What's the PPL income test?

To get PPL you must pass EITHER the individual income test (your own adjusted taxable income ≤ $180,007 for the reference FY) OR the family income test (combined ATI ≤ $373,094). Single parents only face the individual test. Partnered claimants pass if either threshold is met — designed so a high-earning individual in a low family-income household doesn't lose PPL, and vice-versa.

What counts toward "adjusted taxable income"?

Taxable income (after deductions), plus reportable fringe benefits, plus reportable super contributions (salary sacrifice + personal deductible contributions), plus net investment losses, plus tax-free pensions/benefits, plus net foreign income, minus child support paid. NOT the same as your gross salary — it's a specific Centrelink construct designed to capture real spending capacity.

What if my income is between $180,007 and $373,094?

As a single, you fail the individual test and there's no family test — you're not eligible. As a partnered claimant, you fail the individual test but if your partner earns less than $193,087 (so combined ≤ $373,094), the family test passes and you're eligible. The family test is the safety net for higher-earning individuals in moderate-income households.

Are the income thresholds going up?

They're indexed annually with CPI on 1 July. The figures $180,007 and $373,094 are confirmed for the FY24-25 reference year. FY25-26 and FY26-27 figures get published by DSS shortly before 1 July each year. If your claim's reference FY is FY25-26 or later, check Services Australia for the indexed cap.

Can I reduce my ATI to pass the income test?

Reducing ATI requires substantive actions — additional concessional super contributions, deductible expenses, child support paid (which already deducts from ATI). It's not a quick fix; salary-sacrificed super takes time to set up via your employer. The cleanest "reduce ATI" lever is to claim PPL with a pre-birth lodgement date that pushes the reference FY back one year if your earlier FY had lower income.

The PPL income test — $180,007 vs $373,094 explained

Q: Which FY's income gets tested?

The financial year that ENDED before the EARLIER of your claim date or your child's date of birth/placement. For a pre-birth claim (3 months before due date) the reference FY is often two FYs before the birth FY — older income that may be lower than your current earning.

PPL has TWO income tests, not one — individual ($180,007) and family ($373,094). You pass if EITHER is satisfied. The trick is which FY's income gets tested and how the two thresholds interact for higher-earning partnered couples.

The PPL income test isn't one threshold — it's two, and the rules around which one applies (and which FY's income gets tested) make this one of the most operationally confusing parts of PPL eligibility. This guide walks through both tests, how they interact, and how to plan around them.

The two thresholds

For the FY24-25 reference year (the most recently confirmed figures):

Test	Cap	Who passes
Individual income test	$180,007	The claimant's own ATI ≤ this figure
Family income test	$373,094	Combined (claimant + partner) ATI ≤ this figure

You pass PPL if EITHER test is satisfied. This is important — it's an OR, not an AND.

Singles only face the individual test — there's no family income to combine. So a single claimant with ATI of $200,000 fails outright.

Partnered claimants get both tests — if your individual income is over $180,007 BUT the family combined is at or below $373,094, you still qualify under the family test. The threshold is designed so a high-earner with a low-earning or non-working partner doesn't lose PPL.

Worked examples

Example 1: single earner

Single claimant, $165,000 ATI
Individual test: $165,000 ≤ $180,007 → PASS
No family test (single)
Eligible

Example 2: partnered, claimant higher

Claimant ATI $195,000, partner ATI $80,000
Individual test: $195,000 > $180,007 → fail
Family test: $195,000 + $80,000 = $275,000 ≤ $373,094 → PASS
Eligible (via family test)

Example 3: partnered, both high

Claimant ATI $195,000, partner ATI $220,000
Individual test: $195,000 > $180,007 → fail
Family test: $195,000 + $220,000 = $415,000 > $373,094 → fail
Not eligible

Example 4: partnered, claimant lower

Claimant ATI $90,000, partner ATI $290,000
Individual test: $90,000 ≤ $180,007 → PASS
Family test not relevant (individual already passes)
Eligible (via individual test — partner income doesn't matter when claimant is under the individual cap)

Example 4 is the most useful planning insight: if the lower-earning parent claims, partner income mostly doesn't matter. Default-primary-claimant practice is the birth mother for biological births — and if she's the lower earner, her individual test usually passes regardless of partner income.

The reference year — when does income get tested?

The reference year is the financial year that ENDED before the EARLIER of your claim date or the child's date of birth/placement.

This sounds technical but matters in practice:

Baby born August 2026, claim lodged at birth → earlier date is August 2026 → reference FY is FY2025-26 (ended 30 June 2026)
Baby due August 2026, claim lodged May 2026 (pre-birth) → earlier date is May 2026 → reference FY is FY2024-25 (ended 30 June 2025)

The difference between these two reference FYs can be 12+ months of income changes. If you got a promotion in FY25-26 that pushed you over the $180,007 cap, claiming pre-birth (and using FY24-25 income) might pass the test where a same-day-as-birth claim would fail.

This is rarely a deliberate optimisation but worth knowing if you're near the cap.

What counts as "adjusted taxable income"

ATI is Centrelink's measure of real earning capacity. It's:

Taxable income (the figure on your notice of assessment) — gross income minus deductions
+ Reportable fringe benefits amount (e.g. salary packaging, car novation)
+ Reportable super contributions (salary sacrifice + personal deductible contributions)
+ Net investment losses (rental loss, share loss added back — the formula treats them as deemed income)
+ Tax-free government pensions / benefits (DVA payments etc.)
+ Net foreign income (overseas earnings not in Australian taxable)
− Child support paid (deducted)

NOT included: GST refunds, fully-franked dividend franking credits (the gross-up is already in taxable income), inheritance.

Salary packaging through your employer often adds significantly to ATI — many high-earners forget this and assume their "salary" is their ATI. A $170,000 salary with $20,000 of car novation produces ATI ~$190,000, failing the individual cap when the salary alone would pass it.

See the Adjusted Taxable Income guide for a full breakdown.

Reducing ATI before claim

Substantive levers (most take months of planning):

Additional concessional super contributions — boost salary sacrifice or make personal deductible contributions. Cap of $30,000/year (FY25-26) including employer SG. Reduces taxable income directly but ADDS to ATI under "reportable super contributions" — net effect depends on how much you contribute and the marginal rate.
Maximise deductible expenses — work-related deductions, home-office costs, depreciation on assets. Reduces taxable income before ATI calculation.
Negative gearing — net investment losses (rental, shares) reduce taxable income but get added back as "net investment losses" in ATI. Generally a wash.
Defer a bonus — if your employer offers a deferred bonus, push it to a future FY outside the reference window. Coordinate with the Pre-Birth Money Map's income-optimisation card.

The cleanest lever for many parents is just lodging the claim early to use a lower-income earlier FY. See When can I claim PPL?.

Verification status of the figures

The thresholds we quote ($180,007 / $373,094) are confirmed for the FY24-25 reference year — Services Australia's page "Meeting the income test for Parental Leave Pay" (last updated 31 March 2026) quotes them in worked examples.

For FY25-26 and FY26-27, the 1 July indexation amounts get published by DSS shortly before the indexation date. NestWise's rates engine carries these forward as "latest published, pending official confirmation" and flags them in the verification dashboard. The PPL planner shows the current indexation status when you compute a result.

How NestWise helps

PPL planner — full income test with both individual AND family checks, against your saved ATI for the correct reference FY
Free PPL playground — rough income test for an unauthenticated quick-check
PPL Year Income Estimator (paid) — models your PPL-year income mix and shows how the test outcome shifts if you delay or accelerate the claim

Run the income test on your numbers →