How does the Centrelink Means Test work.....and what does it mean?
Centrelink will assess either your income, or the income of your parents when you apply for Youth Allowance. If you meet the eligibility criteria to apply for an Independent Youth Allowance (that is independent of your parental income) Centrelink will assess your personal income, to decide if you are on a low enough income to receive an Independent YA payment. If you are applying as a dependent, Centrelink will test the income of your parent(s), and will in addition consider any dependent children under 21 years of age under the Family Pool ruling.
Previous Family Assets Tests and Family Actual Means Test are no longer required.
Fortnightly personal income test threshold
Centrelink applies the personal income test to independent Youth Allowance and Austudy applicants.
You should be aware of several points.
- Gross income is assessed.
- The first $8,647 (in 2022) of a merit and equity based scholarship is exempt from your income test. More than that counts as income and may affect your payment rate.
- The income-free area is up to $452.00 per fortnight - with reductions in your fortnightly Youth Allowance/Austudy payments for additional dollars earned (see table below).
If you earn any money at all, you must report it to Centrelink (opens an external site). You should be aware of the amount you can earn from work (opens an external site).
| Student's status | Earnings permitted to retain full Aus/Abstudy/Youth Allowance (pf)* |
Maximum earnings reduces to $0 (pf)* |
|---|---|---|
| Single, aged under 18, at home |
up to $452 (before tax) | less than $996.05 |
| Single, aged 18 or over, at home |
up to $452 | less than $1086,34 |
| Single or partnered, no dependants, away from home |
up to $452 | less than $1,362,67 |
Please note: *pf = per fortnight. All $amounts refer to 'before tax earnings'. For students, fortnightly income between $437.00 and $542.00 reduces the fortnightly allowance by 50 cents in the dollar. Income above $542.00 reduces Centrelink payments by $43.50 plus 60 cents for each dollar you earn over $542, to a maximum cut-off income as listed in the table above. For students the income test is subject to Income Bank credit.
Income bank
The Income Bank helps students to keep more of their Youth Allowance/Austudy/Abstudy, by crediting your Income Bank with any amount you earn below the allowed $452.00 per fortnight. If you earn less than $452.00 per fortnight, the balance up to $452.00 is accumulated and added to the Income Bank for times you earn more than this per fortnight. The maximum amount a student can accumulate in their Income Bank is currently $10,900 (in 2019).
Parental Means Test
The parental means test measures whether your parents can financially support you while you are a student, as per the Centrelink guidelines.
From 1 January 2016, parents are tested on their taxable income, the Parental Income test, only.
The previous, additional requirements of the Family Actual Means Test and the Family Assets Test were formally removed from Youth Allowance Parental Means test arrangements, on 1 January 2016.
Parental Income Test
Parental income includes:
- your parents' combined taxable income
- any maintenance payments they receive (any maintenance paid during the tax year is deducted from their taxable income amount)
- the value of employee fringe benefits they receive
- any income from a country other than Australia, and
- business losses (including negatively geared property and shares).
It’s important to note:
- If combined parental income is less than $55,626 (as assessed in 2021-2022 financial year), you will receive the maximum rate of Youth Allowance or Abstudy. Additional information on assets testing, including annual adjustments to the parental income threshold are listed on the Services Australia website (opens an external site).
- The Youth Allowance payment rate reduces by 20 cents for every $1.00 over this threshold.
- Additional dependent children aged 16-21 years old may attract an increase or continuation of Youth Allowance payments with earnings over the threshold, under the Family Pool ruling.
- Some students with siblings may still eligible for a part Youth Allowance payment, even when the parents are earning up to a collective $150,000.
When am I independent?
The age of independence for a Youth Allowance recipient is 22 years. Please check with Centrelink on your eligibility, as well as for information on the personal income test.
Alternatively, if you wish to apply for an Independent Youth Allowance rate before you turn 22, you will need to satisfy the independent criterion.
More information
For the latest updates and application information, please see the Centrelink website (opens an external site), and its contact page (opens an external site).