How Your Income Affects Your Youth Allowance Or Austudy
If you are working while receiving Youth Allowance or Austudy, your Centrelink payment might be affected by your wages. Use the information below to get an understanding of how this process works, but if you have difficulty following the maths that’s involved, contact an SRC Caseworker to discuss your specific situation.
Personal Income Test
Your payment is reduced by 50 cents for each dollar your gross income is over $480, up to $575 per fortnight. Once your gross income exceeds $575 per fortnight, your payment reduces at a rate of 60 cents for every dollar over $575.
If your gross income is $520 per fortnight, your payment reduces by $20
($520 - $480) x $0.50
= $40 x $0.50
If your gross income is $675 per fortnight, your payment reduces by $47.50 for the income between $480 and $575, plus a further $60 for the amount above $575. That’s a total of $107.50.
[($575 - $480) x $0.50] + [($675-$575) x $0.60]
= [$95 x $0.50] + [$100 x $0.60]
= $47.50 + $60
However, your payment only reduces if your Student Income Bank has been reduced to zero and your remaining income is over $480 that fortnight.
Student Income Bank (SIB)
The Student Income Bank (SIB) is like an imaginary bank account of personal income test credit. Centrelink understands many students work more during holidays and the SIB is designed to average out the impact of your earnings.
Increases to your SIB
Each fortnight your SIB increases by the amount your income is below $480. For example, if you have no income, your SIB increases by $480. If you earn $300 your SIB increases by $180. The maximum your SIB can accumulate to is $12,000. Your SIB does not reset each semester or year, unless you cease being a full-time student.
Decreases to your SIB
If you earn more than $480 in a fortnight, your SIB will be reduced by the amount your income is over $480 that fortnight. For example, if you earn $600 your SIB credit decreases by $120 without your payment being reduced. Your SIB cannot go below zero. Once your SIB reaches zero the amount of income left over that fortnight is subject to the Personal Income Test.
Calculating Payment Reductions
If you know your SIB balance and your fortnightly gross (before tax) income, you can work out if your payment will be reduced and by how much. If you need help working this out, ask an SRC Caseworker.
Reporting Your Income
If you receive Youth Allowance or Austudy you must report your income to Centrelink fortnightly. Make sure you report the correct gross (before tax) earnings amount. Keep payslips and record any receipt numbers from Centrelink.
Do scholarships count as ‘income’?
The first $9,174 of a merit and equity based scholarship is exempt from means testing. Most other scholarships are counted as income, even if they are tax deductable. (Exceptions are listed below.) This means scholarships are included in the Income Test and may reduce your payment. If the scholarship is a lump sum payment Centrelink will normally divide it by 26 (fortnights) and add this amount to your fortnightly income for the year.
Scholarships not counted as income:
- Centrelink Start-Up Loans & Relocation Scholarships
- Commonwealth Learning Scholarships
- Scholarships that waive or pay the tuition fee (including HECS)
- Limited scholarships awarded as gifts
- One off lump sum prizes
- Allowances for specified out of pocket expenses
- Free or reduced board & lodging
- Approved scholarships awarded outside Australia for living expenses
Although scholarships are income for income test purposes they DO NOT count as work income to gain the independent status, unless they are payment for work.
Partners Income: The Partner Income Test
If your partner receives a Centrelink payment, you might not be subjected to the Partner Income Test. If you partner does not receive a Centrelink payment, you will be subjected to the Partner Income Test each fortnight, regardless of whether you share money. Your Youth Allowance or Austudy payment is reduced by 60c for every dollar that your partner’s gross income in a fortnight exceeds the “partner income free area”. This amount varies according to your circumstances, between $1,117 and $1,201.
The Parental Income Test
If you are on Austudy or YA as an independent student, the Parental Income Test does not apply to you. If you are a dependent Youth Allowance student, Centrelink looks at your Parental Income annually. See the SRC information on Effect of Parents income on Centrelink payments for more information
Information and figures current at 3 March 2023. Important Notice and Disclaimer: This information does not constitute legal advice. Check with a caseworker 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.