The income test: free areas, tapers and cut-offs
How much you can earn before your pension reduces, the 50-cent taper, and the income level where payment stops.
The free area
The income free area is the amount of income you can have each fortnight before your pension starts to reduce. From 1 July 2026 the free area is $226 a fortnight for a single person and $396 a fortnight combined for a couple. Income up to those amounts does not reduce your pension at all.
The income test counts income from all sources: employment, rent from investment properties, income from superannuation income streams, and deemed income from financial investments. It also counts your partner's income — couples are assessed together.
The taper: 50 cents in the dollar
Above the free area, your pension reduces by 50 cents for each extra dollar of income. For a couple, the combined reduction is 50 cents per dollar, which works out as 25 cents off each partner's pension. The reduction is gradual, not a cliff: earning a little over the free area costs you a little pension, not all of it.
Worked example. A single pensioner with income of $426 a fortnight is $200 over the $226 free area. The income test reduces the pension by $100 a fortnight — from the maximum of $1,237.70 to $1,137.70. If the assets test gives a lower rate than $1,137.70, that lower rate applies instead.
Where payment stops
Your pension stops entirely once your income reaches the cut-off point. From 20 September 2026 the income cut-offs are $2,701.40 a fortnight for a single person, $4,128.00 a fortnight combined for a couple living together, and $5,346.80 combined for a couple separated due to illness. Higher cut-offs can apply if you receive Rent Assistance, and the Work Bonus lets workers earn more than these amounts before their pension stops.
Cut-off points are reviewed in March, July and September and can change when free areas or pension rates change. The figures above apply from 20 September 2026 — check the current cut-off on Services Australia's income test page if you are reading this later.
Frequently asked questions
Does my partner's income count even if they are not pension age?
Yes. Couples are assessed on combined income, and your partner's income counts under the income test even if your partner is not yet receiving a pension.
I earn a little over the free area. Do I lose the whole pension?
No. The taper is 50 cents per dollar over the free area, so a small amount over costs you a small reduction. You lose the pension entirely only at the cut-off point.
Is superannuation income counted?
Yes, once you reach Age Pension age. Superannuation income streams count, and your super balance is deemed under the income test — see the deeming guide for the worked math.
Official links
Verify every figure on this page at Services Australia: