The Disaster Recovery Funding Arrangements (DRFA) is a way through which the Australian Government provides funding to states and territories to share the financial burden of responding to a disaster.

This cost sharing arrangement between the Commonwealth and the states and territories supports the delivery of urgent financial assistance to disaster affected communities. 

State and territory governments are best placed to identify the type and level of assistance to make available to their communities following a disaster. This is part of their responsibility for disaster and emergency management. 

Disaster recovery funding assistance is delivered through state and territory agencies, which are:

• ACT 
• NSW 
• NT 
• QLD 
• SA 
• TAS 
• VIC 
• WA 

DRFA cost-sharing arrangement

Under the DRFA, four categories of assistance measures can be activated by a state or territory seeking support from the Government. Once the DRFA is activated, the Government may reimburse states and territories up to 75 per cent of the financial assistance provided. 

The DRFA allows state and territory governments to activate certain relief and recovery assistance immediately following a disaster without seeking approval from the Government. 

Under these arrangements, the states and territories determine the type and level of assistance to make available. Importantly, jurisdictions are not bound by the assistance available under the DRFA. They can make available whatever assistance is considered necessary, regardless of whether it’s eligible for cost sharing under the DRFA.

This contribution may be delivered through a number of eligible assistance measures including:

• personal hardship and distress assistance
• the engagement of a Community Recovery Officer to work with individuals and families experiencing personal hardship and distress
• counter-disaster operations
• concessional loans or interest subsidies for small businesses and primary producers
• transport freight subsidies for primary producers
• loans and grants to voluntary non-profit organisations and individuals in need
• the reconstruction of essential public assets
• community recovery funds
• cleanup and recovery grants.

Basic principles for DRFA assistance

The DRFA operates in line with the following principles: 

• Assistance is intended as an emergency helping hand for those in need. It doesn’t provide compensation for losses or restore lifestyles to their pre-disaster standard.
• Assistance is not intended to replace the need for appropriate self-help strategies, such as having insurance or doing necessary disaster mitigation.
• States/territories and local governments should draw on their own resources to provide disaster assistance before seeking support through the DRFA.
• Assistance should be used to complement and promote disaster resilience outcomes for affected individuals and communities.
• As much as possible, DRFA assistance should achieve an efficient allocation of resources. The financial exposure of taxpayers should be minimised. 

DRFA assistance measures

• Category A: assistance to individuals to alleviate personal hardship or distress arising as a direct result of a disaster. Category A assistance is provided to impacted communities and individuals automatically by a state/territory, without requiring prior approval from the Australian Government.
• Category B: assistance to a state/territory, and/or local government for the restoration of essential public assets and certain counter-disaster operations. Category B assistance also covers assistance to small businesses, primary producers, not-for-profit organisations and needy individuals through concessional loans, subsidies or grants. Category B assistance is provided automatically by the states and territories without requiring approval from the Government.
• Category C: assistance for severely affected communities, regions or sectors includes cleanup and recovery grants for small businesses and primary producers and/or the establishment of a Community Recovery Fund. Category C assistance is only made available when the impact of a disaster is severe. It’s intended to be in addition to assistance under Categories A and B. It’s usually considered once the impacts of the disaster on affected communities have been assessed. Category C assistance must be requested by a state/territory and requires agreement from the Prime Minister. 
• Category D: exceptional circumstances assistance beyond Categories A, B and C. Category D assistance is generally considered once the impact of the disaster has been assessed and specific recovery gaps identified. It must be requested by a state/territory and requires agreement from the Prime Minister. It’s generally cost-shared equally by the Government and the state/territory government.

Funding can be provided as a financial reimbursement or an advance payment. Advance payments are generally only made in response to significant and extremely damaging disasters, and where the cost is likely to be greater than the state/territory can manage in the immediate to short-term.

The level of financial assistance provided depends on the:

• type of assistance provided, and
• level of expenditure incurred by a state or territory within a financial year. 

The DRFA operates as a financial safety-net when frequent and/or severe disasters occur. As the cost of providing assistance to disaster affected communities increases, so too does the level of financial support from the Government to the states and territories.

In order to calculate the level of financial support, expenditure thresholds are used. These take into account the capacity of individual states/territories to fund relief and recovery assistance.

Improving disaster recovery in Australia

Disasters are becoming more frequent and intense. This has led to an increase in recovery assistance in recent years. 

The DRFA Review is addressing recommendations by the Royal Commission into National Natural Disaster Arrangements. It aims to ensure all Australians impacted by disasters are treated more consistently and fairly. And also that the DRFA can respond quickly and appropriately and communities are built back better. This will makes sure the DRFA is fit for purpose, appropriately targeted and accessible.

The Review also considers how to build resilience during the recovery phase after a disaster. This includes how to empower communities and encourage investment in risk reduction and infrastructure improvement.

Support categories

Category C and D  activation process

The Commonwealth has made some changes to the process for Category C and D support. These will ensure evidence-based funding decisions, better outcomes, responsible fiscal management and more effective delivery. 

The process is supported by standardised recovery packages. These packages encourage timely, consistent and evidence-based requests. National advisories are also available to provide guidance to states and territories to plan and deliver DRFA assistance to disaster-affected communities. 

Standardised recovery packages

Standardised recovery packages may be requested by a state or territory if there is a demonstrated need for them. They are relevant to the three recovery domains:

• social
• built
• economic.

Each of the packages (listed below) is subject to approval by the Prime Minister.

Note: States and territories should contact the Recovery Programs Branch in NEMA at recovery@nema.gov.au to obtain the latest program guidelines regarding each of the standardised recovery packages outlined below.  

Infrastructure betterment package (improving public assets after disasters)

After a disaster, the DRFA includes 'infrastructure betterment'. This is where damaged public assets are restored or replaced to build their future resilience. This saves recovery costs in the long run. 

It also assists in other ways, including helping:

• communities stay connected
• important services keep going
• reduce damage in future disasters.

Here are some examples:

• building a bridge higher to avoid floods
• adding more drains to roads
• changing dirt roads to sealed roads.

Climate and risk information are also used to make the best choices.

Primary producer recovery grants package

Grants are available to primary producers.

These grants help:

• lower disruption in affected areas
• primary producers recover by contributing to recovery costs.

Recovery costs might include:

• fixing buildings
• getting rid of damaged materials
• replacing damaged machinery, crops, plants and fields
• helping injured livestock.

Small business and not-for-profit organisation recovery grants

Small businesses and not-for-profit organisations can access recovery grants.

These grants help them to continue, or start again, as soon as possible after severe disasters. 

The grants cover clean-up and reinstatement activities including:

• safety inspections
• building repairs
• cleaning equipment
• purchasing, hiring or leasing equipment or material for cleaning up
• employing workers to clean the premises or equipment
• materials needed to resume trade
• disposing of debris and spoiled stock.

Legal recovery assistance package 

Legal problems can arise immediately after disasters. These legal problems include matters such as:

• housing and tenancy
• insurance claims
• superannuation
• credit and debt
• consumer rights
• property damage
• bankruptcy and estate planning
• financial hardship and access to emergency funds
• fencing disputes
• social security entitlements
• employment
• access to bank accounts and proof of identity
• domestic and family violence
• family law.

The legal recovery assistance package provides timely, effective legal assistance following a disaster. This helps reduce the impact of legal problems and the associated likelihood of more psychological, or financial, trauma. 

Mental health and well-being recovery package 

Natural disasters can impact mental health. Preventative mental health interventions can improve resilience and psychosocial wellbeing. They can provide individuals, families and communities with resources that improve the short, medium and longer-term capacity of individuals and communities to recover.

Wellbeing for the purpose of this package is understood to encompass social and emotional wellbeing with different nuances and implications for each unique cohort, some of which are identified above.

National advisories

In addition to the standardised recovery packages above, a series of national advisories have been developed; these cover:

• resilient infrastructure – guidance on how Category B and Category D (via infrastructure betterment) can be used to help generate greater investment in disaster resilient infrastructure
• clean-up and debris removal – guidance on eligibility and evidentiary requirements for expenditure relating to debris removal and clean-up activities after an event
• emergency and temporary accommodation – guidance on providing assistance for displaced individuals and families in the form of appropriate emergency and temporary accommodation options. 

Where appropriate, the advisories include advice on DRFA eligible activities and evidentiary requirements for audit, assurance and claiming purposes. 

Evaluation guidance for DRFA programs

As part of the DRFA Review a guidance document has been created. It aims to assist state and territory program managers to plan, monitor and execute evaluation activities. It can be applied broadly to activities within and outside of the DRFA.

Access the Evaluation guidance for Category C programs (PDF 537KB).