Effect of Parental Income on Payments

Parents Income - Effect on Centrelink Payments

Being ‘Dependent’

If you are under 22 and cannot prove you are ‘Independent’ for Centrelink purposes (see the SRC's information on Independence & Centrelink Payments) Centrelink will consider you ‘dependent’ on your parents. They will assess your parental income in the last financial year, through the Parental Means Test.

NOTE: Centrelink will NOT look at parental income if parent receives a designated income support payment (Family Actual Means Test may still apply), compensation or ABSTUDY (certain circumstances only) or holds a Low Income Health Care Card.

Rates of Dependent Youth Allowance

Dependent Youth Allowance rate: $ 389.40 per fortnight (maximum, July 2023). Dependent ‘Away from Home’ rate: $ 562.80 per fortnight (maximum, July 2023). To get the Away From Home rate you must meet the criteria in this leaflet AND have to move from your family home in order to attend University because it is more than 90 minutes away by public transport.

Criteria: Parental Income Test

Income can include combined parental taxable income, income from overseas, adjusted fringe benefits, maintenance payments from a former partner and net passive business losses. If combined parental income is less than $58,108 a year, you can receive the full payment (assuming no deductions for your part-time work). If parental income is above this you can receive a reduced rate of payment until your parental income hits the threshold. The threshold varies according to your family situation. For example:

You and your sibling will need to both apply to get the benefit of this ‘sharing’ of the income test. If you want to check the current Parental Income Test cut-off-point that applies to you:

• Find the current maximum fortnightly rate for each dependent child over 16 but under 22 [$389.40 at home or $562.80 away]
• If there is more than one, add these amounts Then multiply that by 130
• Then add the current parental cut in point [$58,108]

What income does Centrelink look at?

Centrelink will look at your parental income in the tax year before the current calendar year. Centrelink will look at your parental taxable income, ‘adjusted’ fringe benefits, foreign income, maintenance payment from a former partner and ‘passive business loss’. If a tax assessment is not available a ‘reasonable’ estimate can be accepted by Centrelink.

Changes to income

If your parental income in the current tax year is ‘substantially less’ (perhaps by 25%), Centrelink may use your estimate for the current tax year. The drop in income needs to be likely to continue for 2 years (eg. because of retirement, although you need to include retirement benefits in calculating income.) If your parental income in the current tax year increases and exceeds 125% of their previous tax year then, for October, November and December, your payments are calculated using the higher income. Take care when estimating to avoid any overpayment. If you have a brother or sister who is a dependent student and they stop being a student or change their payment you need to tell Centrelink as those changes effect the income test calculations for you.

Separated parents

If your parents are separated you are only considered ‘dependent’ on the parent, plus any new partner they may have, that you live with. If you don’t live with either parent, Centrelink ordinarily assesses the parent you last lived with. Centrelink includes received maintenance payments as income, while any maintenance paid for a child living with a former partner reduces income. If Centrelink assesses both your parent’s income you should appeal. You may also be able to appeal if you think Centrelink should not include your parent’s partner’s income. Come and speak to SRC HELP.

How does parental income affect how much I receive?

To quote Centrelink, “If you are dependent your payment will now be affected by only one test - either the Parental Income Test or the Personal Income Test. Only the income test which has the greatest effect will be used to work out any reductions in your fortnightly payment. Changes in your personal income can change which test is used each fortnight.”

Start Up Scholarships & Loans

The student ‘Start Up Loan’ of $1,201 per semester is a repayable HECS style loan, does not accrue interest, but is indexed on 1st June each year. That is, the amount you owe will increase each year based on “the cost of living”.

Relocation Scholarships

Certain students relocating from, or to, a regional area for study purposes can receive $5,080 in the first year and lesser amounts in later years. Seek advice.

Need more help or advice?

If you need more advice about your specific situation contact an SRC Caseworker by completing the contact form (below) or call 9660 5222 and our reception team will complete the contact form with you.

Caseworker Contact Form

This information does not constitute legal advice. Seek qualified professional advice before making decisions about educational, financial, migration or legal matters. This information can change from time to time. Check for the most up-to-date information. Do not accept verbal advice by itself from any source including Centrelink. Get a decision in writing. Without this subsequent appeals or backdating are at risk.

Information updated on 01/07/23