Farm Retirement Scheme

Rules

The scheme is called Early Retirement Scheme (ERS 3) 2007. It came into effect on 13 June 2007. This scheme replaced the 2000-2006 Scheme. The major change introduced in 2007 is that payments are better for farmers with a small number of hectares.

The rules governing the scheme are complex, both for the retiring farmer and younger farmer. The following are the more important rules.

The retiring farmer

In order to qualify:

• You must be aged between 55 and 66 on the date the completed application is received in the Department of Agriculture, Food and the Marine
• Lands transferred by deed of transfer/lease on or after 1 January 2005 are eligible for inclusion under the scheme
• You must transfer/lease your land to a younger eligible farmer, called the "farming transferee”
• You must retire from commercial farming activity. This involves having your herd/flock/cereal reference number cancelled, transferred or made dormant. If you subsequently take up commercial farming, you will have to repay all of the pension payments. You may keep your house and a maximum of 10% or 1 hectare of agricultural land, but you may not use the retained area for commercial farming activity. Under new changes to the scheme, the retiring farmer may now take up insurable employment in a farming-related business. Examples of such businesses are co-ops and private companies that provide services to farmers on a contract basis, such as relief milking, silage making and hedge cutting. The retiring farmer may not, however, work on the farm from which he or she has retired or work directly for another farmer.
• You must have at least 5 hectares of eligible land. Only agricultural lands owned or leased that are the subject of an SPS/Area Aid application at the date of signing of the transfer/lease documents are eligible. Land that was transferred under the earlier scheme is not eligible until a pension ceases to be payable in respect of it.
• You must have practised farming for the preceding ten years and have earned at least 25% of your income from farming in the tax year prior to the transfer/lease

Where separately owned/lease lands are managed as a joint enterprise more than one pension can be paid but the combined value of the pensions cannot exceed the maximum pension payable under the scheme.

The eligible younger farmer

There are 3 types of transferee (this is the term used to describe eligible young farmers) and on the date a completed application is received in the Department of Agriculture, Food and the Marine they must:

• Have appropriate farming experience and educational requirements
• Undertake to continue in farming
• The younger farmer must have a herd/flock/cereal number and supply a Personal Public Service Number (PPSN)

Category A transferee

This category of transferee must be approved under the Young Farmers’ Installation Scheme and fulfill the conditions of that Scheme.

Category B transferee

• Be between 18 and 45 years of age
• Be farming a minimum of 5 hectares of enlargement land and farm an enlarged holding of at least 20 hectares (non less favoured areas) or 15 hectares (less favoured areas)
• Have a non-farm income of less than €50,000 in the tax year prior to signing of the transfer/lease

Category C transferee

• Have been approved as a transferee under a previous Early Retirement Scheme
• Be between 45 and 50 years of age
• Be farming a minimum of 5 hectares of enlargement land and farm an enlarged holding of at least 20 hectares (non less favoured areas) or 15 hectares (less favoured areas)

Workers

There is also a pension scheme for workers aged between 55 and 66 who lose their employment as a result of the farmer's early retirement.

In order to qualify, the worker must:

• Be aged between 55 and 66
• Have spent at least half of his/her working time as a farm worker during the previous 5 years
• Have worked on the retiring farmer's holding for the equivalent of two full-time years during the 4 years before the farmer's retirement and have paid PRSI contributions in respect of the period of that employment
• Undertake to stop farm work forever

More information about the terms and conditions of the Early Retirement Scheme (pdf) can be found in on the Department of Agriculture, Food and the Marine website.