Income
Income means:
- an 'income amount' you earn, derive or receive for your own use or benefit, or
- a periodical payment or benefit you receive as a gift or allowance.
It includes income from outside Australia.
'Income amount' means:
- personal earnings; (i.e. earnings for work performed including wages, salaries, bonuses, penalty rates, overtime, commission or honoraria, and stipends)
- monies (i.e. legal tender, cash)
- valuable consideration (i.e. you receive goods, services or some other benefit in exchange for some item, action or promise)
- profits (i.e. the amount of earnings in excess of its expenses, whether of a capital nature or not).
If you have a partner, his or her income and assets are taken into account when working out your payment rate.
Watch our demonstration video about reporting for your payment.
Other examples of income
Financial investments
Financial investments include:
- bank, building society and credit union accounts
- cash
- term deposits
- cheque accounts
- friendly society bonds
- managed investments
- assets held in superannuation and rollover funds held if you are of Age Pension age
- listed shares and securities
- loans and debentures
- shares in unlisted public companies
- gold, silver or platinum bullion.
Financial investments do not include
- your home or its contents
- cars, boats and caravans
- antiques, stamp or coin collections.
Non-Australian income
Non-Australian income (for example, pension from another country) must be converted to Australian dollars for the income test. The rate used is the Commonwealth Bank of Australia's airmail buying rate, obtained on the fifth working day before the first business day of any month. That rate is used for all days in that month.
If you are unhappy with the exchange rate applied, you can ask for a review if the rate of exchange you get varies by more than five per cent from the rate we used. The Department of Human Services tells you every three months about exchange rates used.
Taxable income
Taxable income is your assessable income for tax purposes minus all deductions allowed under Division 8 of the Income Tax Assessment Act 1997. These deductions include any loss or outgoing (eg an expense) incurred in gaining or producing assessable income or necessarily incurred in running a business for the purpose of producing your assessable income. Child support and spousal maintenance paid by a parent is deducted from their taxable income.
Assessable income
Assessable income is income which is used to work out what rate of payment you receive.
Examples include:
- deemed income from financial investments
- gross income from earnings, including fringe benefits
- employment income salary sacrificed into superannuation
- net income from businesses, including farms
- family trust distributions or dividends from private company shares
- net income from rental property
- total net losses from rental property
- income from boarders and lodgers
- deemed income on money in superannuation funds if you have reached age pension age
- reportable superannuation contributions (salary sacrificed contributions)
- non-Australian pensions and income
- any income from sources outside Australia
- income from income stream products, such as annuities, allocated products and superannuation pensions.
Exempt income
Exempt income is income that is not included when working out the rate of payment you receive.
Examples include:
- a rent subsidy paid by the Commonwealth, a state or a territory
- most payments made by us on behalf of other government departments
Note: these payments may be income for the Family Tax Benefit Income Test. - compensation for loss of, or damage to, building, plant and personal effects
- payment for a dependent child
Note: child support payments may impact on the amount of Family Tax Benefit (Part A) that can be paid. - Pensioner Education Supplement and Education Entry Payment if you are receiving a pension, allowance or benefit
- Carer Allowance
- the value of any free board and lodging you receive
- a periodic payment from an immediate relative (for instance, father, mother, son, daughter, brother or sister. Note: this applies only if you are receiving a pension
- emergency relief or similar assistance
- any restitution payments you receive because you were the victim of National Socialist persecution
- payment under the Handicapped Persons Assistance Act 1974
- any withdrawals from, or returns paid, on a First Home Saver Account
- Reimbursement of expenses.
Exempt equity and merit-based scholarships
An equity or merit-based scholarship is any scholarship paid to a person so they can undertake study or research at an educational institution or for achievement in study or research. As a result, most scholarships relating to education would be considered equity or merit-based scholarships.
Up to $7,310 of equity and merit-based scholarships is exempt from the income test. This applies to all payments with a personal, partner or parental income test.
This means these scholarships have less of an impact on your fortnightly Centrelink payment.
Any amount of the scholarships over $7,310 is still considered personal income and may affect your payment rate. The excess amount is averaged over the remaining fortnights of the period of the scholarship. This means it will have a consistent impact on your fortnightly rate of payment.
The $7,310 applies to the total amount of eligible scholarships that you receive - not to each scholarship. This amount is indexed each year.
Income streams
An income stream is a product which allows you to receive regular payments made up of income and a return of the capital you used to buy or acquire the product. You usually receive the payment from the product as a pension or as an annuity. Income streams may be purchased using savings or lump sum superannuation entitlements.
Defined benefit income streams
A defined benefit income stream for social security purposes is a pension paid from a public sector or private sector corporate defined benefit superannuation fund or scheme, such as Comsuper and State Super pensions.
Deeming
Deeming is a simple set of social security rules we use to assess income from financial assets. Under the pension income test and allowance income test, any income you get from financial investments is assessed under these rules. Read more about Deeming.