About
The farm management deposits scheme commenced on 2 January 1999, and replaced the income equalisation deposits scheme. The scheme's legislation provisions are in Schedule 2G of the Income Tax Assessment Act 1936. Farm management deposits provide an important risk management tool to help farmers deal with uneven income, common in agriculture because of climate and market changes. They complement other risk management strategies available to primary producers such as developing fodder and water reserves, financial planning and diversifying their production systems. This scheme allows you to claim a deduction for farm management deposits made in the year you deposit. If you withdraw a farm management deposit, the amount of the deduction previously allowed is included in your assessable income in the withdrawal tax year.
Who is eligible
| Eligibility Criteria | |
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You must be a Primary Producer at the time you make a deposit |
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You are an Australian resident |
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You are applying as an individual |
| Other rules & conditions | |
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To claim a deduction your off-farm taxable income must be less than $65,000. |
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You must have all your FMD accounts with one financial institution. |
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The minimum amount invested as an FMD must be $1,000. Please note: the minimum balance for Elders Rural Banks Fixed Rate FMD is $5,000. |
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An additional deposit to an FMD must be a minimum of $1,000. |
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The minimum withdrawal on an FMD is $1,000, except where the entire balance of the deposit is repaid. The residual balance of the FMD after a withdrawal must be a minimum of $1,000. Please note: the minimum balance for Elders Rural Banks Fixed Rate FMD is $5,000. |
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The maximum amount that can be invested as an FMD is $400,000. You may have more than one FMD account with one financial institution, but the combined balance of all accounts must not exceed $400,000. |
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A financial institution cannot deduct fees from your FMD. |
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Funds must be invested for a minimum of 12 months to receive or retain any applicable taxation benefits (except in certain circumstances). |
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Interest cannot be compounded to an FMD, it must be credited to another account. |
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Upon a written request a financial institution must transfer the balance of an FMD to another financial institution electronically. If an FMD is transferred electronically it is not seen as a withdrawal and any taxation benefit is retained. Any interest earned on the FMD must be paid separately to the owner of the FMD. |
Exceptional Circumstances
The Minister for Agriculture, Fisheries and Forestry is able to declare an area as being in exceptional circumstances.
An exceptional circumstances declaration allows eligible primary producers who have an exceptional circumstances certificate access to their farm management deposits within 12 months of deposit and retain their tax benefits.
This ability to withdraw deposits early only applies to deposits made when the area was not under an exceptional circumstance declaration.
To find out if your area has been declared to be in exceptional circumstances:
- visit the Australian Government Department of Agriculture, Fisheries and Forestry website at www.daff.gov.au/droughtassist
- phone the Centrelink Drought Assistance Line on 13 23 16, or
- phone the Australian Government Regional Information Service on 1800 026 222.
If you need an Exceptional Circumstances certificate, phone the Centrelink Drought Assistance Line on 13 23 16.
More information
More information about the farm management scheme is available by:
download a copy of the Australian Taxation office (ATO) FMD guide;
phoning the ATO on 13 28 66; or
visiting the Department of Agriculture, Fisheries and Forestry website http://www.daff.gov.au/fmds
For more information about the Elders Rural Bank FMD options:
call our Customer Service Centre on 1300 660 115; or
visit your local branch, locate your local branch here.
