Your income and bankruptcy – essential facts

Bankruptcy is designed to protect your income to ensure you can still meet your essential needs. How much income you can keep depends on how many dependants you have.

The amount of income you can keep each year, in after-tax dollars is:

Threshold Amount
No Dependants $55,837.60
1 Dependants $65,888.37
2 Dependants $70,913.25
3 Dependants $73,705.63
4 Dependants $74,822.38
Over 4 Dependants $75,939.14

A dependant is someone who lives with you, who does not earn more than $3,539 per year before tax (no tax payable at this level of income).

A husband and wife can each claim all their children as dependants. A separated couple can each claim their children as dependants if they have joint custody and they each have a bedroom allocated for the child.

The ‘threshold amount’ is adjusted twice a year, on 20 March and 20 September.

The ‘threshold amount’ is increased by amounts paid through the Child Support Agency for the support of children from a previous relationship.

For any amount you earn that is more than your ‘threshold amount’ in after-tax dollars, you keep half and the other half is paid to your bankrupt estate.

More information about income during bankruptcy is available on this website, or by calling Alan Nicholls on 1300 060 122.

Alan Nicholls’ no obligation help desk

Nicholls & Co provide a free, no obligation ‘help desk’ for people considering bankruptcy – we discuss and explain bankruptcy and answer questions for anyone who is considering bankruptcy. The Nicholls & Co help desk can be accessed by phone (1300 060 122) or helpdesk@nichollsco.com.au . Alan Nicholls, Registered Trustee in Bankruptcy is also available to answer your questions to enable you to decide if bankruptcy is right for you.