Kay Hull (Riverina, National Party) Share this | Hansard source

Today is one of those days when as a member you have the opportunity to be part of the changing of the circumstances in people’s lives and you certainly welcome it. Today I welcome the opportunity to rise to speak on the Families, Community Services and Indigenous Affairs and Veterans’ Affairs Legislation Amendment (2006 Budget Measures) Bill 2006. In particular, I want to mention the life-changing piece of legislation that is coming into the House today on behalf of the Minister for Families, Community Services and Indigenous Affairs, Mal Brough.

This legislation provides for the inclusion of the land adjacent to a dwelling house in a principal home. This will see effect given to something that has been of long concern to many members in this House. I pay tribute to some of my colleagues—particularly Kay Elson—who, along with me, have continually raised the issue of curtilage and the difficulty that it has imposed on people in her electorate. It is the backbenchers in this House that are certainly at times instrumental in bringing about change. Kay Elson has been a champion for this cause and I want to recognise that today. I also want to thank Minister Brough for having heard us on this issue and for trying to resolve it.

The inclusion of land adjacent to a dwelling house in a principal home is nowhere more relevant than in my electorate of Riverina. This measure, which will be introduced in January next year, is intended to assist our aged pensioners, carer payment recipients of age pension age and qualifying service pensioners living on farms and rural residential blocks of more than two hectares who have been excluded or received a reduced pension because of the assessable asset value of the land adjacent to their home. Subject to our criteria, this measure will increase the maximum amount of land that is exempt from the assets test from two hectares to encompass all of the land on one title that the person’s principal home sits on.

The current situation where we have a two-hectare exclusion zone for the principal residence has resulted in a particular circumstance for an elderly couple that I would like to raise in the House today to illustrate the very good reason why this legislation will be life changing for so many people. I have a constituent, an elderly man of 83 years, who was born in the house he resides in now. He has been married to his wife for some 60 years. My constituent has leukaemia and is a very ill man. He and his wife have no assets and no income. Recently we had a set of valuations from the Valuer-General. Their house sits on about 367 acres, all under the one title. It is close to a local tip facility and it has electricity easements all the way through it. The farm has been able to provide a menial income for all of these years. Now, sadly, due to the age of my constituents, they are unable to farm that piece of land. They met all the criteria for a pension then all of a sudden the Valuer-General came in and valued that piece of land. Their assets were too high because of the two-hectare exclusion zone rule and their pension was reduced so substantially that they are unable to afford to live.

I found that a very difficult situation. And this is not an isolated case; it does happen, particularly in the current climate conditions in my electorate of Riverina with the significant drought that encompasses all my electorate, including the irrigation areas. I found the sight of two very elderly people sitting clutching each other and sobbing in my office a very difficult thing to deal with. It was so gratifying to know that if we can get many of these people through to the introduction of this in January next year then, finally, after all these years, we will be able to resolve this issue.

For people who have an attachment to the land in excess of 20 years, who are no longer able to farm that piece of land to raise an income from it and who are able to satisfy all the pension eligibility tests, if their house sits on the same title, the area of land that the house sits on will be excluded from the assets. This has not come soon enough for me.

I am particularly happy and relieved that the minister is introducing this piece of legislation to remedy a situation that has severely impacted on these people. The value of this piece of land, as valued by the Valuer-General, increased to above $470,000. That certainly meant a significant downsizing of the pension for this elderly couple.

This investment of more than $173 million will improve the treatment of rural land under the social security and veterans’ affairs pension assets test. It will mean a fairer assets test for people who have had their home and adjacent land held on the same title document, provided they have a long-term attachment of 20 years or more to their home. The government does not believe that older Australians should be forced to move from a home in which they have lived for many years to ensure an adequate income in retirement. I express my heartfelt thanks to the minister for this piece of legislation because it has been an anomaly of great concern to me for a long time.

These couples are no longer able to work their farm due to their age, so it is important to make sure that in the guidelines we put in place for land that is used for domestic purposes and has the same title as the family home all things are taken into consideration. The person or persons must show that it is not reasonable for them to take alternative action that will enable them to use the land to support themselves.

It is quite unfair that such a couple would be penalised under current provisions. In this current drought crisis that engulfs and swamps my entire electorate it would be unfair to see them being disadvantaged because they are unable to utilise their farming property because they cannot get a share farmer or afford to employ someone to work for them. Who would want to share farm under the current conditions we are experiencing in the Riverina? Yet this couple and many other couples are being impacted upon enormously. It is a very clear example of why the members and the backbenchers in this government have fought so hard to have this issue addressed. Again, I cannot help but thank those backbenchers who have stood up and been counted on this issue.

To access the fairer assets test the people who are living in these conditions must show that the land with commercial potential is being used productively to generate an income. The government recognises that some pensioners will have the potential to make an income for themselves while others will have lease arrangements in place or have the younger generation working on their properties. Other properties, such as many rural residential properties, will have very little capacity to generate an income. This is why this bill is so welcome—because it recognises all of these facts.

The measure will enable some rural aged pensioners, carer payment recipients of age pension age and qualifying service pensioners to have all of the land adjacent to the family home that is held on the same title document excluded from the assets test. This will increase pension payments or allow pensions to be paid to these rural people for the first time, and that will improve their living standards while allowing them to stay in their long-term family home. Most meaningfully, it will help retired farmers who are no longer able to work their properties to stay on the land while encouraging the land to be worked to its potential by those who are capable.

The government has taken seriously community concerns over whether older Australians in rural and city areas were treated equally. When city dwellers recently experienced substantial increases in the value of their home properties, they still were not being asset tested, whereas if you were on a rural property and it had been your home for a long period of time you were asset tested for all but a two-hectare zone.

The whole area of land adjacent to the dwelling house on one title document, regardless of its size or dollar value, can be excluded from the assets test provided the other criteria have been met. So anyone who meets the criteria to be eligible for an age pension will have the benefit of this piece of legislation being enacted in January. To be eligible, our pensioners must qualify for the age pension, carer payment or service pension and the pension or supplement must be payable to them. A pensioner receiving DSP may also choose to move over and receive an age pension instead of a disability support pension to take advantage of this concession, which is another very welcome piece of the legislation.

A number of factors, including the commercial potential of the land and personal circumstances such as health and the family situation, will be taken into consideration when determining whether a pensioner is making effective use of the land. Pensioners will be encouraged to make effective use of productive land to generate an income, and the capacity to use the land or arrange for someone else to use the land to generate an income will be taken into consideration when determining whether the pensioner is making effective use of the land. Any income passed to the pensioner from the commercial use of the land will be assessed—as it should be—under the normal income test in the usual way. But, if they are not receiving any income, are enabling productive land to be used but are not receiving benefits from that productive land, and they meet the pensions test, they will certainly be able to continue to live in their family home.

A local solicitor, Mr Bill Thompson, recently brought to me some concerns he had with the assets test. He wrote to all the members of the House of Representatives, including the minister. His issues were that everyday farmers, including small horticulturalists—especially those around the Griffith and Leeton areas—would not qualify because their land was not primarily used for domestic purposes. He was also concerned that these new guidelines allow farmers who have just a living area and who have family members operating the farm an opportunity to qualify for the pension. He mentioned a very significant issue facing rural Australia, with the significant number of smaller viable farms having to be sold in the past 20 years so that parents could retire, which has resulted in a number of young farmers having to change careers and leave our smaller communities.

If a pensioner has retired and a close family member is working the land to its potential, it is considered to be an effective use of the land. Any income going to a close family member will not be assessed as being received by the pensioner—which will be, I am sure, welcomed by those people who were concerned about this. The close family member is defined as the partner of the relevant person. It could also include a child or a family member of the person. The decision maker may also determine that a person be treated as if they were a close family member. This may cover situations involving stepchildren or foster children.

Times are really tough in rural Australia—never more so than in the Riverina with our ongoing drought conditions—and the number of young farmers choosing to take up other career options rather than staying on the land is unfortunately increasing. These measures for pension asset testing will alleviate some of the pressures in making these decisions.

As I said, it is one of those times when, as a member and as a backbencher, you get an opportunity to stand up and applaud improvements to legislation that has been in place for so very long. This new legislation has the precise intention of ensuring that those people with a long-term attachment—20 years or more—to a family farm or a family home on the same title as the farm will no longer be precluded from receiving the age care pension if their land is valued above asset. That has been a longstanding anomaly that, thankfully, has been picked up and accepted by this government.

The legislation will come into play from January 2007—in my view it cannot come soon enough—and I again thank the minister, Mal Brough, and his staff, in particular his chief of staff, David Moore, for taking time on this. I seem always to be paying tribute to David Moore because he has been of great assistance to the Riverina on so many occasions—whether it has been through taxation on irrigation, managed investment schemes and mass marketed schemes or other matters. It is always a pleasure to deal with his office, because they take the time to talk to backbenchers. They take the time to test. They take the time to focus-test their legislation, ensuring that all bases have been covered and that the intentions of the backbenchers working in these areas on a day-to-day basis as members for rural electorates have been recognised and delivered.

In my view, it will not please everybody—there are always those who want to find a certain loophole or a clause somewhere that has not been addressed. But the 20-year attachment will ensure that farmers and elderly people in my electorate are able to stay in their farm houses. As I mentioned, in one case an 83-year-old man, who is riddled with cancer and whose lovely wife is trying to care for him, is having to consider selling the home in which he was born and then having to worry about their pension being removed from them because the Valuer-General came in and valued their property. That will no longer happen after January next year when the criteria are met. Again, thank you to the minister and his office for the courtesy and the assistance they provided to ensure that we as federal members and representatives of these communities have been heard and certainly have been part of the delivery of this very good initiative.

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