EXPLANATORY STATEMENT

 

Select Legislative Instrument 2010 No. 109

 

Issued by the Authority of the Minister for Agriculture, Fisheries and Forestry

 

Farm Household Support Act 1992

 

Farm Household Support Amendment Regulations 2010 (No. 1)

 

 

 

The Farm Household Support Act 1992 (the Act) establishes the exceptional circumstances relief payment for farmers, and two categories of small business. This payment provides financial assistance to eligible individuals operating farms or small businesses who are experiencing hardship due to the effect of exceptional circumstances.

Subsection 58(1) of the Act provides that the Governor‑General may make regulations prescribing all matters required or permitted by the Act to be prescribed, or necessary and convenient to be prescribed for carrying out or giving effect to the Act.

The Regulations amend the Farm Household Support Regulations 1993 (the Principal Regulations) to allow small businesses to access certain Exceptional Circumstance Relief Payments, and extend the $20,000 off-farm and non-business salary and wages exemption for farmers and small business operators for a further year as the current drought continues.

Under subsection 8A(5) of the Act, a small business operator is able to receive financial assistance where in a period of normal turnover, 70 per cent or more of the income of the business is derived from the supply of goods or services to farm enterprises, where the farm enterprise is situated in an exceptional circumstances declared area. The gross income of the business must also have been significantly reduced due to the effect of the exceptional circumstances.

Under subsection 8A(7) of the Act, a small business operator is able to receive the exceptional circumstances relief payment where their business is situated in an agricultural dependent town or locality, situated in an exceptional circumstance declared area, with a population of less than 10,000.

Sections 6C(1) and 6C(2) of the Act and the Principal Regulations previously provided that exceptional circumstances relief payments for small businesses were not payable to an eligible person in respect of any period after 30 June 2010.

The Regulations extend the closing day for qualification for exceptional circumstances relief payments for eligible small businesses under Subsections 6C(1) and 6C(2) to 30 June 2011 so that small business operators can continue to access payments as the current drought endures.

Subsections 24A(4) and 24AA(5) of the Act provide respectively for $20,000 in off-farm salary and wages to be disregarded from a farmer’s income and $20,000 in salary and wages from other sources to be disregarded from a small business operator’s income for the purposes of calculating a rate of an exceptional circumstances relief payment.

Subsection 24A (4) of the Act and the Principal Regulations previously provided that the closing day for the $20 000 off-farm salary and wages exemption for farmers was 30 June 2010. And subsection 24AA (5) currently provides that the closing day for the $20 000 salary and wages exemption for small businesses is at the end of the 2009-10 financial year.

The Regulations prescribe later closing days for both exemptions of 30 June 2011 to permit farmers and small businesses access to exemptions as the current drought endures.

The detail of the Regulations is set out in Attachment A.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

Consultations

No external consultation was undertaken in the process of preparing the regulatory change, as the change was announced as part of the Budget. The regulation changes will allow eligible farmers and small business operators continue to receive support during the current drought.

The Office of Best Practice Regulation (OBPR), the Office of Legislative Drafting and Publishing (OLDP) and Centrelink were consulted in the preparation of this regulatory change.

Amendments are minor in nature and a Regulatory Impact Statement was not required.

Attachment A

 

 

 

Farm Household Support Amendment Regulations 2010 (No. 1)

 

Regulation 1 Name of Regulations

 

This regulation states that the Regulations are called the Farm Household Support Amendment Regulations 2010 (No. 1).

 

Regulation 2 Commencement

 

This regulation provides for the Regulations to have commenced on 1 July 2010.

 

Regulation 3 Amendment of Farm Household Support Regulations

 

This regulation provides that Schedule 1 amends the Farm Household Support Regulations 1993.

 

Schedule 1 Amendment

Item [1] Regulation 4B (1)

 

This item amends regulation 4B (1) and provides that the prescribed day for Subsection 6C (1) of the Farm Household Support Act 1992 is 30 June 2011.

 

This item prescribes the closing day for qualification for exceptional circumstances relief payments for eligible small businesses so that small business operators can continue to access payments as the current drought endures.

 

Item [2] Regulation 4B (2)

 

This item amends regulation 4B (2) and provides that the prescribed day for Subsection 6C (2) of the Farm Household Support Act 1992 is 30 June 2011.

 

This item prescribes the closing day for qualification for exceptional circumstances relief payments for eligible small businesses so that small business operators can continue to access payments as the current drought endures.

 

 

Item [3] Regulation 6

 

This item prescribes a later closing day for the $20 000 off-farm salary and wages exemption of 30 June 2011 to permit farmers to access the exemptions as the current drought endures. The long-term nature of this drought has meant that many farm families have had to increase their amount of off-farm work. The off-farm income test exemption enables farmers to earn an extra $20,000 non-farm income without affecting their eligibility for benefits and many more farm families continue to be eligible for support.

 

Item [4] Regulation 7

 

This item prescribes a later closing day for the $20 000 salary and wages from other sources exemption of 30 June 2011 to permit small businesses operators access to the exemption as the current drought endures. The long-term nature of this drought has meant that many small businesses have had to increase their amount of non-business income. The income test exemption enables small business operators to earn an extra $20,000 non-business income without affecting their eligibility for benefits.