What is What is the income free area??

The income free area is the amount of income you can have before your payment starts to reduce. Up to the free area, you get the full rate. Past it, your payment goes down as your income rises.

Every payment has its own income free area, and the figures are different from payment to payment. Pensions use a fortnightly free area on your total assessable income. Allowances like JobSeeker also use a fortnightly free area, then reduce the payment in steps above it.

The income free area is about income, not assets. Income can include wages, and for pensioners the deemed income from financial assets. Assets are looked at under a separate assets test where one applies.

How it affects your payment

The income free area decides how much you can earn and still keep your full payment. Because each payment has its own free area, the same wage can affect two payments differently.

Once your income passes the free area, the taper rate decides how quickly your payment reduces. A higher free area and a gentler taper mean you can earn more before your payment runs out. The free areas and cut-offs for each payment are shown on that payment's income test page.

Example

Say you get a payment with a fortnightly income free area and you earn a small amount from a casual job that is under the free area. Your payment does not change, because your income has not passed the free area. If you pick up extra shifts and go over the free area, only the income above the free area counts against your payment, at that payment's taper rate.

Related terms

• Taper rate
• Working Credit
• Income Bank
• Deeming
• Partner income test

Rates current as of 17 July 2026. Source: DSS / Services Australia. Last checked 17 July 2026.