Austudy Income Test Explained (2026): Personal Test, Partner Test, Turning 25

General information only. This is not tax or financial advice, nor financial-counselling advice. Rates and thresholds are indexed and change periodically — confirm current figures with Services Australia before relying on them.

Austudy is the 25-and-over counterpart to Youth Allowance — same idea of income support for full-time students and Australian Apprentices, but without the parental means test that applies to dependent Youth Allowance recipients. What Austudy still has, though, is its own personal income test, a partner income test if you have a partner, and a genuinely confusing rule about what happens the fortnight you turn 25 mid-course. This article covers all three in detail.

The personal income test

Austudy runs on exactly the same personal income test as Youth Allowance (student) — the Social Security Guide describes both under a single provision (the free area and income bank rules for “full-time students” apply identically to YA and Austudy recipients), so everything below applies to both payments equally:

• Free area: $539 per fortnight (2026). Income up to this amount doesn’t reduce your payment at all.
• $539–$646 per fortnight: 50 cents in the dollar. Every dollar in this band costs you 50 cents of payment.
• Above $646 per fortnight: $53.50 plus 60 cents in the dollar. Once you clear $646/fn, the taper steepens — you lose the full $53.50 from the lower band, then 60 cents for every dollar above $646.

So a student earning $700 a fortnight — $61 over the $646 upper boundary — loses $53.50 (the full lower-band reduction) plus 60% × $61 = $36.60, a total reduction of $90.10 that fortnight.

The Student Income Bank

Austudy recipients get the same Student Income Bank as Youth Allowance students: in any fortnight you earn less than the $539 free area, the shortfall is banked as a credit, up to a maximum of $13,500 (2026). The balance isn’t reset each calendar year and carries over vacation periods, so unused credit from a quiet semester fortnight is still there to absorb a high-earning fortnight later — a placement block, an intensive tutoring stint, or a summer job. See how the Student Income Bank works for the accrual mechanics and a worked drawdown example — the same mechanics apply to Austudy, statute for statute.

The partner income test

If you have a partner, their income is assessed separately from yours, under the general allowance partner income test that applies across JobSeeker, Youth Allowance and Austudy alike: a partner income free area of $1,415 per fortnight, with income above that reducing your payment at 60 cents in the dollar. This runs alongside your own personal income test, not instead of it — Services Australia works out the reduction under each test independently and applies whichever produces the lower payment. A partner earning well above the free area can reduce your Austudy even if your own earnings sit comfortably under $539.

What changes — and what doesn’t — when you turn 25

The common assumption is that a full-time student on Youth Allowance automatically switches to Austudy the moment they turn 25. That’s not quite right, and getting it wrong can mean an unnecessary payment interruption.

“Austudy age” is 25 or over — with one carve-out. You are not treated as Austudy age at 25 if both of the following apply:

• at 25 you’re still doing a course (or full-time Australian Apprenticeship) you started before turning 25, and
• you were receiving Youth Allowance immediately before your 25th birthday.

In that situation, you stay on Youth Allowance until the course or apprenticeship finishes — you do not move to Austudy mid-course. The transition only applies going forward: a new course or apprenticeship started at or after 25 is assessed as Austudy from the outset, and someone who reaches 25 without a YA-eligible course already underway claims Austudy in the ordinary way.

This matters because of the parental income test: Youth Allowance carries a parental means test for dependent claimants, while Austudy never does. If you’re covered by the mid-course carve-out and stay on YA past 25, the parental test keeps applying until your course ends — it does not drop away just because you’ve turned 25. It’s the payment type, not the birthday, that determines whether the parental test is in play.

If you started your course before 25 while already independent of your parents (or the parental test wasn’t reducing your payment anyway), the practical difference is small. But if the parental test has been cutting into your Youth Allowance, don’t assume it disappears at 25 mid-course — check whether the carve-out keeps you on YA first, and budget on that basis.

Is Austudy taxable?

Yes. Austudy is a taxable Australian Government payment — it’s included in your assessable income and reported at the “Australian Government allowances and payments” question on your tax return, the same as JobSeeker and Youth Allowance. Services Australia issues an income statement that pre-fills into myTax. If you also work substantial hours alongside study, combined income from Austudy and wages can push you past the tax-free threshold — see Are Centrelink payments taxable? for the full payment-by-payment breakdown, including the beneficiary tax offset that can reduce or eliminate the tax on your Austudy income.

Putting it together

Your Austudy rate in any fortnight comes down to: your own income against the $539/$646 two-band taper (with the Income Bank absorbing quiet fortnights), your partner’s income against the $1,415 partner test if you have one, and — if you’re near 25 — whether the mid-course carve-out keeps you on Youth Allowance rather than moving you to Austudy. Use the Youth Allowance calculator to model the personal income test and Income Bank together; it applies the same mechanics Austudy runs on.