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1. Member States may cap the amount of the basic income support for sustainability to be granted to a farmer for a given calendar year. Member States that choose to introduce capping shall reduce by 100 % the amount exceeding EUR 100 000 .

2. Member States may reduce the amount of the basic income support for sustainability to be granted to a farmer for a given calendar year exceeding EUR 60 000 by up to 85 %. Member States may set additional tranches above EUR 60 000 , and specify the percentages of reduction for those additional tranches. They shall ensure that the reduction for each tranche is equal to or higher than for the previous tranche.

3. Before applying paragraph 1 or 2, Member States may subtract from the amount of the basic income support for sustainability to be granted to a farmer in a given calendar year:

(a) all the salaries linked to an agricultural activity declared by the farmer, including taxes and social contributions related to employment;

(b) the equivalent cost of regular and unpaid labour linked to an agricultural activity practiced by persons working on the farm concerned who do not receive a salary, or who receive less remuneration than the amount normally paid for the services rendered, but are rewarded through the economic result of the farm business;

(c) the labour cost element of the contracting costs linked to an agricultural activity declared by the farmer.

To calculate the amounts referred to in the first subparagraph, point (a), Member States shall use salary costs actually incurred by the farmer. In duly justified cases, farmers may request to use standards costs to be determined by the Member State concerned according to a method to be further specified in its CAP Strategic Plan based on the average standard salaries linked to an agricultural activity at national or regional level multiplied by the number of annual work units declared by the farmer concerned. To calculate the amounts referred to in the first subparagraph, point (b), Member States shall use standard costs to be determined by the Member State concerned according to a method to be further specified in its CAP Strategic Plan based on the average standard salaries linked to an agricultural activity at national or regional level multiplied by the number of annual work units declared by the farmer concerned.

4. In the case of a legal person, or a group of natural or legal persons, Member States may apply the reduction referred to in paragraphs 1 and 2 at the level of the members of those legal persons or groups where national law provides for the individual members to assume rights and obligations comparable to those of individual farmers who have the status of a head of holding, in particular as regards their economic, social and tax status, provided that they have contributed to strengthening the agricultural structures of the legal persons or groups concerned.

5. The estimated product of the reduction of payments shall primarily be used to contribute to the financing of the complementary redistributive income support for sustainability, if it is established in the relevant CAP Strategic Plan, and thereafter of other interventions belonging to decoupled direct payments.

Member States may also use all or part of the product to finance types of intervention under the EAFRD as specified in Chapter IV by means of a transfer. Such transfer to the EAFRD shall be part of the CAP Strategic Plan financial tables and may be reviewed in 2025 in accordance with Article 103. It shall not be subject to the maximum limits for the transfers of funds from the EAGF to the EAFRD established under that Article.

6. The Commission is empowered to adopt delegated acts in accordance with Article 152 supplementing this Regulation with rules establishing a harmonised basis for the calculation of the reduction of payments laid down in paragraphs 1 and 2 of this Article to provide detailed rules for the distribution of funds to farmers.