RETIREMENT ASSISTANCE FOR FARMERS SCHEME EXTENSION BILL 2000

Transcription

1 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES RETIREMENT ASSISTANCE FOR FARMERS SCHEME EXTENSION BILL 2000 EXPLANATORY MEMORANDUM ISBN: (Circulated by authority of the Minister for Veterans Affairs, The Honourable Bruce Scott MP)

2 Table of Contents Outline and Financial Impact. ii 1 Short Title.. iii 2 Commencement. iii 3 Schedule(s). iii Schedule 1 Amendment of the Social Security Act Schedule 2 Amendment of the Veterans Entitlements Act i

3 OUTLINE 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 Date of Effect Royal Assent Financial Year Net Outlays Impact $1.856m $2.255m $2.282m $2.368m ii

4 CLAUSES 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. iii

5 SCHEDULE 1 Amendment of the Social Security Act 1991 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 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 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. 1

6 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. Explanation of the Items 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 Commencement Clause 2 provides that this Schedule commences on Royal Assent. 2

7 Schedule 2 Amendment of the Veterans Entitlements Act 1986 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 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. Explanation of the Items 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 Commencement Clause 2 provides that this Schedule commences on Royal Assent. 3