Minister to ease access to financial help as well as blast Big Four banks over tax barriers
FARMING families struggling to make ends meet could be in for relief, with the government set to make it easier and faster to claim modest welfare payments.
NSW
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FARMING families struggling to make ends meet because the drought has slashed their income could be in for relief, with the government set to make it easier and faster to claim modest welfare payments.
The Farm Household Allowance provides families up to $295 a week, similar to Newstart, to help pay for things such as groceries and phone bills.
However, the application form is so detailed households who need it the most can’t spare the time to complete the paperwork or pay an accountant to do it for them.
In addition to 105 questions, the application also calls for supporting documentation such as tax returns, profit and loss statements, balance sheets and real estate details.
“I’ve spoken to farmers who were already at breaking point as their livestock was dying that had breakdowns trying to fill out the form,” farming charity Aussie Helpers founder Brian Egan said.
“It’s easily $3000 for an accountant to verify all your figures and good luck to anyone trying to do it themselves.”
The Sunday Telegraph can reveal federal Agriculture Minister David Littleproud has instructed bureaucrats to simplify the application.
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He also urged farmers to seek free help from rural financial counsellors rather than self-assess their eligibility.
Another common complaint about Farm Household Allowance is an asset test which prohibits farmers whose land is worth more than $2.55 million from claiming it, even though the farms are effectively worthless in drought.
A government source said Mr Littleproud is investigating relaxing the asset test.
Mr Littleproud will tomorrow criticise the Big Four banks — the Commonwealth, Westpac, NAB and ANZ — as well as Rabobank, for depriving farmers of a tax minimisation measure that would help farmers cope with prolonged dry spells.
In bumper years when farmers make hay from crops and livestock, they should be able to set aside up to $800,000 in tax-free “farm management deposits”, thereby lowering the amount of income they pay tax on.
In years of drought when farmers’ incomes are drastically reduced they can withdraw from the farm management deposits, which they then pay tax on in a lower tax bracket.
Rural Bank is the only bank that offers farm management deposits.
“I call on the big banks to offer farm management deposit offset accounts and help our farmers manage through the good and bad years,” Mr Littleproud said.
“Farmers grow the food we eat, including food for the bankers.”
The farm management deposits should also bring down the interest on farm loans in the same way as a mortgage offset account.
NSW Farmers president Derek Schoen will be at the meeting between Mr Littleproud and the banks and will urge the government to extend the farm management deposit scheme to rural businesses just as exposed to drought.