My income or employment has changed (or may change)

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How to update your income or employment details

One of your obligations when bankrupt is to keep your trustee informed of any changes in your income or employment.

For example, if you:

  • change jobs
  • receive higher or lower income (including government assistance)
  • stop working.

There is no limit to the amount of income you can earn while you're bankrupt. There is also no limit to the amount you can save during your bankruptcy.

However, if your after-tax income goes above a set amount, you may need to make compulsory payments (or income contributions). This amount changes with how many dependants you have.

Next step:

If your trustee is the Official Trustee (AFSA) update us now.

When you update your income, your trustee may request further information if they believe your income exceeds the set amount. If you trustee is the Official Trustee (AFSA), they may send you a statement of income form to complete.

What are contributions?

If your trustee determines you are earning over the income set amount, they'll ask you to make compulsory payments (also called income contributions). The amount you may need to pay depends on your income and how many dependants you have. Your trustee can use these contributions to help repay your debts.

If you do need to make compulsory payments, they are 50% of the amount you earn above the income threshold.

Your trustee will tell you how and when you need to make payments. If you have any questions about these payments, contact your trustee.

For more information see: Official Trustee Practice Statement 1 - Income contributions.

What is a dependant?

We classify a dependant as someone who meets all of the following criteria:

Income contributions calculator

Use our income contributions calculator to estimate the annual contribution you may need to pay during bankruptcy.

Case study: Simon

Earning income during bankruptcy

Simon is a 45-year-old single father of two young children. He lives in Melbourne, Victoria.

Two years ago, Simon lost his teaching job and found himself unable to pay his debts. He went bankrupt six months later.

Recently, Simon was offered a position at a school. He accepted the job, and now earns $91,000 (after tax) a year.

Simon let his trustee know about his new job, as he knew that he needed to report all changes in employment and income.

The trustee told Simon that because he is now earning above the income threshold*, he needs to make income contributions.

From his fortnightly after-tax pay of about $3,590, Simon’s compulsory income contributions are around $115.46 per fortnight (based on the September 2023 income thresholds).

*The income thresholds change twice a year, and are different depending on how many dependants you have. You can find the latest thresholds at Indexed Amounts.

*These case studies do not constitute legal or financial advice. You should consider whether the options referred to in the case studies are appropriate for you, and seek advice if necessary, before taking any action.

COVID-19 response packages

How payments from the Coronavirus Economic Response Package affect people in bankruptcy

Economic support payments - are not claimable by your bankruptcy trustee as income or as an asset, regardless of whether you receive the payments before or after the date of bankruptcy.

COVID-19 supplement payments - are claimable by the trustee if you receive them before the date of bankruptcy and it remains in your bank account when you become bankrupt. During bankruptcy these payments are included in your after-tax income amount. If your after-tax income exceeds a set amount, you may have to make compulsory payments

More information about these types of payment are available at Services Australia.

Early access to superannuation -  Should you receive payments from your superannuation under the Coronavirus Economic Response Package, there is no change to the way this payment is treated in bankruptcy. See Is my superannuation affected? for details on what happens to your super during bankruptcy.

The Australian Taxation Office has more information about super payments on their website at Early access to your super.