Personal Income Test and Income Bank for ABSTUDY, Austudy and Youth Allowance (YA) students and Australian Apprentices 010-08010010

ABSTUDY, Austudy and YA full-time (or concessional study load) students and Australian Apprentices are subject to a Personal Income Test on any income they receive. This includes ordinary income from various sources, see Assessment of other ordinary income for Centrelink payments. They have access to the Student Income Bank or the Australian Apprentice Income Bank, which enables them to build up credits when their income does not exceed the income free area.

For ABSTUDY:

• only customers receiving Living Allowance are subject to these Personal Income Test rules
• customers under 16 years of age are not subject to the Personal Income Test unless they are an independent Australian Apprentice

Income Bank applies to any fortnight in which the customer is a full-time (or concessional study-load) student or Australian Apprentice (even if the customer is a student or Australian Apprentice for 1 day in the fortnight). When income paid during the fortnight is less than the income test threshold, the difference can be held as a credit. This credit can then be used to offset any employment income they are paid later (for example, during vacation periods when students have time to work more hours).

The maximum Income Bank balance that can be accumulated for a full-time (or concessional study-load) student is 12,700 credits, while the maximum Income Bank balance for an Australian Apprentice is 1,000 credits.

The Income Bank credit is not set to zero annually, but will revert to a zero balance if:

• the customer loses qualification as a full-time (or concessional study-load) student or an Australian Apprentice
• there is a gap in eligibility between 2 payments that both attract the Student Income Bank, or
• the customer transfers between 2 payments that both attract the Student Income Bank

See the Resources page for examples.

If the student/Australian Apprentice travels overseas and their payment is suspended, the Income Bank credit balance accumulated before the trip will be reinstated when the customer's record is restored on return to Australia.

The Student Income Bank only applies to the customer's personal income. Partner income is not reduced by the Income Bank balance.

Depending on their circumstances, students/Australian Apprentices may also be subject to a Partner Income Test or the Parental Means Test. A student's payment each fortnight will be determined by the test that results in the greatest reduction of the customer's payment. If this rate is nil, payment will not be made in that fortnight.

Students and Australian Apprentices who are paid money from work can access the Income Bank, which allows them to keep more of their YA, Austudy or ABSTUDY (Living Allowance) payment. Students and Australian Apprentices can be paid up to the fortnightly income free area before their payment (or Income Bank credits) reduces. See, Rates and Thresholds. The Resources page has a link to Income Bank.

See Rates and Thresholds for details of the current income free area amount. If the customer's income is less than or equal to the income free area, the affecting income is nil. The unused part of the fortnightly ordinary income free area ($0-the income free area) is accrued each fortnight as credit in the Income Bank. This means full-time (or concessional study-load) students and Australian Apprentices can be paid some money and still accrue a credit.

Example

A student or Australian Apprentice may have regular ordinary income of $60 per fortnight. Each fortnight they would accrue the difference between $60 and the income free area in their Income Bank. Credit continues to accrue until the maximum credit of 12,700 for students or 1,000 for Australian Apprentices is reached.

Paid Parental Leave (PPL) granted to the customer (and/or their partner) for children born or entrusted to care on or after 1 October 2016 is treated as ordinary income for calculating the rate of payment for YA, Austudy and ABSTUDY.

If an ABSTUDY or YA (student) transfers to a YA (Job seeker) payment, they will be able to transfer the lower of their Student Income Bank balance or 3,500 credits to their new Working Credit balance.

ABSTUDY or YA (students) transferring to another payment that attracts Working Credit, for example JobSeeker Payment (JSP), will be able to transfer the lower of their Income Bank balance or 1,000 Income Bank credits to their new Working Credit balance.

Austudy students transferring to another payment that attracts Working Credit, for example JSP, will be able to transfer the lower of their Income Bank balance or 1,000 Income Bank credits to their new Working Credit balance.

If a YA (job seeker) customer transfers to ABSTUDY or YA (student) they will be able to transfer up to a maximum of 3,500 credits of their Working Credit balance to their new Student Income Bank balance.

If an ABSTUDY or YA Australian Apprentice transfers to a YA (job seeker) payment, they will be able to transfer the lower of their Australian Apprentice Income Bank or 1,000 credits to their new Working Credit balance.

Once a student or Australian Apprentice becomes a job seeker a different income free area is applied. See Rates and Thresholds for details of the current income free area amount for customers who receive YA (job seeker) or JSP.

If the customer returned to full-time study or a full-time Australian Apprenticeship after a short break, they are unable to access their previous Income Bank credit. However, they will be able to transfer any credits from their Working Credit balance to their Income Bank.

The Resources page contains a table that provides information on the maximum credits that can be transferred between eligible payments.

There are no provisions for a customer to carry over Income Bank balance credits between YA, Austudy or ABSTUDY. For example, if a customer was in receipt of YA as a student and then decides to cancel their YA and transfer to ABSTUDY, any Income Bank balance does not carry over to ABSTUDY, it is forfeited.

Customers can view their current Income Bank balance.

When making an unfavourable decision, speak to the customer:

• explain the decision
• give them a chance to provide more information, and
• advise their review and appeal rights