Australian Parliament House closed to visitors - the public main entrance will be closed indefinitely from 5pm 25 March 2020. Read more.

Youth Allowance from 1998

Back to contents 




Youth Allowance introduced

Enhanced Mutual Obligation arrangements

Youth Allowance (YA) introduced as main income support payment for young people, replacing YTA, NSA and SA for those who were unemployed and aged 15 to 20 years. YA also replaced AUSTUDY for those students aged 16 to 24 years and older students starting a course before turning 25 years of age.

Unemployed YA recipients subject to an activity test regime similar to that for NSA. Enhanced Mutual Obligation arrangements introduced for unemployed YA recipients—all young unemployed people receiving payment for six months required to undertake an additional activity in return for receiving payments.

Full-time study required for students.

Payment rates $145.40 pf for those aged 16 and 17 years living at home, $174.80 pf for those aged 18 years or more living at home and $265.50 pf for those living away from home. Rates indexed annually.

Independent status applied if recipients had supported themselves through employment since leaving school, or were refugees, orphans, homeless, in state care, parents or partnered for over 12 months. Those aged 15 years had to be independent to qualify for YA.

Independent recipients received away-from-home rate and those with children received relevant NSA rate. RA also available to independent recipients.

Recipients who were not independent were subject to a parental income and assets test, supplemented by Family Actual Means Test which was applied to parents who were self-employed or had significant income from certain sources other than wages.

Personal income test applied to all YA recipients. Those who were unemployed were subject to same income test as for NSA. Students were able to receive up to $230 pf before losing 50 cents for each dollar of private income up to $310 pf. Income above that amount reduced payment by 70 cents for each dollar of private income. An income bank of $6000 per annum allowed students to average income and reduce impact of income test on income during high-income periods.


GST compensation

Allowances rates for all recipients increased by four per cent as part of a package of measures to compensate for the impact of the introduction of the GST. Indexation provisions adjusted so that half of this increase was an advance on whatever rate increase occurred in March 2001, leaving an effective long-term increase of two per cent in the allowance rate. Income and asset test free areas applying to allowances increased by 2.5 per cent.


Value of a person's farm or business assets disregarded under family assets test increased from 50 per cent to 75 per cent.


Breach penalties for not attending an interview ceased to be activity test breach penalties and treated as administrative breach penalties.


Australians Working Together

Australians Working Together, a 2001–02 budget measure, provided:

  • $20.80 fortnightly supplement for those participating in approved language, literacy and numeracy training programs.
  • A Working Credit for those of workforce age on income support. Credits of up to $48 pf accumulated up to a total of $1000. Any income earned would reduce amount of credit accumulated each week on a dollar-for-dollar basis. In fortnights where earnings exceeded income test free area, accumulated credit would be reduced before any reduction was made to income support under income test.

Activity test breach penalties changed. Penalty period for a first activity test or administrative breach shortened if recipient complied with activity requirements. Penalty period reduced from 26 weeks to 8 weeks for an activity test breach penalty and from 13 weeks to 8 weeks for an administrative breach penalty. Reduced breach penalties not available if recipient failed to start a job as planned; declined job interview offer; became voluntarily unemployed; dismissed from employment for misconduct; knowingly or recklessly declared incorrect earnings from employment; or failed to submit a satisfactory jobseeker diary.


New Apprentices eligible for YA.


Welfare to Work

As a result of Welfare to Work, a 2005–06 budget measure:

  • New claimants for income support with disabilities who had a partial capacity to work were no longer eligible to apply for Disability Support Pension. If unemployed and applying for YA, they were required to seek suitable paid work of at least 15 hours per week.
  • New claimants for income support who were principal carers for children no longer eligible to apply for Parenting Payment if youngest child aged 6 years or older, if partnered, or 8 years or older if single. If unemployed and applying for YA, they were required to seek suitable paid work of at least 15 hours per week. Access to child care and reasonable travel times taken into account in determining suitability of work. Principal carers could be exempt from requirement to satisfy activity test if affected by domestic violence, had children with a disability or illness, had a large family, or were foster carers, home or distance educators.
  • YA recipients with a partial capacity to work or who were principal carers eligible for Pharmaceutical Allowance and a Pensioner Concession Card.
  • Very long-term unemployed people with a pattern of work avoidance could be required to undertake full-time Work for the Dole for 50 hours pf.
  • Penalties under the compliance regime changed so that an eight-week non-payment period imposed after three participation failures within 12 months. Each participation failure resulted in a non-payment period lasting until compliance occurred.
  • Income test for jobseekers changed. Income between $62 and $250 pf reduced payment by 50 cents for each dollar of income. Income over $250 per fortnight reduced payment by 60 cents for each dollar of income.
  • Income test for students and apprentices was changed. Income above $316 pf reduced payment by 60 cents for each dollar of income.
  • Debts resulting from knowingly incorrectly declaring earnings resulted in a one-off 10 per cent recovery fee rather than a fixed amount penalty.


Income management

Allowances could be subject to income management in the Northern Territory and Cape York. Income management involved diversion of 50 per cent of a recipient’s income support into an account that could only be drawn on to pay for priority needs, such as food, clothes and rent.


Non-resident parents with care of a child between 14 per cent and 34 per cent of nights per year paid at the ‘with child’ rate.


Employment Entry Payment for long-term unemployed recipients moving into full-time work abolished.



SEAM provisions commenced. Centrelink empowered to suspend for up to 13 weeks and then cancel income support payments if a recipient’s child does not comply with school enrolment or attendance requirements.


From April 2009 to March 2011, in recognition of the impact of the GFC, liquid assets maximum reserve doubled so that those with liquid assets of over $5000 if single, or $10 000 if partnered, were subject to waiting periods of from one to 13 weeks, depending on the amount they had.


Changes to compliance framework. A job seeker who, without reasonable excuse, failed to attend an activity, job interview or interview with their employment service provider, committed of a ‘connection failure’ and could be penalised the equivalent of one work day of their basic rate of payment. Intentional and persistent failure to comply with obligations considered a ‘serious failure’ resulting in an eight-week period of non-payment.

Definition of ‘member of a couple’ changed to include same-sex couples.

Access to YA removed for job seekers who had not completed Year 12 or equivalent and were not in full-time education or training.


Parental income test free threshold for dependent recipients aligned with income test free threshold for Family Tax Benefit Part A, representing a substantial increase. More generous taper arrangements introduced where there were two or more dependent YA recipients in a family.

Disadvantaged income support recipients able to receive payments weekly rather than fortnightly.


Strengthened criteria for independent status for those claiming to be self-supporting through employment.

Principal carers with school-aged children eligible for participation requirement exemptions in specified circumstances, such as those who experienced domestic violence or cared for four or more children.


Temporary doubling of liquid asset maximum reserve ceased.


Immediate suspension of payments for job seeker failing to attend a scheduled appointment or activity. Payment reinstated and back paid when job seeker attended rescheduled appointment or resumed required activity. Payment suspended for job seeker failing to attend rescheduled appointment or resume required activity without reasonable excuse until they did so, without back payment.


Clean Energy Advance paid to compensate those receiving allowances for the expected impact of the Carbon Tax.


Maximum age for a person not engaged in full-time study to receive YA raised from 20 to 21 years.

Taper rate for YA (Other) altered so that reductions in payment of 50 cents in the dollar would only occur on income over $143 pf (previous threshold $62).

Working Credit limit for YA (Other) increased from $1000 to $3500. Recipients who earn less than $48 in a fortnight earn one point of credit for the difference between their income and $48.

SEAM extended compelling recipients to attend conferences regarding their child’s attendance, and to comply with school attendance plan.

For copyright reasons some linked items are only available to members of Parliament.

© Commonwealth of Australia

In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.

To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.

Inquiries regarding the licence and any use of the publication are welcome to

This work has been prepared to support the work of the Australian Parliament using information available at the time of production. The views expressed do not reflect an official position of the Parliamentary Library, nor do they constitute professional legal opinion.

Feedback is welcome and may be provided to: Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library‘s Central Entry Point for referral.