The Centrelink income test and assets test determine how much you receive from most Centrelink payments. Understanding how these tests work is essential for planning your finances and maximising your entitlements. This guide explains both tests in detail for 2026.
The Income Test
The income test assesses your income (and your partner's income, if you have one) to determine your Centrelink payment. Most payments have a "free area" — an amount you can earn before your payment starts to reduce — and a "taper rate" — the rate at which your payment reduces for each dollar above the free area.
Income test thresholds 2026
| Payment | Free area (single) | Taper rate |
|---|---|---|
| Age Pension | $218/fn | 50c per $1 |
| DSP (21+) | $218/fn | 50c per $1 |
| Carer Payment | $218/fn | 50c per $1 |
| Parenting Payment (single) | $218/fn | 40c per $1 |
| JobSeeker (single) | $150/fn | 50c (to $256), then 60c |
| Youth Allowance | $480/fn (personal) | 50c per $1 |
What counts as income?
Income includes employment income, self-employment income, deemed income from financial assets, rental income, overseas pensions, and most other regular income. It does not include the Age Pension itself, Rent Assistance, Family Tax Benefit, or most one-off payments.
Deeming rates 2026
Financial assets are assessed under the income test using deeming rates — a set rate of return that Centrelink assumes you earn, regardless of actual returns:
- 0.25% per year on the first $62,600 (singles) or $103,800 (couples)
- 2.25% per year on the remainder
For example, if you have $100,000 in a bank account (single), Centrelink deems you to earn: (0.25% × $62,600) + (2.25% × $37,400) = $156.50 + $841.50 = $998 per year, or $38.38 per fortnight.
The Assets Test
The assets test assesses the total value of your assets to determine your payment. Most payments have a lower threshold (below which you receive the full payment) and an upper threshold (above which you receive no payment).
Assets test thresholds 2026 (Age Pension, DSP, Carer Payment)
| Situation | Full payment (below) | No payment (above) |
|---|---|---|
| Homeowner, single | $321,500 | $722,000 |
| Non-homeowner, single | $579,500 | $980,000 |
| Homeowner, couple | $481,500 | $1,085,000 |
| Non-homeowner, couple | $739,500 | $1,343,000 |
Between the lower and upper thresholds, the pension reduces by $3 per fortnight for every $1,000 of assets above the lower threshold.
What counts as assets?
Assets include bank accounts, shares, managed funds, superannuation (once you reach pension age), investment properties, vehicles, boats, caravans, household contents, and business assets.
What is exempt from the assets test?
The following are exempt from the assets test:
- Your principal home (the family home)
- Prepaid funeral expenses (up to $13,500)
- Some compensation payments
- Certain trust and company assets (complex rules apply)
Which Test Applies — Income or Assets?
Centrelink applies both the income test and the assets test, and pays you the lower of the two resulting amounts. This means if either test reduces your payment, you receive the lower amount.
For example, if the income test gives you $800/fn but the assets test gives you $600/fn, you receive $600/fn.
Gifting Rules
If you give away assets or money to reduce your assessable assets, Centrelink has gifting rules:
- You can gift up to $10,000 per financial year
- Over any 5-year period, you can gift up to $30,000 in total
- Gifts above these limits are treated as "deprived assets" and continue to be counted for 5 years
These rules apply to all gifts, including cash, property, and other assets given to family members or others.
How to Calculate Your Payment
Use our Centrelink payment calculator to estimate your payment based on your income and assets. The calculator covers Age Pension, JobSeeker, DSP, Carer Payment, Parenting Payment and Youth Allowance.