How Your Partner's Income Affects Your Centrelink Payment

Before we get into the income test numbers, you need to understand how Centrelink defines a "member of a couple" — because it's broader than many people expect, and getting it wrong can result in a significant debt. Centrelink considers you a member of a couple if you're: - Legally married and living together - In a registered relationship (registered with a state births, deaths, and marriages registry) - Living with someone in a de facto relationship The de facto definition is where it gets complicated. Centrelink looks at five factors to determine whether you're in a de facto relationship: 1. **Financial aspects:** Do you share finances, bank accounts, or expenses? 2. **Nature of the household:** Do you share household duties, meals, or living spaces? 3. **Social aspects:** Do you present as a couple to friends, family, or the community? 4. **Sexual relationship:** Is there an intimate relationship? (Centrelink can ask, though this is just one factor) 5. **Commitment:** Is there a mutual commitment to a shared life? No single factor is decisive. Centrelink looks at the overall picture. You can be considered a member of a couple even if you maintain separate finances, as long as the other factors suggest a couple relationship. Conversely, sharing a house with someone doesn't automatically make you a couple — flatmates are not couples. If Centrelink determines you're a member of a couple, you're assessed on the partnered rate (which is lower per person) and your partner's income is taken into account. This can result in a debt if you were receiving the single rate.

For allowance payments (JobSeeker, Youth Allowance, Parenting Payment Partnered, Austudy), the partner income test works as follows: **Your own income test:** Your own income is assessed first using the standard income test for your payment. For JobSeeker, this is: - Income free area: $150 per fortnight - 50 cents reduction for each dollar between $150 and $256 - 60 cents reduction for each dollar above $256 **Partner income test:** Your partner's income is then assessed separately: - Partner income free area: approximately $1,256 per fortnight (approximately $32,656 per year) - For each dollar your partner earns above $1,256 per fortnight, your payment reduces by 60 cents The more your partner earns, the less Centrelink you receive — regardless of whether your partner actually shares their income with you.

This is one of the most frustrating aspects of the system for many couples. **Worked example — partner works part-time:** John receives JobSeeker. His partner Lisa works part-time earning $800 per fortnight. - Lisa's income ($800) is below the partner income free area ($1,256), so there's no reduction to John's payment from Lisa's income - John receives his full JobSeeker rate (subject to his own income test) **Worked example — partner works full-time:** John receives JobSeeker. His partner Lisa works full-time earning $2,000 per fortnight. - Lisa's income above the partner income free area: $2,000 - $1,256 = $744 - Reduction to John's payment: $744 x 60 cents = $446.40 per fortnight - John's JobSeeker (approximately $698.30 partnered rate) minus $446.40 = $251.90 per fortnight If Lisa earned approximately $2,420 per fortnight or more, John's payment would be reduced to zero.

The partner income test works differently for pension payments compared to allowances. For pension payments, the couple's income is combined and assessed together: - Combined income free area: $360 per fortnight (for the couple together) - For each dollar of combined income above $360 per fortnight, the couple's combined pension reduces by 50 cents - The reduction is split equally between both members of the couple who are receiving a pension If only one member of the couple receives a pension and the other doesn't, the non-pensioner's income is still counted in the combined income. **Worked example — one partner on Age Pension:** Brian (68) receives the Age Pension. His wife Margaret (65) works earning $1,200 per fortnight. - Combined income: $0 (Brian has no other income) + $1,200 (Margaret) = $1,200 per fortnight - However, Brian gets the Work Bonus ($300 per fortnight offset against employment income) — but this only applies to his own employment income, not Margaret's - Income above the free area: $1,200 - $360 = $840 - Pension reduction: $840 x 50 cents = $420 per fortnight - Brian's pension is reduced by $420 per fortnight from his share The couple income test for pensions is generally more favourable than the partner income test for allowances, because the taper rate is 50 cents (not 60 cents) and the combined income is assessed rather than the partner's income alone. IMPORTANT: if both members of the couple receive a pension, the reduction is shared between them.

The short version: If only one receives a pension, that person bears the full reduction.

The point at which your partner's income completely eliminates your Centrelink payment depends on which payment you receive and your specific circumstances. Here are approximate cut-off points: **JobSeeker (partnered):** Your payment cuts out when your partner earns approximately $2,420 per fortnight (approximately $62,920 per year), assuming you've no income of your own. **Parenting Payment Partnered:** Similar to JobSeeker — the partner income cut-off is approximately $2,420 per fortnight. **Age Pension (couple, only one receiving):** If only one partner receives the Age Pension and the other works, the pension cuts out when the couple's combined income exceeds approximately $4,039 per fortnight (approximately $105,014 per year).

But this includes income from assets (deeming) and other sources. **Youth Allowance (partnered):** The partner income cut-off is approximately $2,165 per fortnight. These are approximate figures and depend on your exact circumstances, including your own income, assets, and which supplements you receive. Use our calculators for a precise figure. Note: even if your partner's income is above the cut-off and you receive zero payment, you may still be eligible for a Health Care Card (through the Low Income Health Care Card) and Family Tax Benefit. Don't assume you lose everything just because the income support payment cuts out. Simple as that.

There are several situations where the partner income test is adjusted or doesn't apply: **Separated under one roof:** If you and your partner have separated but are still living in the same house (often because neither can afford to move out), you can apply for the single rate. You will need to provide evidence that the relationship has ended — separate bedrooms, separate finances, separate social lives.

Centrelink may interview you and your former partner separately to assess the claim. **Illness-separated rate:** If you and your partner are forced to live apart because one of you is in hospital, residential aged care, or institutional care due to illness, you can receive the higher single rate of your pension. This recognises the additional costs of maintaining two separate households. To qualify for the illness-separated rate: - One partner must be in approved care (hospital, nursing home, etc.) and unable to live at home - The separation must be due to illness, not choice - Both partners must still consider themselves a couple (if you've separated, you would apply for the standard single rate instead) The illness-separated rate can make a significant difference. For Age Pension, the single rate (approximately $1,144.40 per fortnight) is substantially more than the partnered rate (approximately $862.60 per fortnight each). **Temporarily separated:** If you're temporarily separated (for example, one partner is travelling or working away), you continue to be assessed as a couple.

Real talk — The separation must be permanent or due to illness to affect your payment rate.

While you can't change the rules, there are legitimate strategies that couples can use to minimise the impact of the partner income test: **1. Understand the partner income free area** If your partner is considering returning to work, know that they can earn up to $1,256 per fortnight (for allowance payments) without affecting your payment at all.

Part-time work below this threshold is effectively "free" from a Centrelink perspective. **2. Consider the Work Bonus (for pensioners)** If one or both partners are over Age Pension age, the Work Bonus allows up to $300 per fortnight of employment income to be excluded from the income test, with a bank of up to $11,800. This can significantly reduce the impact of part-time work on your pension. **3. Salary sacrifice into superannuation** If one partner is working and the other is on Centrelink, salary sacrificing into super can reduce the assessable income for the partner income test. However, this only works before Age Pension age — once you're over 67, super in pension phase is a deemed financial asset. **4. Review your relationship status honestly** If your relationship has genuinely ended but you're still living together, apply for separated under one roof. The single rate is significantly higher and no partner income test applies. **5. Time income carefully** Centrelink assesses income on a fortnightly basis. If your partner has variable income (for example, casual or seasonal work), try to smooth the income across fortnights rather than having large spikes that push above the partner income free area. **6. Get your assets right** The assets test can also affect your payments as a couple. If you've significant assets, restructuring them (for example, paying off the mortgage or gifting within allowed limits) can help. Seek professional financial advice. IMPORTANT: never misrepresent your relationship status or living arrangements to Centrelink. Relationship fraud is one of the most heavily investigated compliance areas, and the consequences — including debt recovery and potential prosecution — are severe.