The assets test

The assets test is the second means test, and it works differently from the income test. The income test reduces your payment gradually. The assets test, for Parenting Payment, is a hard limit: if your assessable assets are above the applicable limit, the payment is nil, not merely reduced. Services Australia applies both tests and pays you on the test that gives the lower result, so passing the income test does not help if you fail the assets test, and the reverse is also true.

Hard asset limits, from 1 July 2026

These limits are updated on 1 July each year, not on the March and September cycle used for payment rates, which is a common source of confusion. A single homeowner with $340,000 in assessable assets is above the limit and receives nil, while a single non-homeowner with the same $340,000 is well under the $600,000 limit and can still be paid, subject to the income test. The higher non-homeowner limit recognises that a renter has no home equity to fall back on and will need savings for housing costs. For a couple, assets are combined, so one partner's savings and the other partner's savings are added together before the limit is applied.

What counts, and what does not

Assessable assets include bank accounts, shares, managed funds, investment properties, vehicles above certain values, business assets, superannuation in some circumstances, and debts owed to you. Assets held overseas count as well. Your principal home is exempt, as is the land it stands on up to a reasonable area, and most ordinary household contents and personal effects are not counted in the way a bank balance is. A holiday home, a rental property, a caravan kept as an investment, or a second car held for value are not exempt merely because they are not cash. If you have given away assets, gifting rules can also apply, and Services Australia may still count a gifted asset for a period. Disposing of assets shortly before claiming, in the hope of passing the test, is therefore not a reliable strategy and can be treated as deprivation.

Deeming: income assumed from financial assets

Financial assets, such as bank deposits, shares and managed funds, do not only count for the assets test. They also produce deemed income for the income test. Deeming assumes a set rate of return, whether or not you actually earn that return, so a low-interest bank account and a high-performing fund with the same balance are deemed to earn the same income. From 20 September 2026, the deeming thresholds are $66,800 for a single person and $110,600 for a couple combined in the pension-partner case, with a lower rate of 1.75 per cent applied up to the threshold and 3.75 per cent applied above it. For a partnered couple where neither partner receives a pension, the threshold is applied per person, so the calculation differs and Services Australia works it out on your combined figures. Deeming is one reason a family with large savings can see a payment reduction under the income test even before the assets test is reached.

Practical points

Report assets honestly and update them when they change materially, for example after selling a property, receiving an inheritance, or paying off a large debt. A payment that was correct when assets were low becomes incorrect if a lump sum arrives and is not reported. Conversely, if assets fall because you have genuinely spent them on living costs, a house deposit for your principal home, or a car you need, the test should be reapplied on the new position. Keep records of major transactions, because Services Australia can ask how a balance changed. Asset hardship provisions exist for a person in severe financial hardship whose payment is nil only because of an asset that cannot reasonably be sold or borrowed against, but they are an exception, not a general alternative to the limits above.