FHA Forced Disposal of Livestock

May
2015
Farm household
allowance
Forced disposal
of livestock
Farm Household Allowance (FHA) assists eligible farmers
and their partners who are experiencing financial hardship
to improve their long-term financial situation. FHA provides
up to three years of income support, which is designed
to help recipients meet basic household needs and is an
opportunity to take steps to improve their circumstances.
FHA is paid fortnightly at a rate equivalent to Newstart
Allowance (or Youth Allowance for those under 22 years of age).
Eligibility Basics
You must:
• be a farmer* or the partner of a farmer
• meet an income and assets test
• meet residence requirements
• be willing to undertake a Farm Financial Assessment
• be willing to enter into a Financial Improvement Agreement to
help you improve your financial circumstances.
*If you are the farmer you must contribute a significant part of your
labour and capital to the farm enterprise based on specific criteria.
Income and asset assessment and the
forced disposal of livestock
There is no special treatment of income or assets generated from
the forced disposal of livestock for the purposes of assessing
income or assets for FHA or other social security payments.
However, preferential tax treatments are available.
What is forced disposal
of livestock?
• From time to time, farmers
are forced to quickly sell,
euthanise or otherwise
dispose of some or all of their
stock without realising the full
market value of the animal.
• This may be as a result
of a biosecurity hazard, a
natural disaster or prolonged
drought. When this occurs
it is referred to as ‘forced
disposal of livestock’.
Don’t self assess! Call DHS
on the Farmer Assistance
Hotline: 132 316
The Australian Government
Department of Human Services
(DHS) processes FHA applications
and can help you to assess your
situation.
Department of Agriculture
Farm household allowance – forced disposal of livestock
Tax treatment of forced disposal of livestock
If you have been forced to dispose of livestock you can elect to:
• spread the profit earned from the forced disposal or death of livestock over
a period of five years following the year of disposal, or
• defer the profit and use it to reduce the cost of replacement livestock in the
disposal year or any of the next five income years.
Any unused part of the profit is included in assessable income in the
fifth income year.
You can elect to spread or defer profits if you dispose of stock or stock
dies because:
• land is compulsorily acquired or resumed under an Act
• a state or territory leases land for a cattle tick eradication campaign
• pasture or fodder is destroyed by fire, drought or flood and you will use
the proceeds of the disposal or death mainly to buy replacement stock or
maintain breeding stock for the purpose of replacing the livestock
• they are compulsorily destroyed under an Australian law for the control of
a disease (including bovine tuberculosis) or they die of such a disease, or
• you receive official notification under an Australian law dealing with
contamination of property.
For more information on tax rules relevant to primary producers visit:
ato.gov.au/Business/Primary-producers
Need more information or help?
• Call the Farmer Assistance Hotline: 132 316
• Speak to your Financial Advisor or Rural Financial Counsellor
Contact
132 316
For more information
agriculture.gov.au/fha
DA1925_0515
• FHA Guidelines are available at agriculture.gov.au/fha