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[2002] AATA 724
General information, not legal advice.
Administrative Appeals Tribunal of Australia
2002-08-23
Original judgment source is linked above.
DECISION AND REASONS FOR DECISION [2002] AATA 724
Re SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES
Decision Pursuant to s43 of the Administrative Appeals Tribunal Act 1975, the decision of the Social Security Appeals Tribunal of 22 January 2002 is affirmed.
...........(sgd R D Fayle)..........................
FARM HELP INCOME SUPPORT - FARM HOUSEHOLD SUPPORT ACT 1992 - whether person "a farmer", whether qualified for farm help income support, whether person carrying on a farm enterprise, whether person effectively in control of farm enterprise.
Farm Household Support Act 1992 -ss.3(1), 3(2) definitions "farm enterprise" "farm help scheme payments", "farmer", 8B, 8C
Social Security Act 1991- s8(1) definition "income"
Thiel v Federal Commissioner of Taxation 89 ACT 4015
1. On 22 January 2002, the Social Security Appeals Tribunal ("SSAT") decided to set aside a decision of the Secretary, Department of Family & Community Services ("the Secretary") that Mr Malcolm Oliver ("the respondent") was not qualified for farm help income support. The effect of the SSAT decision was to treat the respondent as a "farmer", and "effectively in control of the farm enterprise". Therefore, he was qualified for "farm help income support" pursuant to the Farm Household Support Act 1992 ("the Act").
2. Should the respondent qualify for farm help income support then it follows that he may then apply for a Farm Help Re-establishment Grant pursuant to the Farm Help Re-establishment Grant Scheme 1997 since qualification for farm help income support is a threshold test for the latter grant. The decision under review by this Tribunal is that of the SSAT concerning the respondent's qualification for farm help income support.
3. Mr Dylan Desaubin of Midland Information, Debt & Legal Advice Service Inc represented the respondent at the Tribunal. The Secretary was represented by Mr Alan Jones, an advocate with the Centrelink Advocacy and Administrative Law Team. The respondent gave evidence in person. In addition to the documents filed pursuant to s37 of the Administrative Appeals Tribunal Act 1975 ("the T documents"), the following exhibits were taken into evidence:
Exhibit R1 A statement by the respondent headed "Details of contributing work to maintaining status of farmer" dated 21 April 2002;
Exhibit R2 A statement by the respondent and his spouse (a veterinarian) headed "De-stocking - A Common Farm Practice", dated 25 March 2002; and
Exhibit R3 A letter of 20 April 2002 from Mr L W Oliver (the respondent's father).
4. The respondent's father, Mr L W Oliver, holds the freehold title of a farming property. In 1978 the respondent, whilst still at high school, commenced to breed pigs for sale. This activity was initially carried on in partnership with the respondent's mother (Mrs G R Oliver) and traded as GR & MJ Oliver ("the partnership"). Approximately 30 acres of the farming property owned by his father was, by tacit agreement, used exclusively for this activity, and managed by the respondent. The respondent's father played no part in the management of the piggery although he always encouraged his son, the respondent. The respondent's father had agreed with him that in exchange for farm labour generally, including cropping and sheep husbandry, the partnership would be provided with grain for pig feed. The partnership ceased operations when, in 1980, the respondent joined the Australian Regular Army. After discharge from the Army in 1990, the partnership was re-activated and breeding of and trading in pigs recommenced, as did the arrangement concerning the provision of farm labour to his father in exchange for grain used exclusively in the piggery. The respondent was then provided with a rent free house on the property where he and later, his family resided. The respondent built all the piggery yards and fixtures to the land at his own cost. These were exclusively used by the partnership in its business of pig breeding and trading. Meanwhile the respondent had married and his spouse, a veterinarian, also established kennels on the farm property, the income of which was hers. It is understood that at no time did either the partnership or the respondent's spouse pay rent to Mr L W Oliver for the respective uses of the land or the house. Further, the evidence is that there was a tacit understanding that should Mr L W Oliver be in a position to afford it, he would pay the respondent $100 per week, (T42). There is no evidence, at least from 1998, that any money was paid to the respondent in this respect.
5. The T documents include a number of financial statements prepared by the partnership's accountant. These show that by 30 June 1999 the partnership was actively engaged in pig trading and also derived income from selling barley and wheat (T5). The balance sheet for the following financial year ended 30 June 2000 (for there is no partnership balance sheet in evidence for 1998-99) shows that the partnership had structural improvements subject to depreciation and similarly, plant and equipment and motor vehicles, (T10). The depreciation schedule for the partnership for 1999-2000 includes among the structural improvements two silos, a concrete water tank, fencing, a windmill and pig sheds. The plant and equipment includes a hammermill used to mix the grain feed for the pigs and sundry other farming equipment. The motor vehicles consist of two utilities, (T10). The partnership's depreciable improvements, plant, equipment and motor vehicles are what one might expect to find in a piggery business consistent with the evidence of the respondent. The respondent's evidence that he was engaged in a farming enterprise is consistent with the financial statements of the partnership for the years up to and including the year ended 30 June 2000 and the evidence of Mr LW Oliver (Ex. R3). The respondent's evidence in this respect is that he was, in essence, the active partner and his mother played a passive role in the daily management of the piggery.
6. The partnership ceased to exist on either 30 June 2000 or 1 July 2000. This resulted from a restructure of the farming business on advice of Mr LW Oliver's accountant. On that day a family discretionary trust, called the "Bathurst Trust", of which the respondent and his spouse were joint trustees, acquired the whole of the piggery business as well as the kennels. The piggery assets included 130 pigs, comprising boars, breeding sows and piglets. The respondent's evidence as to what actually happened during the year ended 30 June 2001 is supported by reference to the Bathurst Trust's balance sheet, (T17). By 30 June 2001 there was no livestock and the plant and equipment had been sold, although a motor vehicle (F100 ute) remained, (T17). The respondent's evidence was that the assets had been disposed of by the end of July 2000. The respondent told the Tribunal that his decision to sell out was primarily driven by a bad crop season and little prospect of obtaining sufficient grain feed to carry on. He subsequently received a subsidy of $3,000 pursuant to the Act for the purpose of obtaining professional advice as to the viability of the piggery. In September 2001 he retained a consultant who reported that the piggery was not commercially viable. As a result of attending a meeting convened locally by Agforce in July 2001, he learnt that in order to qualify for a Farm Help Re-establishment Grant, a government grant to assist farmers wishing to leave the farm and re-establish themselves (in an alternate income earning activity), it was necessary to sell up the farm enterprise and move out. It was the respondent's evidence, which is not questioned, that long before receiving the September 2001 report (which confirmed his own assessment of the lack of future prospects with the piggery), he and his spouse had decided to do just that and indeed had acted upon that decision by July 2000. That month the respondent sold the breeding stock to his neighbour, although he had not yet given up the hope that he may be able to salvage the pig breeding business. The respondent's evidence was that there is a tacit agreement with his neighbour that if in future he should decide to come back to pig farming then his neighbour would gladly sell back to him "his pig genetics", an expression which describes the selectively bred pigs which the respondent had established over the years and which he knew to be desirable for breeding and relatively disease resistant. In addition to the de-stocking, the respondent subsequently set about selling the moveable plant and equipment, carrying out renovations to the pens and yards using materials previously procured, cleaning and preparing the sheds and yards so that their condition would be preserved and not deteriorate through time. When questioned by Mr Jones about his decision to sell his plant and equipment, the respondent said that he did not need the hammermill and could manage with a much cheaper feed mill should he go back to raising pigs as before. It took until 20 August 2001 for the respondent to complete those tasks, during which time he continued to assist his father in the running of the farm. Some months prior to 20 August 2001, the respondent's spouse and children had moved to another rural centre where she had secured work as a veterinarian. The respondent joined them when he had completed the above-mentioned activities. He actually left the piggery permanently on 20 August 2001. The respondent told the Tribunal that in the interim the family lived off the proceeds from disposal of the farm stock and plant etc and income earned by the respondent's spouse. He said that whilst he was seeking to be qualified for farm help income support it subsequently turned out that no benefit would be payable in the event he was qualified because of the level of his spouse's income.
7. Since leaving the farm the respondent is establishing himself in a handyman business where he and his family have relocated. The respondent told that Tribunal that since he had left the farm permanently he had no expectation that his father is obligated in any way to allow him to return and re-establish the piggery or that he would, in the circumstances, inherit the property. The respondent believed that his father had honoured his side of the agreement and his departure from the farm put an end to that agreement, especially as he was no longer available to assist his father manage the farm generally. It is the respondent's understanding that his father is free now to sell the farm without recourse to him.
8. The Tribunal accepts the respondent's evidence (supported by Ex. R2) that in ordinary circumstances it is not feasible to agist pigs either onto or away from a piggery. This is in contrast with agistment of sheep and cattle, a fairly usual farming activity. The evidence is that pigs, because of their susceptibility to disease, do not lend themselves to be agisted. The unchallenged evidence is that pig breeders will not accept another breeder's stock on a temporary basis as it risks contamination of their stock. Pig breeders will not risk agisting out their stock for the same reason. Therefore, when it is no longer viable to maintain a pig herd, pigs are either sold to market or, as in the respondent's case, to another piggery or a person wishing to commence a piggery. Apparently pig breeders will not take on another's pigs without being satisfied about the pigs being disease free.
9. In the Tribunal's opinion, the personal activities of the respondent for the period since 1 July 2000 until 20 August 2001, arranging the de-stocking, the orderly disposal of the plant and equipment, and repairing etc the piggery improvements, represent management of the winding up of the business of pig breeding, then owned by the Bathurst Trust. T document T17, page 95 shows that during the year ended 30 June 2001 the Bathurst Trust paid wages of $3,650 of which $2,650 was paid to the respondent (T15, p.86). Therefore, to that extent, the evidence is that the respondent was in an employee relationship with the employer, being the joint trustees, one of whom was himself. Further, it is uncontested that the value of the rent free house provided to the respondent and his family by his father was $250 per week (T42). This, in the Tribunal's opinion, was part of the respondent's remuneration (by way of a fringe benefit), for having assisted his father in the management of the farm. There is no evidence that his father paid the respondent any wages and because of the lack of a sufficient crop in 1999-2000, the respondent was not subsequently paid in kind by way of a share of the crop for pig feed. Indeed, it was the respondent's evidence that that was a fundamental reason for having to cease pig farming when he did.
11. The relevant provisions of the Act are set out below:
(a) the provision of income support and advice to farmers who may not have a long-term productive, sustainable and profitable future in the sector; and
(b) the provision of financial incentives to farmers to leave farming; and
(c) the provision of relief payments to farmers who are in exceptional circumstances.
6 Objects of this Act
(a) to provide financial assistance and/or advice to farmers who are unable to meet day-to-day living expenses and cannot obtain commercial loans; and
(b) to provide a financial incentive for such persons to leave farming; and
(c) to provide financial assistance to farmers who:
(i) are experiencing difficulty in meeting living expenses; and
means an enterprise carried on within any of the agricultural, horticultural, pastoral, apicultural or aquacultural industries.
(c) payments of assistance under the farm help advice scheme.
(a) has a right or interest in the land used for the purposes of a farm enterprise; and
(b) contributes a significant part of his or her labour and capital to the farm enterprise; and
(c) derives a significant part of his or her income from the farm enterprise.
DIVISION 1B- Qualification for farm help income support
Subject to this Division, a person is qualified for farm help income support in respect of a period if:
(a) the period begins on or after the farm help scheme payment commencement day; and
(c) the person has been a farmer for a continuous period of at least 2 years immediately before the period; and
(d) a certificate of inability to obtain finance issued in respect of the person has effect throughout the period.
8C Persons not qualified if Secretary determines that they do not effectively control farm enterprises
A person is not qualified, or ceases to be qualified, for farm help income support in respect of a period if the Secretary determines that:
(a) the person is not effectively in control of the farm enterprise for which the person claims farm help income support; and
(b) farm help income support should not be payable to the person in respect of the period.
It is noted that "income" is not defined in the Act, nor is it defined in subsection 3(1) of the Act by reference to specific definitions contained in the Social Security Act 1991. For that reason the word is given its ordinary meaning, which, in the Tribunal's opinion, in contemporary terms, in relation to employment or provision of personal services, would embrace a person's total remuneration package including fringe benefits. That at least, is the meaning attributed to the word in these reasons.
12. Mr Jones, for the Secretary, submitted in essence, that the respondent was not a "farmer" as at 10 August 2001. Those submissions and the concerns of the Tribunal were put to the respondent's representative and are summarised as follows:
* The land on which the piggery was conducted did not belong to the respondent nor did he have any right or interest in it - there being no lease.
* The piggery improvements to that land, despite having been paid for by the respondent belonged to Mr L W Oliver who owned the land.
* There was no share-farming arrangement between Mr L W Oliver and the respondent.
* The change in ownership that occurred on 30 June 2000 when the piggery assets were transferred from the partnership to the trustees of the Bathurst Trust meant that from then the respondent's beneficial ownership of that property was subject to the trust deed. As the Bathurst Trust was a discretionary trust then it cannot be said that the respondent in his own right had any beneficial interest in that property but at best a mere expectation.
* The respondent had disposed of the livestock and moveable equipment used in the business of the piggery (with the exception of the motor vehicles) well before 10 August 2001.
* The activities engaged in by the respondent since disposal of the pigs and plant etc up until he left the property permanently on 20 August 2001 were not related to the carrying on of the piggery (the farm enterprise).
* The respondent did not derive a significant part of his income from the farm enterprise, at least from the period since 30 June 2000 to his departure on 20 August 2001. Fundamental to this submission is that there was no "farm enterprise" the livestock and piggery plant and equipment having been disposed of by then.
13. Mr Desaubin, for the respondent made the following submissions:
* That the respondent had undergone professional training in piggery management and is registered as a Quality Assured pig breeder. This enables him to sell his pigs as a finished product. It distinguishes him from those whose main farming activity is other than pig breeding.
* That the respondent sold up his piggery business because the piggery was no longer a viable proposition owing to low pig prices and low rainfall (which resulted in a lack of grain feed), and little or no prospect of recovery. In September 2001 it was independently affirmed that the piggery was not likely to be viable (T30).
* The piggery infrastructure was not disposed of and continued beyond the de-stocking. Also, the respondent continued working on the farm attending to fences, general farm duties and putting in crops for future feed stock in the hope of recovery.
* That it was not until after he had de-stocked that the respondent became aware of an entitlement to a Re-establishment Grant and made an appointment on 3 August 2001 with Central Agcare in this regard. At no stage up to 10 August 2001 had the respondent quit farming although it was clear that at that time he was looking at other options.
* The respondent at all material times had an interest in the piggery property as part of a normal filial arrangement in such circumstances and he had unfettered effective control of the piggery until he permanently left the property on 20 August 2001, after having failed to obtain finance to continue the piggery operations.
* That the arrangement with Mr L W Oliver, regarding sharing the grain yield, was akin to a share-farming arrangement.
* The nature of the work which the respondent did on his father's property, comprising general farm duties, sheep crutching, drenching, seeding, hay cutting etc was inextricably linked to the running of the piggery since the latter depended on the former. For without grain there would be no feedstock for the pigs. The yield from those activities was simply thwarted by the bad seasons, which in turn forced the respondent to de-stock in July 2000. Because of the nature of farming, being dependent on the many things, including rainfall, it was always risky whether the respondent's labour would provide a viable return (in the form of grain). As it transpired, in 1999-2000 it did not, forcing the respondent's decision to de-stock and eventually seek alternate work to provide for his family.
* Finally, it was submitted that the respondent's circumstances and conduct fit squarely the objects of the Act (section 6). That is, due to circumstances beyond his control the respondent farmer was unable to meet the day-to-day living expenses nor was he able to obtain a commercial loan to allow him to continue farming. Reference was made to the Second Reading Speech when the Act's Bill was introduced into Parliament -
"The measures contained in this Bill offer carefully targeted assistance to those who wish to adjust out of farming ... [this Bill] is the government's key program for delivering income support to the farm sector. It also provides Adjustment Assistance to farmers who wish to leave the industry ... The legislation provides farmers with the opportunity to give serious consideration to the future of the farm and family without having to rush decisions ... It allows them to keep working the farm while they review the situation. It relieves the tremendous pressure that can arise from literally not being able to put food on the table."; c/f Bolton & SDFCS [2000] AATA 749, 61 ALD 799.
14. Whether the respondent is qualified for farm help income support will depend on whether he was "a farmer" for a continuous period of 2 years prior to his application on 10 August 2000 for farm help income support, pursuant to the Act. There is no dispute that at least for a period of two years prior to 30 June 2000 the respondent was engaged in pig breeding in his own right in his role as a partner of the partnership. Further, there does not appear to be any disagreement on the facts that at least until then the piggery was the main source of the respondent's income. However, there is a need to consider whether once the piggery livestock, plant and equipment of the partnership was transferred to the trustees of the Bathurst Trust on 30 June 2000 the respondent continued to meet the activity test of a "farmer" as defined in s3(2) of the Act.
Did the respondent have a right or interest in the land used for the piggery business?
16. The Secretary submitted that since the respondent had no clear legal right to occupy the land in question, nor any identifiable legal interest in the land in question, (there being no lease) then he did not have a "right or interest in the land used for the purpose of a farm enterprise" as required by paragraph (a) of the definition of "farmer" in s3(2) of the Act.
17. The evidence of the respondent and his father who has legal title to the land in question, is that the respondent occupied that portion of the farm, about 30 acres, pursuant to a tacit agreement that so long as the respondent wanted to conduct the piggery business he was given an unfettered right to occupy that portion of the land without interference for that purpose. Further, the evidence is that the respondent's father considered that any improvements made to that portion of the land belonged exclusively to the respondent who was free to remove them if he was so inclined. The respondent's father supports his evidence in this regard, (Ex. R3). The Tribunal accepts the respondent's evidence that there existed an understanding between his father and himself that should he at any time wish to return to the farm and recommence the piggery business he would be so permitted (subject of course to his father retaining title). In the opinion of the Tribunal, whilst there is no legal title or formal lease or licence grant to the area of land occupied by the piggery, the arrangement between the respondent and his father was real and effective as is evidenced by the fact that the piggery arrangement subsisted for at least 10 years during which time the respondent established the piggery structural improvements at his own cost. The arrangement between the respondent and his father, to provide labour and expertise, which contributed significantly to his father's farm enterprise, was, in the opinion of the Tribunal, valuable consideration for the right to occupy the piggery (and to receive a share of the crop yield for the piggery). The respondent's evidence was that since leaving the farm on 20 August 2001 the former arrangement with his father ceased and his father was no longer bound by the arrangement or obliged to retain the farm. That obtains because the former arrangement was no longer capable of performance on the part of the respondent, him no longer being available to carry out the farm duties and management formerly undertaken in exchange for a share of the grain crop (and the rent free house).
18. In the opinion of the Tribunal there was a tacit agreement between the respondent and his father that in consideration of certain responsibilities and duties in relation to the management of his father's farm, the respondent would be given a share of the crop for grain feed exclusively for the pigs and be provided with rent free accommodation for he and his family. The existence of that arrangement and the fact that it was specifically performed is sufficient, in the Tribunal's opinion, to conclude that the respondent enjoyed a right or interest in land used (by him) for the purposes of a farm enterprise (the piggery), albeit a non-transferable or disposable right.
Did the change in structure (and ownership) of the piggery business on 30 June 2000 affect the respondent qualifying as a "farmer"?
(a) Has a right or interest in the land used for the purpose of a farm enterprise;
(i) Was the arrangement between the respondent and his father affected by the disposal of the partnership's assets to the trustees of the Bathurst Trust; and
(ii) Was a "farm enterprise" using the land on 10 August 2000?
21. The Tribunal accepts from the evidence of both the respondent and, in respect of his father, exhibit R3, that neither considered that the change from the partnership to the trustees on 30 June 2000 achieved anything more than to remove the respondent's mother from the piggery business and add the respondent's spouse and two children as having an interest in that business. As far as both the respondent and his father were concerned, the former arrangement about occupation of the exclusive portion of the land reserved for the piggery continued. The respondent's evidence in relation to the change on 30 June 2000 was that this was only for the purposes of taxation on advice of his father's accountant.
means an enterprise carried on within any of the agricultural, horticultural, pastoral, apicultural or aquacultural industries.
23. "Enterprise" is not defined in the Act. The Macquarie Dictionary, second edition, defines it as:
"enterprise, n. 1. a project undertaken or to be undertaken, esp. one that is of some importance or that requires boldness or energy. 2. engagement in such projects. 3. ..."
24. In Thiel v Federal Commissioner of Taxation 89 ACT 4015, Northrop J, acknowledging that there was no relevant statutory definition, cited the Shorter Oxford English Dictionary as giving the following meanings "1. A design of which the execution is attempted; a piece of work taken in hand; now only, a bold arduous, or dangerous undertaking. 2. Disposition to engage in undertakings of difficulty, risk, or danger; ...". His Honour observed: "the word 'design' is taken to be understood as meaning a plan, scheme or purpose" (4022). His Honour, in further discussion of the term said: "'enterprise' by itself appears to include isolated activities and activities connected with a business". His Honour's was a dissenting judgment but there does not appear to be any disagreement among the majority justices (Northrop, Sheppard and Lee JJ) in relation to what his Honour said in this regard. Sheppard J concluded in the context of the International Tax Agreement then being considered, "enterprise" should be given a wide meaning (4036). Lee J in the relevant context of the International Tax Agreement in question said that because the particular Agreement speaks of "profits" then in that sense it makes no provision for an isolated transaction (4049). In the Tribunal's opinion, his Honour is not there saying that an isolated transaction cannot be an enterprise (carried on or carried out) but rather, because of the use of the plural "profits" rather than "profit" then, for the purposes of the Agreement, it cannot. So, in the opinion of the Tribunal, the existence of a farm enterprise for the purpose of the Act is not dependent on the level of business activity.
25. Whether a person qualifies as a "farmer" in relation to that farm enterprise, is qualified by paragraphs (b) and (c) of the s3(2) definition of that term.
26. In the Tribunal's opinion the relevant enterprise, the piggery business, continued during the time that the trustees disposed of the livestock, plant and equipment, until the respondent in his capacity as joint trustee or possibly as an employee of the trustees of the Bathurst Trust, finished the completion of the renovations, repairs and cleaning of the improvements essential to the enterprise (the piggery) so that, in the event the respondent decided to re-commence the piggery operations, he could do so, subject to access to the land. In the opinion of the Tribunal, the very activities engaged in by the respondent until he left the farm house to join his family who had gone ahead of him pending his completion of the activities referred to above, amount to activities of the piggery enterprise and also farming activities in relation to the tasks performed pursuant to the agreement between the respondent and his father, which was still in force. As previously mentioned, those activities were intricately linked to the piggery business. For those reasons, the Tribunal concludes, in relation to sub-paragraph (a) of the s3(2) definition of "farmer" in the Act, that the respondent, in his own capacity prior to 30 June 2000 and also in his capacity of joint trustee from 30 June 2000 had a continuing right or interest in the land used for the purposes of a farm enterprise until 10 August 2000. That continuing right or interest was personal to the respondent until he left on 20 August 2001. That is, in fact or in substance, the role of the respondent after the change of ownership to the trustees did not alter - the respondent maintained effective control of the farm enterprise (such as it was) for which the farm help income support was sought (s8C of the Act). In the opinion of the Tribunal, the Act is clearly intended as beneficial legislation, as evidenced by its long title (supra), s6 of the Act and the Second Reading Speech quoted in part by Mr Desaubin for the respondent (supra). Therefore, in the present circumstances, in the opinion of the Tribunal, this is a case where substance should override form. The Tribunal simply observes that the change from the partnership to the trust estate on 30 June 2000 had the real effect of removing the respondent's mother from part ownership of the piggery although in substance the piggery was at all relevant times in the control of the respondent. For those reasons the Tribunal concludes, in answer to the two questions posed under this sub-heading; (i) that there was no real effect to the arrangement existing between the respondent and his father in relation to the piggery by the change in structure on 30 June 2000; and (ii) the farm enterprise continued until the respondent left the property on 20 August 2001.
Did the respondent contribute a significant part of his labour and capital to the farm enterprise?
27. The evidence is that up until leaving on 20 August 2001 and for about 10 years prior to that, the respondent divided his time between tending to the duties and management of his father's farm and the management of the piggery. Further, the evidence is that the respondent paid for all improvements to the property used exclusively for the piggery, as well as the piggery plant and equipment. There is no doubt that a significant part of the respondent's capital was tied up in the piggery. In the opinion of the Tribunal, because of the inter-dependent nature of the farm and piggery activities - the piggery being dependent on getting grain for feed and that in turn, dependent on the role of the respondent in relation to the management and duties associated with his father's farm - those activities cannot be separated. For that reason, the Tribunal finds as fact that the respondent contributed a significant part of his labour and capital directly and indirectly to the farm enterprise.
Did the respondent derive a significant part of his income from the farm enterprise?
28. The evidence is that when the respondent's father's farm produced grain, he was given a share of that yield for exclusive use in feeding his pigs. That yield varied over time but ranged up to 100 tonnes annually. The number of pigs carried by the piggery depended on the availability of grain from that source. When, as occurred in 2000, there was little grain yielded, the respondent was forced to de-stock. The further evidence is that the respondent enjoyed rent-free occupancy of the house on his father's property as part of his remuneration for assisting in the day-to-day management of the farm. The respondent's income tax returns at T6 & T11, (which are not required to report the value of Fringe Benefits), for the years ended 30 June 1999 and 2000 each show that the respondent's income was sourced from the partnership (the farm enterprise). For the year ended 30 June 2001 (T15), the respondent's income tax return shows a taxable income of $6,659. The source of the assessable income was from wages of $2,650 paid by the trustees of the Bathurst Trust as previously mentioned, social security payments of $3,986 and a capital gain on disposal of a small parcel of shares, $493. However, in the opinion of the Tribunal, that is not the totality of the respondent's earnings for that year. In addition to that, in the present context, it is relevant to include the value of the fringe benefit rent-free house for the entire year, which at $250 per week, equates to approximately $13,000. Although the respondent continued to work with his father in relation to the farm, no remuneration was derived, presumably because the respondent disposed of his pigs in July 2000. Therefore, the value of the fringe benefit in the form of free rent far exceeds the other income reported by the respondent in his income tax return for the year ended 30 June 2001. Given that the value of that fringe benefit is properly classed as income derived from the farm enterprise in question, the requisite of paragraph (c) of the s3(2) of the Act definition of "farmer" is satisfied, at least until 30 June 2001.
29. The evidence before the Tribunal is that the respondent derived no assessable income for taxation purposes during the period from 1 July 2001 until he departed the farm on 20 August 2001, which takes in the period up until 10 August 2001 when he applied for the farm help income support. Given that he enjoyed rent free accommodation of the house until his departure and that he also continued to provide his services to his father in the carrying on of his father's farm until then, it follows that his income (although not assessable for tax) was entirely sourced from that activity until his departure from the farm.
Was the respondent qualified for farm help income support at the time of his application?
31. Section 8B of the Act sets out the conditions that must be satisfied for a person to be qualified for farm help income support. In terms of paragraph (a) of that definition, for reasons already mentioned, the Tribunal is satisfied that the respondent met those requirements - that is, he was a "farmer" and had been for a period of at least 2 years immediately before making the claim on 10 August 2001. It was not disputed that he was over 18 years and a resident of Australia. The Tribunal also understands that it is not in issue that the respondent had satisfied the requirement of paragraph 8B(d) of the Act, to furnish a certificate of inability to obtain finance (T9). As already mentioned, the Tribunal is satisfied that the respondent was at all material times effectively in control of the farm enterprise (piggery) for which he claims farm help income support. Therefore, s8C of the Act cannot operate to deny the claim.
32. In the opinion of the Tribunal, the respondent was qualified for farm help income support when he made the claim on 10 August 2001 although he was not entitled to receive such support due only to his spouse's level of income.
33. For the above reasons and pursuant to s43 of the Administrative Appeals Tribunal Act 1975, the decision of the Social Security Appeals Tribunal of 22 January 2002 is affirmed.
I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RD Fayle, Senior Member
Signed: ........(sgd V Wong).............................................
Solicitor for the Applicant Advocacy & Administrative Law Team, Centrelink
Solicitor for the Respondent Midland Information, Debt & Legal Advice Service
Thiel
Federal Commissioner of Taxation