What is What is a taper rate??

A taper rate is how quickly your payment reduces once your income passes the income free area. It is set as an amount of payment lost for each extra dollar of income. For example, a 50 cent taper means you lose 50 cents of payment for every dollar of income above the free area.

Different payments use different taper rates, and some use more than one. JobSeeker reduces by 50 cents in the dollar in a first band, then 60 cents in the dollar higher up. Pensions reduce by 50 cents in the dollar on income above the free area. The single Parenting Payment uses a gentler 40 cents in the dollar.

A lower taper rate is more generous, because your payment reduces more slowly and lasts further up the income scale. A higher taper rate means your payment runs out sooner.

How it affects your payment

The taper rate, together with the income free area, decides your cut-off point, the income level where your payment reaches zero. A higher free area and a gentler taper push the cut-off further out.

For couples, the taper is usually applied to combined income for pensions, or a partner income test applies for allowances. The exact taper and cut-off for each payment are shown on that payment's income test page.

Example

Take a payment with a 50 cent taper. Whatever your income is above the free area, your payment reduces by half of that amount, because you lose 50 cents for each dollar. If the same payment had a 40 cent taper instead, the same income over the free area would reduce your payment by less, so you would keep more. The gentler the taper, the further up the income scale your payment lasts.

Related terms

• Income free area
• Working Credit
• Partner income test

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