More generous income tests

Newstart will be changed from 1 July 2006 to improve the rewards from part‑time work and allow people to keep more of the extra money they earn while on payment. The income tests on other allowance payments will also be made more generous. These changes will benefit both new and existing recipients.

Changes to Newstart and Parenting Payment Partnered

From 1 July 2006 the Newstart income test will be made more generous.

• The maximum taper for Newstart will be reduced from 70 cents to 60 cents in the dollar.
• Currently, after a free area of $62 per fortnight, a single person has a 50 per cent taper up until $142 per fortnight, before the maximum taper commences. From 1 July 2006, the 50 per cent taper will apply from $62 to $250 per fortnight before the new maximum taper of 60 cents cuts in.

This improves rewards from part-time work and helps people move from welfare into work.

Changes to other allowances

Other allowance payments will also be changed in line with the changes for Newstart, including: Youth Allowance (non-students); Widow Allowance; Partner Allowance; Mature Age Allowance; and Sickness Allowance.

People in receipt of student payments (Youth Allowance (student), Austudy and Abstudy) will also benefit from a reduction in the maximum withdrawal rate from 70 cents in the dollar to 60 cents.

Personal income test for Newstart
(single person, based on current rates)

7 2005-06 Budget