Debt Options, Thresholds and 2026 Rules
Bankruptcy income contributions 2026: thresholds from 20 September and how they are assessed
How compulsory income contributions work in Australian bankruptcy, AFSA's income thresholds by dependants from 20 September 2026, what counts as income and how to vary an assessment.
While you are bankrupt in Australia, you must pay your trustee half of your assessed after-tax income above an income threshold that depends on how many dependants you have. For the period from 20 September 2026, AFSA lists a base threshold of $77,886.90 for a bankrupt with no dependants, rising to $91,906.54 with one dependant, $98,916.36 with two and $105,926.18 with more than four. If your assessed income stays under your threshold, you pay nothing. The trustee assesses each contribution year separately, so the amount can change if your income, job or household changes. AFSA re-indexes the thresholds on 20 March and 20 September; check its indexed amounts page for the figures that apply to your assessment period.
This guide is part of the overview of debt help options. Try the income contribution estimator with your own figures.
The thresholds from 20 September 2026
| Number of dependants | Actual income threshold (after tax) | Multiple of base threshold |
|---|---|---|
| 0 | $77,886.90 | 1.00 |
| 1 | $91,906.54 | 1.18 |
| 2 | $98,916.36 | 1.27 |
| 3 | $102,810.71 | 1.32 |
| 4 | $104,368.45 | 1.34 |
| More than 4 | $105,926.18 | 1.36 |
The thresholds are calculated from the base income threshold amount using fixed multiples. The figures for 3 and 4 dependants in this table are calculated from those multiples; confirm them with AFSA. For comparison, the base threshold for the period from 20 March 2026 was $75,475.40.
The formula
Illustrative example: you have one dependant and expect $100,000 of assessed income in a contribution year. $100,000 − $91,906.54 = $8,093.46. Half is $4,046.73 for the year, about $337 a month. Your trustee will usually set up regular payments.
More examples for different households are in income contribution worked examples.
What counts as assessed income
Assessed income is broader than take-home pay. The trustee generally includes:
- salary and wages after income tax, including overtime and bonuses,
- business income after tax,
- many government payments and pensions,
- the value of certain non-cash benefits, such as a car or accommodation provided by an employer,
- amounts salary-sacrificed into super above the compulsory level, and other amounts AFSA treats as income,
- income from investments, rent or trusts.
It can be reduced by some items, such as child support you pay under an assessment or order, and certain employment costs. The rules are in the Bankruptcy Act and AFSA's guidance; ask your trustee what is counted in your case.
Who counts as a dependant
A dependant is a person who lives with you and who is wholly or mainly dependent on you, such as a child or partner, and whose own income is below an amount AFSA sets. A partner on a good income does not count as a dependant. A child who lives with you only part of the time may or may not count; tell your trustee the arrangement.
How the assessment works
- Contribution assessment periods run year by year from the date of bankruptcy.
- At the start of each period your trustee asks for an estimate of your income, then issues an assessment.
- You make regular payments during the year.
- At the end of the period the trustee reviews actual income, and the assessment is adjusted up or down.
- Unpaid contributions can lead to an objection to discharge, extending the bankruptcy to 5 or 8 years.
If the contribution is unaffordable
You can ask the trustee for a hardship reduction if paying the assessed amount would cause hardship, for example because of medical costs for you or a dependant, high childcare costs, the cost of travelling to work, or rent much higher than usual for your area. Hardship applications have specific rules and evidence requirements. If you disagree with an assessment you can ask for a review, first by the trustee and then by AFSA.
Common mistakes
- Underestimating income at the start of the year, then facing a large catch-up bill when actual income is reviewed.
- Not reporting a pay rise or new job during the bankruptcy.
- Moving income to a partner or a company to avoid contributions: trustees look for this, and it can be treated as income or lead to an objection.
- Salary-sacrificing heavily into super to reduce income: amounts above the compulsory level can be counted.
- Assuming contributions stop when you stop paying: the debt to the trustee remains and can be recovered.
See debt help mistakes to avoid.
Income contributions compared with a debt agreement
In a debt agreement you agree the payments up front and they must fit AFSA's payment-to-income rules. In bankruptcy the payments are set by formula and depend on income above the threshold. For a household with income just above the threshold, bankruptcy contributions may be small; for higher incomes they may be larger than a debt agreement would require. Compare both in the decision checklist and the debt agreement thresholds guide.
Frequently asked questions
Do I pay contributions if I am on Centrelink?
Most people on income support payments have assessed income well below the threshold and pay nothing. Check with your trustee if you also have other income.
Does my partner's income count?
Your partner's own income is not your income and is not assessed. It can affect whether your partner counts as a dependant and can be relevant to a hardship application.
Do I still pay contributions after discharge?
No new contribution periods start after discharge, but contributions assessed for the bankruptcy that remain unpaid can still be recovered.
Sources
- Australian Financial Security Authority — income contributions, indexed amounts, hardship and reviews
- Federal Register of Legislation — Bankruptcy Act 1966 Part VI Division 4B
- National Debt Helpline — free help to work out your budget
- Moneysmart — bankruptcy information
