Farmers' Income Test [51]
5.5.4/Requirements Applicable to Widow/Widower or Former Partner [53]
According to subsection 5P(1) [11] of the VEA, an eligible descendant in relation to a person means:
held a qualifying interest [32] in the farm [32] for a continuous period of 15 years; or
During either period the person or their partner must have derived a significant part of their income [32] and contributed a significant part of their labour [32] to the development of a farm.
Refer to subsection 5P(3) and subsection 5P(4) of the VEA [11] for the full definition.
Retirement age for a person who is a war widow/widower means the pension age [32] that would apply to that person if he or she was a veteran.
Refer to subsection 5Q(1) of the VEA [11] for the full definition.
According to subsection 5P(1) of the VEA [11], a relevant farm asset in relation to a farm, means any livestock, crop, plant or equipment that is a produce of, or is used for the purposes of, the farm enterprise.
The transfer of the relevant farming assets [32] must have occurred by way of gift.
The farmer must have transferred the legal title of their farm land to the eligible descendant [32].
A farmer's ownership of land under the Torrens system can be shown on a certificate of title issued under the relevant State land law [32].
Section 49A(1) [31] VEA - Requirement for qualifying farmer
Section 49A(2) [31] VEA - Requirement for former partner
5.5.3/Criteria Applicable to the Farm Transfer Transaction [61]
According to subsection 5P(1) of the VEA [11], relevant State land law means any of the following laws:
Where a private company owned the farm [32] or farms [32], the farm(s) and relevant farm assets [32] it was necessary to firstly transfer the farm assets from the company to the farmer. The farmer could then transfer the land to the younger generation as a transfer between natural persons in order to take advantage of RAFS.
A farmer who was trustee of a trust that owned the farm and farm assets had a qualifying interest [32] in the farm(s). A retiring farmer who was a beneficiary only and not a trustee did not satisfy the rules relating to qualifying farmer [32].
Chapter 10.3 [65]
A farmer holds a qualifying interest in a farm [32] if they:
Refer to section 5P(5) of the VEA [11] for the full definition.
Where both the retiring farmer and partner owned the farm enterprise [32], both partners must have divested all their farming interests.
More ? [69]
Shares or units held in farming co-operatives essential to the running of the farm enterprise and shares that the farmer owned in other farms [32] were required to been divested.
Section 49A(2) [31] VEA - Requirement for
5.5.7/Assessment of Farm Value [72]
5.5.7/Retaining a Life Interest [74]
According to subsection 5P(1) [11] of the VEA, a farm enterprise means an enterprise carried on within any of the agricultural, horticultural, pastoral or aquacultural industries.
The eligible descendant [32] that the farm was transferred to must have had an active involvement in the farm [32] over the last three years.
a company [31]VEA?
had held a [glossary:continuous period of 15 years:] qualifying interest [91] before the gift, and during that 15 years the person or his or her partner:
contributed a significant part of their labour [32] and capital to the development of a farm, and
derived a significant part of their income [32] from that farm, or
contributing a significant part of their labour [32] and capital to a farm enterprise [32], and
derived a significant part of their income [32] from the farm enterprise.
For RAFS and RASF, a farmer or sugarcane farmer needs to derive a significant part of their income from their relevant farming enterprise in order to fulfil the requirements for a qualifying farmer [32] and qualifying sugarcane farmer [32] respectively.
An indication of a family member's [32] major source of income can be obtained from the farmer's tax return or the farm [32] or sugarcane farm [32] business tax return.
For the purposes of RAFS, a farmer held a qualifying interest in a farm [32] if they:
For the widow or former partner of a farmer to be able to participate in RAFS, the farmer had to meet the definition of a qualifying farmer [32] on the day on which the relationship between the farmer and partner ended.
To participate in RAFS the widow/widower or former partner of a farmer must have had a qualifying interest [32] in the farm of the qualifying farmer.
5.5.4/Requirement for Farmer to Hold Qualifying Interest [97]
Where farm assets were transferred to an eligible descendant [32] under RAFS, the descendant was required to establish that they had, over the three years immediately before the transfer of the farm, been actively involved in the farm [32].
Under RAFS the Commission had discretionary power to deem an eligible descendant to have been actively involved in a farm enterprise [32] where they would have been actively involved but for circumstances out of their control.
Chapter 11.9 [106]
A person was considered to be actively involved in a farm enterprise [32] if they:
contributed a significant part of their labour [32] to the farm enterprise, and
derived a significant part of their gross income [32] from the farm enterprise, or
During periods of industry downturn, some eligible descendant [32] may have been forced to obtain off-farm income as a result of the farm being unable to support the younger generation.
Section 49AB(1) [31] of VEA
Application for RAFS must be on approved form [31]VEA?
More ? [114]
Section 2.1.3 [115]
The date that transfer of a farm [32] is effected is the date that legal title is passed. This is shown on the certificate of title.
The earliest possible date that a farmer could be considered for eligibility under RAFS was the date of transfer of the legal title to the land.
A farm maybe transferred through a series of transactions (for example, farm land, then business equipment, then livestock, etc). Where this occurred the effective date of transfer under RAFS was the date of transfer of legal title to the land. The date of transfer of legal title to the land was usually the later date.
Where a farmer transferred farm property and other chattels on a particular date, they would have disposed their equitable interest but not the legal title.
Transfer of legal title is a separate transaction involving registration with the Land Titles Office within the relevant State or Territory.
In some cases, transfer of legal title could have occurred at a much later date than transfer of equitable interest.
This section outlines policy concerning the application of the $500,000 assets limit that applies to farm assets transferred under RAFS. It also covers policy concerning assessment of the value of farm assets for the purposes of RAFS.
All primary production assets and liabilities were aggregated in order to calculate the net value of the farm enterprise [32]. This included the net value of the:
For RAFS purposes, the value of the home and curtilage [32] was excluded from the farm [32] value where the farmer retained a life interest, freehold estate or leasehold interest in his or her principal home on the farm.
Where a person's farm(s) and relevant farm assets [32] were held within a trust structure, the usual rules regarding assessment of discretionary trusts did not apply. It was not the value of the farmer's interest in the trust that was to be valued, but rather the value of the farm and farm assets in which the farmer had a qualifying interest [32].
Curtilage is the land adjacent to the exempt principal home [32]. A certain amount of curtilage is disregarded for the assets test. [32]. The amount of curtilage that is exempt depends on whether the private land use test [32] described in section 5LA(3) of the VEA, or the extended land use test [32] described in section 5LA(4) of the VEA, is satisfied. Under the private land use test, up to two hectares on the same title as the principal home may be exempt. Under the extended land use test, all land on the same title as the principal home may be exempt.
Where the farmer retained a life interest in the dwelling house on the farm [32], and any surrounding land of up to 2 hectares (ie curtilage), the farmer was treated as a homeowner.
More ? [123]
If local zoning laws allowed, it was possible for the farmer to retain the principal residence by excising the house and curtilage [32] from the remainder of the farm and retain ownership of that portion. This was permitted, provided that the area of land retained did not exceed the 2 hectare curtilage limit.
Chapter 9.2 [125]
Chapter 9.6 [7]
Prior to 1 July 2001, The $500,000 limit applied to the combined value of all farms [32] and farm assets divested. That is, it was not on a farm by farm basis.
A retiring farmer was involved in a farm enterprise [32] valued at $600,000. His son was a partner, holding a one-third share in the property. The value of the farm assets being divested was $600,000 less the son's share of $200,000 = $400,000. Therefore the retiring farmer was able to access RAFS.
VEA ? [139]
Section 49J(1) [31] VEA - Application of requirement
Section 49J(4) [31] VEA - Definition of maximum basic rate of age service pension
VEA ? (go back) [140]
Source URL (modified on 20/10/2014 - 3:25pm): http://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/55-retirement-assistance-farmers-scheme-rafs
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[5] http://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/56-pension-bonus-scheme
[6] http://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/510-retirement-assistance-sugarcane-farmers-scheme-rasf
[7] http://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/96-deprivation-income-and-assets
[8] http://clik.dva.gov.au/compensation-and-support-policy-library/part-3-income-support-eligibility/31-service-pension-eligibility
[9] http://clik.dva.gov.au/compensation-and-support-policy-library/part-3-income-support-eligibility/32-income-support-supplement-iss-eligibility
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[108] http://clik.dva.gov.au/user/login?destination=node/16185%23comment-form
[109] http://clik.dva.gov.au/user/login?destination=node/16210%23comment-form
[110] http://clik.dva.gov.au/user/login?destination=node/16190%23comment-form
[111] http://clik.dva.gov.au/book/export/html/16159#tgt-cspol_part5_ftn147
[112] http://clik.dva.gov.au/book/export/html/16159#ref-cspol_part5_ftn147
[113] http://clik.dva.gov.au/user/login?destination=node/16241%23comment-form
[114] http://clik.dva.gov.au/book/export/html/16159#tgt-cspol_part5_ftn148
[115] http://clik.dva.gov.au/compensation-and-support-policy-library/part-2-applying-pension/21-claims/213-lodging-or-withdrawing-claims
[116] http://clik.dva.gov.au/book/export/html/16159#ref-cspol_part5_ftn148
[117] http://clik.dva.gov.au/user/login?destination=node/16217%23comment-form
[118] http://clik.dva.gov.au/user/login?destination=node/16164%23comment-form
[119] http://clik.dva.gov.au/user/login?destination=node/16184%23comment-form
[120] http://clik.dva.gov.au/book/export/html/16159#tgt-cspol_part5_ftn149
[121] http://clik.dva.gov.au/book/export/html/16159#ref-cspol_part5_ftn149
[122] http://clik.dva.gov.au/user/login?destination=node/16254%23comment-form
[123] http://clik.dva.gov.au/book/export/html/16159#tgt-cspol_part5_ftn150
[124] http://clik.dva.gov.au/book/export/html/16159#tgt-cspol_part5_ftn151
[125] http://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation
[126] http://clik.dva.gov.au/book/export/html/16159#ref-cspol_part5_ftn150
[127] http://clik.dva.gov.au/book/export/html/16159#ref-cspol_part5_ftn151
[128] http://clik.dva.gov.au/user/login?destination=node/16292%23comment-form
[129] http://clik.dva.gov.au/book/export/html/16159#tgt-cspol_part5_ftn152
[130] http://clik.dva.gov.au/book/export/html/16159#tgt-cspol_part5_ftn153
[131] http://clik.dva.gov.au/book/export/html/16159#tgt-cspol_part5_ftn154
[132] http://clik.dva.gov.au/book/export/html/16159#tgt-cspol_part5_ftn155
[133] http://clik.dva.gov.au/book/export/html/16159#ref-cspol_part5_ftn152
[134] http://clik.dva.gov.au/book/export/html/16159#ref-cspol_part5_ftn153
[135] http://clik.dva.gov.au/book/export/html/16159#ref-cspol_part5_ftn154
[136] http://clik.dva.gov.au/book/export/html/16159#ref-cspol_part5_ftn155
[137] http://clik.dva.gov.au/user/login?destination=node/16307%23comment-form
[138] http://clik.dva.gov.au/user/login?destination=node/16301%23comment-form
[139] http://clik.dva.gov.au/book/export/html/16159#tgt-cspol_part5_ftn156
[140] http://clik.dva.gov.au/book/export/html/16159#ref-cspol_part5_ftn156
[141] http://clik.dva.gov.au/user/login?destination=node/16306%23comment-form
[142] http://clik.dva.gov.au/user/login?destination=node/16186%23comment-form