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Please read the letters below. The letter to the Prime Minister of 13 May 2015 was also sent to relevant Liberal and National Ministers, and Members of Federal Parliament representing the Australian Labor Party, the Greens and independents. If your Member of Federal Parliament is a Liberal or National, phone their office and tell them that if the discrimination against senior farmers is not removed by the next Federal Election, you will 'Vote Them Last' on the ballot paper.

ACTION: Download Desktop image showing the 82 mean Members of Parliament and 'Vote Them Last' on 2 July 2016. (Install on computer as Desktop or Screensaver image and use option 'To Fit' the screen)

See a Senior Farmers feature story on ABC Landline. Read a Media Release issued by Senior Farmers.

Senior Farmer, Manjimup, Western Australia, 13 May 2015

Prime Minister, Parliament House, Canberra

Dear Prime Minister

Age Pension Assets Test Change Unfair to Part Pensioner Farmers

I write to bring to your attention an unfair impact the proposed change to the Age Pension Assets Test will have on part pensioner farmers. ABS Census data shows in 2011 almost a quarter (23%) of farmers were aged 65 years or over, compared with just 3% of people in other occupations. These farmers produce a large amount of the food in Australia that adds value to National Accounts, and many are part pensioners.

Minister for Social Services Scott Morrison plans to decrease the Age Pension Assets Test threshold from $1,150,000 to $823,000, excluding the family home. This will reduce the part pension entitlement of farmers where only their home and two hectares of their land is excluded from the Assets Test.

Minister Morrison says the changes to the Assets Test will mean that 91,000 current part pensioners will no longer qualify for the pension and a further 235,000 will have their part pension reduced. The effect on older farmers in regional Australia will be harsh.

While pensioners in cities and towns are not asset tested for the value of the land on which their home is located, farmers must live continuously for 20 years on their property and demonstrate it is productive before their land is excluded from the Assets Test. This illogical condition alone already disadvantages farmers from accessing the pension. The proposed change to the Assets Test by $327,000 means many farmers will have their part pension either withdrawn or reduced, because of the value of the land on which they reside and farm taking them beyond the Assets Test.

For example, a farming couple with assessable assets of $800,000 which includes their farm land (eg $400,000) will have their part pension reduced from $15,365 to $1,773, a reduction of $13,592. The ‘Rebalance the Assets’ table distributed by Minister Morrison suggests such a couple draw down on assets to replace lost $13,592 in pension. However, farmers have relatively low ‘liquid assets’ to compensate. The Assets Test includes the value of farm machinery, sheds and stock which are required for production. As self-employed persons, farmers have not received employer contributions to superannuation.

These harsh Assets Test conditions do not apply to a part pensioner couple in a city or town living in a home and land of any value, even if it were valued at $3 million. For example, a couple in a home and land valued at $700,000 (exempt) with assessable assets of $400,000 will receive a part pension of $32,973 under Minister Morrison’s plan.

It is grossly unfair that under the proposed Assets Test a part pensioner couple on a family farm will receive $1,773 a year compared to $32,973 for a couple in a family home in a city or town, with similar assets.

For the purposes of these considerations, I wish to make clear my comments only relate to the Assets Test. The Age Pension Income Test applies to farmers seeking a part-pension irrespective of the value of the farm land on which they produce the income; as it should. It is the Assets Test that is unfair.

I respectfully urge you to seek an exemption from the changes to the Age Pension Assets Test for part-pensioner farmers who are subject to inclusion of the farm land contiguous with their home in the Assets Test. Please reply and advise what action you are taking.

Yours sincerely

Senior Farmer

The Prime Minister referred the letter to the Minister for Social Services, Scott Morrison, and the Department of Social Services responded on the Ministers behalf. Please read the letter from the Department of Social Services of 1 June 2015. The Social Security Act 1991 was subsequently amended on 22June to make the changes to the Age Pension Assets Test law. Liberals, Nationals and Greens voted for the changes. The changes were opposed by the Australian Labor Party and some independents.

On 20 July 2015 Senior Farmers wrote a letter to the Prime Minister addressing the underlying discrimination against senior farmers. With a change of Prime Minister the letter has been sent to the new Minister for Social Services, Christian Porter MP, and is copied below.

Senior Farmer, Manjimup, Western Australia, 22 October 2015

Minister for Social Services, Parliament House, Canberra

Your ref: C15/45351 and Department of Social Services MC15-006245

Dear Minister

Age Pension Assets Test Unfair to Senior Farmers: Repeal Unfair Law

On 11 May 2015 I wrote to you as the Member for Pearce to bring to your attention the unfair impact the change to the Age Pension Assets Test has on part pensioner farmers, without response from you. An identical letter was sent to the then Prime Minister and my letter was referred to the Department of Social Services who replied on 1 June 2015 (attached MC15-006245).

ABS Census data shows in 2011 almost a quarter (23%) of farmers were aged 65 years or over, compared with just 3% of people in other occupations. ABS data also shows that 40% of farms have annual production of only $50,000 or less. Many senior farmers struggle on low income and the Age Pension is important to them. In my letter to you of 11 May 2015, I provided an example where under the changes a typical farming couple will have their current part pension reduced from $15,365 to $1,773, a reduction of $13,592. A part pensioner couple on a family farm will receive a miserable $1,773 a year compared to $32,973 for a couple in a family home in a city or town, with similar assets.

Here, I challenge the unfair law in the Social Security Act 1991 and policy applying to senior farmers arising from the reply letter from the Department of Social Services, and respectfully request the law be repealed. This is a necessarily long letter to address the complexity covering a basic underlying discriminatory injustice to senior farmers.

1. Unfair law because farm home is inseparable from farm land Asset

The change in the Age Pension Assets Test threshold from $1,150,000 to $823,000, excluding the ‘family home’ will reduce the pension eligibility of farmers where only their home and two hectares of their land is excluded from the Assets Test. Your Government’s change to the threshold brings into focus the fundamental unfairness in treatment of farm land for the Age Pension Assets Test.

It is not possible to separate the balance of the farm land on the same title from the home two hectares and convert that into cash which could sustain senior farmers until they might need to draw on the Age Pension. Local Government planning schemes don’t allow separation of the home two hectares from, for example, seventy hectares of farm land.

The value of the farm land Asset beyond two hectares is assessed at ‘net market value’ which can be independently assessed by a property valuer contracted by Centrelink. The farm land is not assessed based upon ‘unimproved value’ used for Local Government rating and provided in rate notices.

The treatment of senior farmers for the Age Pension Assets Test is discriminatory compared to treatment of home and land assets in cities and towns. There are 427 suburbs in Australia where the median house price is more than $1 million (CoreLogic RP Data); that is, more than a million homes valued at more than $1 million in the cities. The part and full pensioners in these million dollar plus homes can access a pension because the total value of their house and land is exempted from the Assets Test. Senior farmers should not be discriminated against because they have a home on farm land that can’t be separated to become a cash asset. If a senior farmer conducts business on the surrounding farm land that income is relevant to the Income Test for the Age Pension.

2. Unfair law because of requirement for 20 years continuous residency on farm

The letter to me from the Department of Social Services refers to the ‘extended land use test’ whereby the balance of farm land on the same title as the home may be excluded from the Assets Test if the owner has resided continuously in that home for 20 years and demonstrates use of productive farm land to generate income. Government Guidance for this 20 years provision in the Social Security Act 1991 states the “Rationale for the extended land use test” is “The Australian Government does not believe that older Australians on farms and rural residential areas should be forced to move from their principal home, where they have lived for a long period of time, to gain an adequate retirement income.”. Thus the Government’s rationale acknowledges the discriminatory Assets Test can force senior farmers from their home and farm. This unfair law also deters senior farmers from moving to another farm, and deters seniors from moving from congested cities to a farm.

The Government’s 20 years residency provision inadequately covers a law which is fundamentally discriminatory to farmers. There is no requirement for the pensioners in the over a million homes worth more than $1 million to reside continuously in the same home for 20 years before their home and land is exempted from the Assets Test. There is no explanatory policy as to why senior farmers must continuously reside on their farm for 20 years before they have any reasonable prospect of accessing an Age Pension.

Again, if this 20 years provision relates to the farm also being a business, the Income Test for the Age Pension addresses business related income. In this context the Government Guidance for the ‘extended land use test’ states “To avoid all doubt, the assets test exemption of land under the extended land use test does not include the value of commercial or business assets, structures and improvements, such as plant, stock, machinery, equipment, machinery sheds etc.”. Thus the farm business assets are still assessable. The discriminatory injustice is that the home and surrounding farm land is not excluded without a requirement for 20 years continuous occupancy.

3. Unfair law because of requirement for 20 years residency plus income generation

The ‘extended land use test’ applies both continuous residency for 20 years and a requirement to demonstrate use of productive farm land to generate income. Both of these test criteria are perverse and discriminatory against senior farmers contrasted with seniors in cities and towns. Farmers take pride in the productive capacity of their farms. A quarter of farmers over the age of 65 are still farming. However, a senior farmer should not be compelled by the Social Security Act 1991 and Centrelink to farm their land and thus be forced to bolster the Income Test, if they chose not to farm.

The part and full pensioners in homes in cities are not compelled to work. The pensioners in the million homes valued at more than $1 million can play golf and bowls, do crosswords, watch TV, go to Alaska and caravan around Australia. The Social Security Act 1991 and Centrelink are not compelling those seniors to work after 65 to achieve any eligibility for a pension.

The letter to me from the Department of Social Services on your behalf refers to ‘hardship provisions’ and ‘Pension Loans Scheme’ to assist senior farmers disadvantaged by unfair law that your Government has now made worse by changes to the Assets Test threshold. These provisions would not be required if senior farmers were treated fairly and equitably under the Asset Test.

Recently when launching the ‘Agricultural Competitiveness White Paper’ the Prime Minister said it was a plan for ‘Dad and Mum’ farmers. ABS Census Data shows that over the period 1981 to 2011 the proportion of farmers aged 55 years and over increased from 26% to 47%, while the proportion of farmers aged less than 35 years fell from 28% to just 13%. Dad and Mum senior farmers have been treated with contempt with the changes to the Assets Test made by your Government. The effect will be to drive senior farmers off their farms and deter others from farming.

Minister do you want to drive working senior farmers on part pensions to cities and towns where they could then receive a full pension? That will be the effect of this discriminatory policy, now made worse by the amendments to the Social Security Act 1991 of 22 June 2015. It will increase the cost of funding the age pension.

I respectfully request that where a home is on the same title as the farm land, both should be exempted from the Assets Test for the Age Pension, and the Social Security Act 1991 be amended accordingly.

If this unfair and discriminatory law is not repealed by the next Federal Election, it would be justifiable that senior farmers put their sitting Member of your Government last on the ballot paper.

Yours sincerely

Senior Farmer

ACTION: If your Member of Federal Parliament is a Liberal or National, phone their office and tell them that if the discrimination against senior farmers in the Age Pension Assets Test is not removed by the next Federal Election, you will 'vote them last' on the ballot paper.

Download Desktop image showing the 82 mean Members of Parliament and 'Vote Them Last' on 2 July 2016. (Install on computer as Desktop or Screensaver image and use option 'To Fit' the screen)

For further information, read the debate and check the vote in the House of Representatives (pages 6966 to 6975) and the Senate (pages 4103 to 4138) on 22 June 2015.

If you wish to contact Senior Farmers please email contact@seniorfarmers.com .