Centrelink Income Test Thresholds 2026: Every Payment Compared
Complete reference of 2026 Centrelink income test thresholds for pensions, allowances, and family payments. Includes free areas, taper rates, cut-off points, and deeming rates.
How Centrelink Income Tests Work
Every Centrelink income support payment uses an income test to reduce your payment as your other income rises. Three key numbers define each income test: the income free area (how much you can earn with no payment reduction), the taper rate (how quickly your payment reduces above the free area), and the cut-off point (the income level at which your payment stops). Different payment types have different settings, and some use multiple taper zones where the rate of reduction changes at certain income levels. Income is generally assessed on a gross (pre-tax) fortnightly basis for employment income, while financial assets are assessed using deeming rules. Understanding the specific thresholds for your payment helps you make informed decisions about how much work to take on and how to structure your finances.
Pension Income Test: Age Pension, DSP, Carer Payment
Pension-rate payments including Age Pension, Disability Support Pension, and Carer Payment use a single-taper income test. For a single person, the income free area is $204 per fortnight — you can earn up to this amount with zero reduction. Above $204, the pension reduces by 50 cents for each dollar of excess income. The payment cuts out entirely at approximately $2,436.60 per fortnight for a single person. For couples, the combined income free area is $360 per fortnight, with a combined reduction of 50 cents per dollar above that (25 cents per person). The couple pension cuts out at approximately $3,725.60 combined per fortnight. Pensioners also benefit from the Work Bonus, which provides an additional $300 per fortnight exclusion for employment income, with unused amounts banking up to $11,800.
Allowance Income Test: JobSeeker, Youth Allowance, Austudy
Allowance payments use a two-stage taper that becomes steeper at higher incomes. For JobSeeker Payment, the income free area is $150 per fortnight. Between $150 and $256 per fortnight, the payment reduces by 50 cents per dollar. Above $256, the reduction rate increases to 60 cents per dollar. For a single person on the maximum JobSeeker rate of $762.70 per fortnight, the payment cuts out at approximately $1,384 per fortnight. Youth Allowance and Austudy use the same two-stage taper structure with slightly different thresholds. Partner income also affects allowance payments — if your partner earns above approximately $1,310 per fortnight, your payment starts to reduce by 60 cents per dollar of their excess income. These thresholds are indexed in January and July each year.
Family Payment Income Tests
Family Tax Benefit Part A reduces by 20 cents for every dollar of adjusted taxable income above $65,189 per year until the base rate is reached, then by 30 cents per dollar above $113,546 until it phases out. FTB Part B has a primary earner income limit of $117,194 — above this, no FTB Part B is payable regardless of other circumstances. The secondary earner can earn up to $6,497 per year before FTB Part B reduces at 20 cents per dollar. Parenting Payment Single has an income free area of $222.60 per fortnight with a 40-cent taper rate. Parenting Payment Partnered uses the standard allowance income test with the partner income test also applying. Child Care Subsidy income thresholds range from 90% at $80,000 family income down to 0% at $530,000 through a graduated scale.
Deeming Rules for Financial Assets
Centrelink uses deeming to calculate income from financial assets rather than assessing actual investment returns. As of March 2026, the deeming rates are 0.25% per year on the first $62,600 of financial assets for singles ($103,800 for couples) and 2.25% per year on amounts above those thresholds. Deeming applies to bank accounts, term deposits, shares, managed funds, loans you have made to others, and superannuation for those of pension age. A single person with $150,000 in financial assets would have deemed income of approximately $150.78 per fortnight, calculated as ($62,600 × 0.25% + $87,400 × 2.25%) ÷ 26 fortnights. The deemed amount is then added to any other income for the income test. Deeming rates are set by the Minister and do not automatically adjust with interest rate changes.
Working Credits vs Work Bonus
Two mechanisms help Centrelink recipients keep more of their employment income, but they apply to different payment types. Working Credits apply to allowance recipients (JobSeeker, Youth Allowance, Austudy). When your income falls below the free area, you accrue credits at $1 per dollar of unused free area, up to a maximum bank of 1,000 credits (under 25) or 3,500 (25 and over). When you earn above the free area, credits are automatically used to offset excess income. The Work Bonus applies to pension recipients and provides a flat $300 per fortnight exclusion for employment income only. Unused Work Bonus amounts bank up to $11,800. A pensioner who has not worked for 39 fortnights would have a full $11,800 Work Bonus balance, allowing them to earn a significant amount from employment before any pension reduction. The Work Bonus does not apply to investment income, business income, or foreign pension income.
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General information and estimates only — not financial, tax, or legal advice. Always verify with Services Australia.
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