KEY HIGHLIGHTS
- Centrelink payments, medicine costs, and Medicare rules change from 1 January 2026
- Some households will see higher payments, cheaper PBS medicines, and more childcare support
- Overall impact depends on your benefits, healthcare use, and family situation
The new year isn’t just about fireworks and fresh starts. From 1 January 2026, a long list of money-related changes kick in across Australia, and some of them could directly affect your weekly budget.
We’re talking Centrelink payment increases, cheaper prescription medicines, Medicare Safety Net changes, childcare updates, and new cash rules. Some are helpful, some are neutral, and a few may catch people off guard.
Here’s a clear breakdown of what’s changing — and what it actually means for most Aussies.
| Area | What’s changing from January 2026 | Who it affects most |
|---|---|---|
| Centrelink | Selected payments increase due to indexation | Students, carers, young people |
| Medicare | Safety Net thresholds go up | Families with higher medical costs |
| PBS medicines | Co-payment drops to A$25 | Anyone buying prescription meds |
| Childcare | Minimum subsidised hours increased | Working families |
| Passports | Fees rise slightly | Adults renewing passports |
| Cash payments | Large retailers must accept cash (up to A$500) | In-store shoppers |
| Apprenticeships | Incentives reduced for non-priority trades | Apprentices & employers |
Centrelink payments going up
Several Centrelink payments will increase from 1 January due to indexation. These changes are automatic, so there’s nothing you need to apply for.
Youth Allowance and Austudy
For single recipients over 18 living away from home, the maximum basic rate increases by A$13.90 per fortnight, taking the payment to A$677.20.
Singles with children get a bigger bump — A$17.60 per fortnight, bringing payments up to A$854.20.
ABSTUDY
ABSTUDY recipients see some of the largest increases. Masters and Doctorate students will receive up to A$30.80 more per fortnight, with payments rising to A$1,316.20.
For singles under 21 living away from home with no dependents, payments will increase in line with Austudy rates.
Youth Disability Support Pension
The Youth Disability Support Pension for under-21s increases by up to A$17.20 per fortnight, reaching A$839.80 for those living independently or as part of a couple.
Carer Allowance
Carers receive a smaller but still welcome increase of A$3.30 per fortnight, lifting the payment to A$162.60.
The Department of Social Services has also updated income test limits from the same date.
Not every welfare payment is increasing
Important to know: not all government payments rise in January.
Payments like the Age Pension are indexed separately and usually increase on 20 March and 20 September each year. So if you don’t see a change in January, it doesn’t mean you’ve missed out — your increase may come later.
More than one million Australians will automatically receive the January increases without needing to do anything.
Medicare Safety Net thresholds increase
From 1 January 2026, the Medicare Safety Net thresholds are higher, meaning you’ll need to spend more out of pocket before extra rebates kick in.
The Original Medicare Safety Net threshold rises to A$594.40, up from A$576. Once you reach this amount in out-of-hospital medical costs, Medicare covers 100% of the schedule fee for the rest of the year.
The Extended Medicare Safety Net also increases:
- Concession card holders: A$861.20 (up from A$834.50)
- Non-concession card holders: A$2,699.10 (up from A$2,615.50)
After hitting this threshold, Medicare covers 80% of further out-of-pocket costs for eligible services. Full conditions are listed in the Medicare Benefits Schedule.
PBS medicine costs drop
This one’s simple and positive.
From 1 January, the PBS general patient co-payment drops to A$25, down from A$31.60. If you or your family rely on prescription medicines, this adds up over the year.
Concession card holders already pay less, so their costs remain unchanged.
Childcare subsidy changes
From 5 January 2026, eligible families will receive at least 72 hours of subsidised childcare per fortnight — roughly three days a week — regardless of how much they work.
Families meeting certain work requirements, such as 48 hours or more per fortnight, may qualify for 100 hours of subsidised care per child.
Eligibility rules and income tests are outlined by the Department of Education.
Passport fees increase slightly
If you’re planning overseas travel, expect to pay a bit more for your passport.
The cost of a 10-year adult Australian passport, currently A$412, will rise by around A$5–A$10 from 1 January. Final prices will be confirmed by the Australian Passport Office.
New cash payment rules
Cash isn’t disappearing just yet.
From January, major grocery stores and petrol stations must accept cash payments up to A$500 for in-person purchases between 7am and 9pm.
Small businesses with a turnover under A$10 million are exempt, so don’t be surprised if your local café stays card-only.
Apprenticeship incentive changes
Apprenticeship incentives are being reshaped, and not everyone benefits equally.
From 1 January:
- Key Apprenticeship Program trades (clean energy and housing) keep full support
- A$5,000 for employers
- A$10,000 for apprentices
- Other Priority List trades see incentives cut in half
- A$2,500 for employers
- A$2,500 for apprentices
- Trades outside the Priority List receive no incentives
Apprenticeships that started before 1 January 2026 will continue under the old rates.
Frequently Asked Questions
Do I need to apply for the Centrelink increases?
No. All payment increases from 1 January are applied automatically if you’re eligible.
Will cheaper PBS medicines apply to everyone?
Yes. The A$25 PBS co-payment applies to all general patients from 1 January.
Does the cash rule mean all shops must accept cash?
No. Only major grocery and petrol retailers must accept cash. Small businesses are exempt.
Join