Adjusted Income for Youth Allowance Eligibility

Adjusted Income Options for Farming Families with Children on Youth Allowance

Many farming families across Australia face the same challenge each year — fluctuating farm profits. When weather conditions, commodity prices or market forces swing, so does income. Unfortunately, this volatility can distort how Centrelink assesses eligibility for Youth Allowance, potentially disadvantaging rural families with children studying or training.

The Problem: One Good Year Can Skew Eligibility

Youth Allowance is income and asset-tested, with parental income thresholds typically around $60,000–$70,000 for full payment (as at 2024–25).
However, Centrelink bases its decision on taxable income from the most recent tax return.

For farming businesses, that snapshot often fails to reflect long-term financial reality. A single strong income year — for example, after a drought breaks — may make the family appear ineligible, even if cash reserves are low due to debt repayment, reinvestment, or seasonal expenses.

The Solution: Adjusted Income (Actual Means Test)

Centrelink recognises that primary producers’ taxable income can fluctuate dramatically from year to year.
Through the Actual Means Test (AMT), families can request an Adjusted Taxable Income Assessment.

This allows Centrelink to consider income over multiple years, offering a more accurate reflection of financial capacity.

To apply, families need to:

• Request a reassessment under Centrelink’s fluctuating income provisions.
• Provide at least three years of farm financials, including tax returns and BAS.
• Supply evidence such as Farm Management Deposit (FMD) details and explanations for exceptional income events (e.g. drought relief or one-off asset sales).

Example:
If farm income over three years is $15,000, $120,000 and $60,000, the average ($65,000) may fall within Youth Allowance thresholds — restoring eligibility that would otherwise be lost due to one strong season.