Means testing is the way in which the Commonwealth Government limits benefit payments made through Centrelink. Essentially, the Commonwealth assesses whether a person has the economic ability (‘means’) to provide for themselves, rather than receiving a social security payment.
There are two main tests. The assets test assesses a potential recipient’s level of assets. If the total assets are below a minimum threshold, then the person will receive the full benefit to which they are entitled. As the level of assets rises above this threshold, the amount of benefit that is payable is reduced proportionately. Once assets rise above a second threshold, no benefit is payable at all.
Not all assets are included within the assets assessed. Most significantly, the family home is not assessed as an asset for these purposes.
The income test assesses other income that a potential recipient is receiving. Again, there is a minimum threshold of other income, below which the mount of Centrelink benefit payable is not affected. Once the other income reaches this threshold, the amount of benefit payable is reduced proportionately. Once again, once a second threshold of other income is reached, no benefit is payable at all.