“Personal Income Test”

Your payment is reduced by 50 cents for each dollar your gross income is over $437, up to $524 per fortnight.
eg. if gross income is $477 per fortnight then your payment reduces by $20

Once gross income exceeds $524 per fortnight your payment reduces at 60 cents for every dollar.
eg. if gross income is $624 per fortnight, your payment reduces by $43.50 for the income between $437 and $524, plus a further $60 for the amount between $524 and $624. The total reduction would therefore be $103.50 that fortnight.

However, your payment only reduces if your Student Income Bank is used up (reduced to zero) and your remaining income is over $437 that fortnight. (see opposite)

Reporting Your Income

If you receive Youth Allowance or Austudy you need to report your income to Centrelink fortnightly. Make sure you report the correct gross (before tax) earnings amount. Keep payslips and record any receipt numbers Centrelink give you.

Do scholarships count as ‘income’?

The first $8,355 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 (incl. HECS)
  • Limited scholarships awarded as gifts (seek advice)
  • One off lump sum prizes (seek advice)
  • Allowance for specified ‘out of pocket expenses’
  • Value of free or reduced ‘board & lodging’
  • Approved scholarships’ awarded outside Australia for living expenses
  • Abstudy allowances

NOTE: Although scholarships are income for income test purposes they DO NOT count as work income to gain ‘independence’ – unless they are payment for work.

Student Income Bank (SIB)

The Student Income Bank (SIB) is like an imaginary bank account of 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 goes up by the amount your income is below $437.
eg. if you have no income, your SIB increases by $437 if you earn $300 your SIB increases by $137. The maximum your SIB can accumulate to is $11,300.

Your SIB is not reset each semester or year – it rolls over so you can keep your credit as you study. However, if you cease being a full-time student you lose any credit and start from $0 again when you return to full time study.

Decreases to your SIB

If you earn more than $437 in a fortnight, Centrelink will look at your SIB before reducing your payment. Your payment is reduced only if your SIB is $0. If you have credit left in your SIB, then your SIB will be reduced by the amount your income is over $437 that fortnight.
eg. if you earn $600 your SIB credit goes down by $163 without your payment being reduced. Your SIB cannot go below zero.

Once your SIB hits zero the amount of income left over that fortnight is subject to the Personal Income Test and the Partnered Income Test, and your payment will be reduced (If you have a partner see overleaf).
Note: You must always report income changes to Centrelink even if you earn under $437 per fortnight, because it will change your SIB balance. Not doing so may result in a penalty or overpayment.

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. Below are listed the possible scenarios:

Your payment will not be reduced if:

1. Your gross income is less than $437 in the fortnight.

Your SIB balance will increase by the amount your income is under $437.Eg. Xiang earns $380 in a fortnight. His payment will not be reduced and his SIB balance will be increased $57.

2. Your SIB balance is greater than the amount left over when you take $437 away from your income.

While your payment will not be affected, your SIB balance will be reduced by the amount your income is greater than $437.
eg. Chris earns $500 in a fortnight, and her SIB balance is $1,000. Chris’s income minus $437 is $500 – $437 =$63. Centrelink will not reduce her payment, but will reduce her SIB balance by $63, meaning her new SIB balance is $937.

Your payment will be reduced if your income is over $437 and you do not have enough SIB balance to offset this.

1. If your income minus your SIB is between $437 and $524:

Reduction = (gross income – SIB balance – $437) x $0.50
eg: Anna earns $660 in a fortnight and has a $200 SIB balance. Her income minus her SIB balance is $460. This is $13 more than $437 (the personal income test threshold). Centrelink will apply a reduction rate of 50 cents in the dollar to this $13.

Anna’s payment reduction:
= ($660 – $200 – $437) x $0.50
= $11.50 x $0.50
= $5.75

2. If your income minus your SIB is over $524:

Reduction = [(Gross income – SIB balance – $524) x $0.60] + $43.50
eg. Rakesh earns $1,000 in a fortnight & has an SIB balance of $300. His income minus SIB balance is $700, which is over the personal income test threshold of $437 & over the $524 threshold where the higher rate of reduction applies (60c in the dollar, as opposed to 50c). A 60c in the dollar reduction rate is applied to the amount over $524, on top of the 50c in the dollar reduction rate applied to the $87 between $437 & $524 ($43.50).

Rakesh’s payment reduction
= [($1,000 – $300 – $524) x $0.60] + $43.50
= ($176x $0.60) + $43.50
= $105.60 + $43.50
= $149.10


If your SIB balance is zero, you will not receive a student payment in a fortnight if your income in that fortnight is:
$1,050.17 per fortnight, living at home, single, no dependents
$1,317.34 per fortnight, living away from home, single, no dependents (slightly higher if you are eligible for Rent Assistance)

Also, if the amount of your payment reduction exceeds your maximum payable amount of Youth Allowance or Austudy you will get no payment that fortnight.

Partners Income: The Partnered Income Test

If you have a partner (either married or de facto) you will be subjected to the Partner Income Test each fortnight, regardless of whether you share money or not.

Your Youth Allowance or Austudy payment is reduced by 60c
for every dollar that your partner’s gross income in a fortnight goes over:
$1,317.34 – if they are getting Austudy or Youth Allowance as a full-time student.

That number is the point at which your partner would not be payable for their Centrelink payment.

If your partner is not getting Austudy or Youth Allowance as a full-time student then your payment is reduced by 60c for every dollar that your partner’s gross income in a fortnight goes over:
$1,137 – if they are 22 or older, or
$1,033 – if they are under 22 years old.

These numbers are the points at which they would not be payable for the relevant Centrelink payment as a job seeker [Youth Allowance (Jobseeker) and Newstart Allowance (Partnered)], whether they get those payments or not. Your partner might be working, or a student and not on a payment, but Centrelink still use those numbers.

Different rules apply if your partner is receiving a social security or service pension (e.g. Age Pension).

Do they have to look at your partner’s income?

Whether you are in a defacto or marriage like relationship is an open question, particularly if you have lived with your partner for under 12 months and/or do not consider this to be a permanent arrangement.

See the SRC leaflet Relationships & Centrelink for more information about how your relationship may affect your payment.

The Parental Income Test

If you are on Austudy or YA independent (eg. because you are over 22), you do not need to worry about your Parental Income.

If you are on ‘dependent’ Youth Allowance, Centrelink looks at your Parental Income annually. Your payment will not vary each fortnight because of your parent/s income.

See the SRC leaflet How Parental Income Affects Youth Allowance for more information.

Information and figures current at Oct 2021.  (CL-INC 20.6.22)

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.