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Getting the income test right is one of the most overlooked parts of managing your JobSeeker Payment as an older Australian. Most people know there’s a threshold — but what many don’t realise is how nuanced the rules are about what counts as income and what doesn’t.
Miss a reportable amount and you risk an overpayment debt. Overreport income that shouldn’t actually be included, and you could receive less than you’re entitled to. Both outcomes are more common than you’d think, especially for people dealing with part-time work, superannuation drawdowns, investment income, or cash from helping family.
This guide cuts through the complexity and gives you a plain-English breakdown of what Centrelink includes in your income assessment — and what you can safely leave off your fortnightly report.
How the Income Test Works for JobSeeker Recipients
The Basic Threshold Structure
For most JobSeeker Payment recipients, the income test works in two stages. First, there’s a lower threshold where you can earn a small amount without any impact on your payment. Once you exceed that, your payment reduces by a set rate for each additional dollar earned. Earn enough and your payment reaches zero — though you may still be able to reclaim it if your income drops again.
| Earnings Range (per fortnight) | Impact on Payment |
|---|---|
| $0 – $150 | No reduction (free area) |
| $150 – $256 | 50 cents per dollar reduction |
| Above $256 | 60 cents per dollar reduction |
These thresholds are indexed periodically, so the exact figures can shift slightly in March and September each year. Always confirm current rates via myGov or the Services Australia website.
Why the $150 Free Area Matters More Than People Realise
The $150 fortnightly free area is a buffer that many people — especially those doing occasional casual work — either forget about or underestimate. If you earn $140 from a casual shift one fortnight and nothing the next, you can receive your full JobSeeker Payment for both periods. That small amount of income doesn’t reduce your payment at all.
💡 Pro Tip: If you have irregular casual work, keep track of your earnings by fortnight rather than monthly. An uneven spread can mean the difference between a reduced payment and a full payment in certain periods.
The Working Credit System
If you’ve been on JobSeeker for a while and have had low or no income for several fortnights, you may have accumulated Working Credits. These are credits you can draw down to offset employment income — meaning you can earn more than the usual threshold before your payment starts reducing. It’s a feature that’s especially useful when moving back into part-time work.
What Income Does Centrelink Count?
Employment and Self-Employment Income
Any wages, salary, or income from self-employment counts. This includes casual work, part-time employment, contracting, and income from running a small business. Gross income — before tax — is what you report. Centrelink doesn’t allow you to deduct work expenses from employment income in the same way the ATO does.
For self-employment, Centrelink uses a different calculation method. They’ll look at your net business income over a set period and may average it out. If you’re running a sole trader operation, it’s worth getting clarity on how they’ll assess it before assuming your payment is unaffected.
Investment Income and Rental Returns
Income from investments — dividends, distributions from managed funds, rental income — does count toward the income test. The amount included is generally the gross return before any deductions, though Centrelink has specific rules for how rental properties are assessed. Net rental income (after deductible expenses) is typically what’s included, but you should confirm this for your specific situation.
Foreign Income
If you receive income from overseas — a pension from another country, rental income from a foreign property, or earnings from work done abroad — this generally counts. Exchange rate fluctuations can affect reported amounts, and you’ll need to convert to Australian dollars at the rate applicable on the day the income was received.
What Centrelink Does NOT Count as Income
Superannuation Drawdowns — With Important Caveats
This is where a lot of confusion exists. Superannuation that you draw down as a lump sum generally doesn’t count as income for the income test. But there are important exceptions. If you’re drawing down as a regular income stream — like an account-based pension — the rules are more complex. Once you reach Age Pension age, superannuation balances affect the assets test differently.
If you’re under Age Pension age and drawing down occasional lump sums from super, this won’t typically affect your JobSeeker Payment income test assessment. But if you’re structuring super withdrawals as ongoing regular payments, talk to a financial counsellor or call Services Australia before assuming they’re excluded.
Gifts and Inheritances
Receiving a gift from a family member, or an inheritance from a deceased estate, doesn’t count as income. However, if it pushes your assets significantly above the assets test threshold, it could affect your payment through that route rather than the income test. Centrelink also has gifting rules — if you then give large amounts away, they may still count those assets as yours for up to five years.
Certain Government Payments
Most Centrelink payments themselves are not counted as income for the income test — including JobSeeker Payment itself. Similarly, Rent Assistance and Family Tax Benefits paid by Centrelink don’t count. Some government-funded disability or carer supports may also be excluded. Confirm any specific payments you’re unsure about directly with Services Australia.
What Else Doesn’t Count
- Child support payments received — not included in the income test
- GST component of business income — excluded since it’s not yours to keep
- Compensation payments — some types are excluded, others trigger special rules
- Scholarship income — generally excluded if it’s for education costs
- Irregular windfalls like lottery wins — not income, though they affect the assets test if retained
Common Mistakes That Lead to Overpayments
Misreporting the Timing of Income
Centrelink assesses income in the fortnight it’s earned or received, not when it’s paid into your bank account. If you do a week of work but get paid three weeks later, it still counts in the fortnight you did the work. Getting this timing right is important — miscounting which fortnight income belongs to is one of the most common causes of overpayment debts.
Forgetting to Report All Employment Sources
If you have two casual jobs, both need to be reported. If you do a one-off piece of work for a neighbour and receive payment, that counts too. The threshold may mean it doesn’t reduce your payment at all — but you still need to report it accurately.
💡 Pro Tip: Report income in myGov even if you’re certain it’s under the threshold. Centrelink can cross-check with the ATO through Single Touch Payroll data. Unreported income — even under threshold — can be flagged as a compliance issue.
Not Updating Income When It Changes
If your employment income drops significantly mid-fortnight — say, your casual work dries up — you can notify Centrelink of the change rather than waiting for the next reporting cycle. Updating your income estimate helps ensure your payment adjusts in a timely way.
Frequently Asked Questions
Does money from selling personal belongings count as income?
Generally, no. Selling personal items — furniture, a car, household goods — isn’t considered income for the income test. The proceeds do affect your assets, however, if they push your total assets closer to or above the assets test limit. Centrelink may also ask about significant asset disposals if they appear during a review.
What if my partner earns income — does that affect my JobSeeker Payment?
Yes, for partnered recipients, Centrelink applies a partner income test. Your partner’s income can reduce your JobSeeker Payment even if you personally earn nothing. The threshold before partner income affects your payment is higher than the individual threshold, but it does apply. Services Australia’s rate estimator on their website can show you how this works for your specific situation.
Can I deduct childcare or medical expenses from my reported income?
No. The income test is based on gross income received, not net income after personal expenses. Deductions are available through the tax system via the ATO, but they don’t reduce the amount Centrelink counts for your income test.
How often does Centrelink check my income?
You report fortnightly, and Centrelink cross-references this with ATO Single Touch Payroll data for wage earners. Any significant discrepancy between what you report and what employers report to the ATO can trigger a review. It’s much easier to correct a reporting error proactively than to respond to a debt notice.
Is redundancy pay counted as income?
Genuine redundancy payments have special rules. The tax-free component isn’t counted as income. The taxable component may be treated differently depending on how it’s structured. Additionally, receiving a significant payout can affect when you become eligible for Centrelink payments under the Income Maintenance Period rules — effectively a waiting period based on the amount received.
What’s the difference between the income test and the assets test?
The income test looks at money you receive — wages, investment returns, rental income. The assets test looks at what you own — savings, property (other than your home), vehicles, superannuation (once you reach Age Pension age). Both can affect your payment rate. Centrelink applies whichever test results in the lower payment, not both simultaneously.
Getting the Income Test Right Protects Your Payment
The income test isn’t designed to catch people out — but getting it wrong, in either direction, creates problems. Underreporting can result in overpayment debts that take months or years to repay. Overreporting means you may be receiving less than you’re entitled to.
As someone aged 55 or over on JobSeeker Payment, understanding exactly what counts and what doesn’t gives you a real advantage. It lets you take on casual or part-time work with confidence, knowing how each dollar earned affects your payment rate.
If you’re ever unsure about a specific income source, Services Australia’s Financial Information Service officers can provide free, impartial advice — no appointment needed, and no obligation to act on what they tell you.
