A growing number of young Australians are calling for urgent reform to Centrelink’s Youth Allowance independence rules, arguing that outdated criteria are leaving students without adequate financial support amid the nation’s cost-of-living crisis. For students like 19-year-old Emily Barber, who lives independently while studying full-time, the rules mean reduced payments despite no financial help from parents.
Emily’s story has become a symbol of a wider problem faced by young people juggling study, rising rents, and a tight job market. Many find themselves classified as dependent on their parents—whose income is counted against their payment—even though they receive no actual assistance.
How the Rules Are Affecting Students
Under current Centrelink policy, most people under the age of 22 are deemed dependent unless they meet specific independence criteria. To qualify as independent, students must generally have worked a minimum number of hours over an 18-month period, have certain family or personal circumstances, be in a long-term relationship, or support a child.
For those like Emily who do not meet these criteria, parental income testing applies, which can dramatically reduce the Youth Allowance rate. Even students who have moved out, pay their own rent, and manage all their own expenses are still considered dependent until they turn 22, unless they meet the narrow exemption conditions.
Emily says that her Youth Allowance, currently up to $663 per fortnight, will drop by about $150. After paying for rent, utilities, groceries, and transport, she is left with little money to cover other essentials. She has applied for dozens of part-time jobs without success and fears she will soon be forced to move back home—over an hour away from her university campus.
“I live independently, I pay all my own bills, and my parents don’t give me a cent,” she explains. “But Centrelink still counts their income against me as if they were supporting me, which they aren’t. It doesn’t make sense.”
Why Young People Are Calling for Change
The issue is not isolated to Emily. Thousands of young Australians have voiced similar frustrations, arguing that the current Youth Allowance independence rules reflect outdated assumptions about family support. Student organisations and advocacy groups maintain that the system was designed in a time when young adults were more likely to live at home or work in stable part-time jobs.
The National Union of Students (NUS) has renewed its campaign to lower the age of independence from 22 to 18, arguing that the current policy forces many students into financial hardship. The Union’s president has stated that policymakers should recognise that young people are becoming financially independent much earlier than before, particularly in cities where rental costs and study expenses are substantial.
High youth unemployment and underemployment compound the issue. Many students struggle to meet the work-hour requirements necessary to qualify as “independent” because casual hours are unpredictable or unavailable.
Declining Access to Youth Allowance
Recent data reveals a significant drop in the number of students accessing Youth Allowance. In mid-2025, around 275,000 students received the payment, but by May the figure had fallen to approximately 162,000. Advocates interpret this as evidence that growing numbers of students are being excluded by income tests and restrictive independence criteria.
The 2024 Australian University Accord also addressed the issue, recommending that the government reassess both the age of independence and the parental income thresholds used to determine eligibility. The report warns that continuing the current approach risks excluding the very groups the payment was created to support.
Government Response and Current Policy
The Department of Social Services maintains that the current system ensures taxpayer-funded payments go to those most in need. Officials argue that parental means testing helps target support effectively. However, a review of the rules remains under consideration as rising living costs and rental pressures stretch student budgets nationwide.
Centrelink’s official policy outlines that students are considered dependent until age 22, except in cases where independence can be established through:
- Employment history (working a required amount over 18 months).
- Long-term personal circumstances (care responsibilities, estrangement, or other specific conditions).
- Maintaining a child or living with a partner.
Critics argue these rules fail to reflect the reality for many modern students, especially those living out of home or facing high financial stress.
The Broader Cost-of-Living Challenge
The living cost gap for young people has widened over the past few years. Rent, food, and utilities have climbed steeply, while the value of Youth Allowance payments has not kept pace. Rent prices for students in major cities now often consume more than 50 percent of their total income.
These pressures create difficult choices. Some students take on excessive work hours to afford basic living costs, which can undermine academic performance. Others move further away from campuses or drop out altogether.
Advocates warn that the Youth Allowance system risks becoming inaccessible to those who need it most unless structural changes are made soon. Lowering the age of independence, they argue, would recognise the growing financial responsibility young Australians already carry.
Proposed Reforms Under Discussion
Calls for reform continue to grow across the education sector. Key proposals include:
- Lowering the independence age to 18, aligning with adult legal status.
- Revising parental income tests to better reflect modern family dynamics.
- Simplifying work-hour criteria to account for casual and short-term employment patterns.
- Reassessing support rates to keep pace with real living expenses.
The government has yet to commit to any immediate changes but has acknowledged that updating independence criteria is “an area under discussion” within the broader social services review.
Looking Ahead
For students like Emily, policy discussions bring little short-term comfort. Without reform, many in similar positions may continue to face reduced Youth Allowance payments simply because of their age, not their actual independence.
As Australia’s cost-of-living crisis persists, the pressure for reform grows stronger. Student advocacy groups are planning renewed campaigns in early 2026 aimed at ensuring independence criteria reflect economic reality rather than old assumptions about family support. Until then, young Australians living and studying on tight budgets may continue to feel the squeeze.
FAQs
1. Why are students calling for change to Youth Allowance rules?
They believe Centrelink’s age and dependency rules are outdated and don’t reflect modern financial realities for independent young people.
2. At what age are young people considered independent for Youth Allowance?
Currently, most people are considered dependent until age 22 unless they meet specific independence criteria.
3. How does the current rule affect payments?
If classified as dependent, parental income reduces the Youth Allowance amount even when parents provide no financial support.
4. What reforms are being proposed?
Student groups are urging the government to lower the independence age to 18 and review parental income testing thresholds.
5. Has the government confirmed changes?
No formal policy adjustment has been announced, but reviews and discussions on reform are ongoing.