Income and assets tests for income support payments made by Centrelink 108-03000000

Customers are assessed under each of the income test and the assets test that applies to them. The lowest rate calculated is the rate payable to the customer.

For couples, the combined value of their assets is used in the asset test. When at least one is a pensioner, each member of the couple is assessed as earning half the combined income. When there are no pensioners, each member of the couple is assessed with their income only. However, their partner’s income will also affect their rate if it is enough to preclude their own payment.

Income below a threshold level is considered to be in an income free area, and does not affect the rate of payment. Above the threshold, payments reduce at tapered rates.

Customers who are granted a pension under an International Agreement and are in receipt of a pension or superannuation payment from that agreement country, may be subject to a direct dollar for dollar rate deduction. The same applies to New Zealand pension payments. Certain compensation income can also result in a dollar for dollar deduction.

The specifics of the income test depend on the personal circumstances of the recipient, for example their payment type, whether they have a partner, and the number of dependent children for Parenting Payment Single (PPS) and the transitional rules for pension customers.

Assets have no impact on the payment, until the value exceeds the assets threshold.

For Allowances and Parenting Payment Single, payments are not payable once the assets threshold is reached. Parenting Payment is subject to the Allowance Assets Test.

For Pensions other than Parenting Payment Single, once the assets threshold is reached, payments are tapered as assets increase, reducing until it reaches zero.

The assets test varies according to the customer's partner and homeowner situation.

Many people receive different types of payments from the Department of Veterans' Affairs (DVA). The effect on eligibility for payments administered by Services Australia depends on the type of payment(s) received from DVA. Some payments made by DVA are exempt under the Income Test for Social Security pensions and allowances. Other payments are treated under the Income Test for Social Security pensions and allowances.

The Defence Force Income Support Allowance (DFISA) was an allowance paid by the Department of Veterans' Affairs (DVA) to customers whose income support payment under Social Security Law was reduced because of the inclusion of DVA Adjusted Disability Pension as assessable income. Payments made under other Commonwealth Acts and regulations may attract DFISA like payments.

From 1 January 2022, Adjusted Disability Pensions are exempt from the income test. As a result, DFISA ceased for all periods of entitlement from 1 January 2022.

Most Services Australia administered income support payments are compensation affected payments (CAP). This means that most compensation payments are not treated as employment income or other ordinary income when calculating a rate of payment, but are instead subject to the compensation provisions set out in Part 3.14 of the Social Security Act 1991.