Services Australia has recently announced a crucial reminder for all young Australians who receive the Youth Allowance or ABSTUDY payment as a dependant. The department may be sending out correspondence this month, specifically requesting an update on their parents’ or guardians’ financial details. This yearly reassessment is a fundamental part of the Parental Means Test, and it is necessary to ensure that the recipient is being paid the correct entitlement based on their family’s current financial circumstances. Parents must act on this letter and provide the requested income information by the specified due date; otherwise, the payment to their dependent child may be temporarily suspended until the details are lodged. It is important to note that if a letter has not been received, it means the necessary information is already held by Services Australia and no action is required at this time.
Detailed summary of key details
- Announcing Institution: Services Australia (incorporating Centrelink services).
- Recipients Affected: Individuals receiving Youth Allowance or ABSTUDY payments who are classified as a dependent youth, which may include students and Australian Apprentices.
- Date of Announcement: Published and last updated on 9 September 2025.
- Action Required: Parents or guardians must provide updated income details by the date stipulated in the letter sent to the dependant.
- Consequence of Inaction: If the income information is not updated by the due date, the dependent’s Youth Allowance or ABSTUDY payment may be stopped.
- Income Components Assessed: The Parental Income Test considers the combined parental taxable income, tax-free pensions and benefits, fringe benefits, reportable superannuation contributions, and total net investment losses.
- Income Threshold Example: While subject to annual change and family size, the full dependent Youth Allowance rate may be payable if the parental income is below a certain threshold (e.g., an earlier figure was approximately $62,634), with the payment reducing by 20 cents for every dollar over this amount.
- Process Method: Parents are typically required to use a One Time Access Code (OTAC) printed on the letter to log in and update the details online.
- Phone Contact: For assistance with Youth and Student payments, the contact number is 132 490.
Full explanation of the government announcement
The Australian Government, through Services Australia, undertakes an annual process to review and confirm the financial details of parents and guardians whose children are receiving Youth Allowance or ABSTUDY as dependants. This particular announcement serves as a timely heads-up that letters will be dispatched this month, advising parents that it is time for their yearly income update. This is not just a bureaucratic exercise; it is the cornerstone of the fairness principle in our social security system, ensuring that the taxpayer funds are correctly allocated to those young people who genuinely require support to continue their education or apprenticeship.
The background to this is the Parental Means Test, which exists because the government expects parents to financially support their dependent children up to a certain level. When a dependent youth receives a payment, the rate is calculated using their parents’ income from the previous financial year, or the current year if their income has reduced significantly. Therefore, the annual update is vital to reflect the family’s most current financial position, which in turn determines the correct payment amount for the student or Australian Apprentice. Receiving the correct rate prevents the hassle of overpayments, which would have to be paid back to the Commonwealth, or underpayments, which would reduce the assistance available to the young person.
If you or your child have received one of these important letters, it is absolutely paramount that you act quickly. The department is quite firm that the payment will be interrupted if the necessary details are not provided by the cut-off date. You can find more comprehensive details on the process and specific requirements for your payment by visiting the original announcement at Services Australia’s official webpage. We strongly encourage all affected families to comply promptly to maintain the smooth flow of the young person’s payments. For ongoing information and updates on various support payments and services, you might also find it helpful to follow news and guides such as those available on Medigosa for Services Australia.
How to update parental income for youth allowance or abstudy
The process for updating your parental income details is designed to be straightforward, usually completed online by the parent or guardian:
- Receive the Letter: Your dependent child will receive a letter from Services Australia (Centrelink) requesting the income details. This letter is critical as it contains a special code.
- Locate the Access Code: The letter will include a unique One Time Access Code (OTAC) or a Verification Code. The parent/guardian will need this code to proceed with the online update.
- Access the Online Service: The parent/guardian should go to the Services Australia website and navigate to the ‘Advise Parental Income’ service.
- Log In and Advise: The parent/guardian will use the OTAC to log in and securely provide their financial information. This is where they will report their combined taxable income and other financial details, such as fringe benefits and reportable super contributions.
- Lodge and Confirm: Submit the information online. You should receive a confirmation that the details have been successfully lodged with the department.
- Seek Assistance: If you do not have a code, have lost the letter, or if your income has significantly dropped since the last tax year, you should contact Services Australia’s Youth and Students line on 132 490 to discuss a current year assessment.
Questions and answers about parental income updates
- Q: Why do I need to update my parents’ income every year?
A: Services Australia annually reassesses the Parental Means Test to ensure your payment rate accurately reflects your family’s current financial position, as required by the social security law. - Q: What happens if I don’t receive a letter?
A: If you do not receive a letter, it means the department already has the information they need for your payment and you do not need to take any action at this time. - Q: Who needs to provide the income details—me or my parents?
A: As a dependent, your parents or guardians are the ones who need to provide their combined income details to Services Australia. - Q: What is the deadline for providing the income update?
A: The specific deadline will be printed on the letter you or your child receives. It is essential to meet this date to avoid payment suspension. - Q: What income details do my parents need to report?
A: They need to report their combined parental taxable income, certain tax-free pensions/benefits, fringe benefits, reportable super contributions, and net investment losses. - Q: Is there an income limit for my parents?
A: Yes, there is a Parental Income Test threshold. If your parents’ income is above this amount, your payment rate will be reduced, though a full cut-off threshold also applies. - Q: My parents are separated; whose income is assessed?
A: Generally, Services Australia will assess the income of the parent you spend the most time living with, or the parent you choose if time is spent equally. - Q: Will my payment stop straight away if the income details are late?
A: Services Australia has stated they “may stop your payment” until the information is provided, so a temporary suspension is a strong possibility. - Q: Can my parents use the income from the current tax year?
A: The department typically uses the previous tax year’s income, but they may use the current tax year if your parents’ income has significantly reduced. - Q: What is the One Time Access Code (OTAC) for?
A: The OTAC is a unique code printed on the letter that allows your parents to securely log in to the online service to advise their income. - Q: Does child support or maintenance income affect my Youth Allowance?
A: Yes, maintenance income your parents receive for you or your siblings is considered under the Maintenance Income Test, which is part of the Parental Means Test. - Q: How will I know if my payment rate changes?
A: Once the new parental income is assessed, Services Australia will notify you of any change to your Youth Allowance or ABSTUDY payment rate. - Q: What if I am an Australian Apprentice?
A: The Parental Income Test applies to dependent Australian Apprentices receiving Youth Allowance or ABSTUDY Living Allowance in the same way it applies to students. - Q: What age group does Youth Allowance generally cover?
A: Youth Allowance typically covers students aged 18 to 24, though 16- and 17-year-olds can be eligible under certain circumstances (e.g., being independent or needing to live away from home). - Q: What is the phone number for help with Youth Allowance or ABSTUDY?
A: You can call the Youth and Students line on 132 490 for information and assistance. - Q: Can my parents update their income in person?
A: While the online method using the OTAC is the primary way, parents may be able to visit a Centrelink Service Centre with their documentation, particularly if they have a complex situation or need to report a significant change in current year income.
