The Federal Government says it is cutting red tape for drought support payments.

The changes mean farmers would no longer risk accruing federal government debts from welfare overpayments.

Agriculture Minister David Littleproud has introduced legislation to parliament to base the amount of farm household support payment paid on current income rather than an estimate.

“Predicting income is difficult. Farmers have told us that loud and clear,” he said on Thursday.

Current arrangements grant farmers a rate of payment based on an estimate they make 12 months in advance.

The draft legislation would also give farmers more time to complete farm financial assessments after receiving a notice from Services Australia, by removing a current 28-day time limit.