In short

A Stolen Generations redress payment is not counted as income for the Age Pension and is not taxed. But once you hold the money it counts under the assets test, and savings are deemed to earn income. From 1 October 2026, payments from six Stolen Generations schemes are exempt from the residential aged care means assessment, but you need to ask for it.

This article discusses redress for Stolen Generations survivors. If it brings up distress, the Territories Stolen Generations Redress Scheme and the WA Scheme both list free Scheme Support Services that can help, at no cost to you [2][9].

Many Stolen Generations survivors are now of Age Pension age, and a common worry is whether a redress payment will cut their pension. The short answer: the payment is not counted as income and is not taxed, but once the money is in your bank it counts under the assets test and is deemed to earn income. From 1 October 2026 there is also a new rule for aged care. Redress payments no longer count in the residential aged care means test [6][7].

The schemes

Territories Stolen Generations Redress Scheme. This is the Commonwealth scheme. It is for Aboriginal and Torres Strait Islander people who were removed from family or community as children in the Northern Territory before 1 July 1978, the ACT before 11 May 1989, or the Jervis Bay Territory [2][3]. It pays a redress payment of up to $75,000 and a healing assistance payment of $7,000 [1][2]. If you already received a payment for your removal, for example from a state scheme or a legal settlement, that amount is deducted from the $75,000. You still get the $7,000 [2]. Applications close on 31 August 2027 [1][2].

WA Stolen Generations Redress Scheme. This scheme pays $85,000 to Aboriginal people removed from their families as children in Western Australia before 1 July 1972. Families can also apply on behalf of a relative who died on or after 27 May 2025 [9]. More than 3,000 people have applied since it opened in November 2025 [9].

State schemes in NSW, South Australia, Victoria and Tasmania have also made payments to survivors [6].

The Age Pension rules in four points

1. The payment is not income. The Social Security Act lists Territories Scheme payments as something that is not income (section 8(8)(jd)) [4]. Services Australia confirms it will not count the payment as income or as compensation [1]. NSW payments, including the $7,000 Funeral Assistance Fund payment, are declared "exempt lump sums" under a separate DSS determination [5].

2. Once you hold it, it is an asset. This is where the common belief that redress "doesn't affect Centrelink" goes wrong. Services Australia says it "will assess any ongoing income generated by the lump sum and/or any asset produced under the assets test" [1]. The Scheme itself says payments "may affect assets tests" [2]. Money in a bank account, a term deposit, or a car bought with the payment all count.

3. Deeming applies. Deeming is Centrelink's way of assuming your savings earn a set rate of income, whatever they actually earn. From 20 September 2026 the rates are 1.75% on the first $66,800 of a single person's financial assets ($110,600 for a couple combined) and 3.75% above that [14].

4. It is not taxed. Territories Scheme payments are exempt from income tax [2][4]. They are also protected if you become bankrupt [4].

Worked examples

Illustrative only, using FY2026-27 figures. Not personal advice.

Both examples are single homeowners who receive the full Territories payment of $82,000 ($75,000 plus $7,000). The maximum single pension is $1,237.70 a fortnight [13]. The single income free area is $226 a fortnight [12], and the full-pension assets limit for a single homeowner is $333,000 [11].

Example 1: Doris, modest savings. Doris has $40,000 in the bank and $30,000 in a car and contents. After the payment she has $122,000 in the bank. Her deemed income is $66,800 × 1.75% + $55,200 × 3.75% = $3,239 a year, or $124.58 a fortnight. That is under $226, so the income test does not touch her pension. Her total assets of $152,000 are well under $333,000. Her pension stays at $1,237.70.

Example 2: Ron, closer to the limit. Ron has $250,000 in financial assets and $50,000 in other assets, $300,000 in total.

BeforeAfter the $82,000
Financial assets$250,000$332,000
Deemed income, per fortnight$309.19$427.46
Pension under the income test$1,196.10$1,136.97
Total assets$300,000$382,000
Pension under the assets test$1,237.70$1,090.70
Pension paid (the lower result)$1,196.10$1,090.70

Under the income test, each dollar over $226 a fortnight cuts the pension by 50 cents [12]. Under the assets test, each $1,000 over the limit cuts it by $3 a fortnight [16]. Ron is $49,000 over, so he loses $147. His pension falls by $105.40 a fortnight while he holds the money. If he spends some of it on everyday living costs or on his home (which is not counted), his pension rises again once he updates Centrelink.

The aged care change from 1 October 2026

From 1 October 2026, Stolen Generations redress payments are exempt from the residential aged care means assessment [6][7]. That assessment decides how much you contribute to your fees and accommodation in an aged care home. The exemption covers six schemes [6]:

  • Territories Stolen Generations Redress Scheme
  • WA Stolen Generations Redress Scheme
  • Stolen Generations Reparations Package of Victoria
  • NSW Stolen Generations Reparations Scheme
  • Stolen Generations Reparations Scheme of South Australia
  • Tasmanian Government Stolen Generations of Aboriginal Children ex gratia payments

Four points to know:

  • It covers people already in care, not just new residents. The payment is excluded from the date it was made, which may lower fees you are already paying [6].
  • It covers partners. It applies to any aged care resident whose partner received a redress payment [7].
  • You have to ask. It is not automatic. Contact Services Australia's Aged Care line on 1800 227 475, visit a service centre, or contact the Department of Veterans' Affairs (DVA) if you get a DVA payment [7].
  • It does not change your Age Pension. The exemption applies to the aged care means assessment only. The money is still counted under the Age Pension assets test and deemed [1][6]. The published exemption also covers residential care only. It does not mention Support at Home (home care) contributions [6][7].

Before this change, redress money kept as savings was counted as an asset in aged care, and sometimes deemed as income, which raised costs for some survivors and their partners [8]. National Redress Scheme payments (for institutional child sexual abuse) have had the same aged care exemption since 1 January 2025 [6]. Our article on National Redress Scheme payments covers that scheme.

Sharing the money with family

Many survivors share their payment with children, grandchildren or community. Centrelink's gifting rules still apply. You can give away up to $10,000 a financial year, and no more than $30,000 over five financial years, without it affecting your pension. Anything over those limits is still counted as your asset for five years from the date of the gift [15]. The Territories Scheme asks you to tell Centrelink if you give any of the payment away [2]. The WA Government notes the rules are "complex ... especially for tax, aged care, and what happens if you give some of your payment to another person" [10]. Our article on gifting and deprivation rules has worked examples.

What this means for you

Some questions survivors and families may wish to consider:

  • Have you told Services Australia (or DVA) that the payment came from a redress scheme, so your records show where the money came from?
  • Are your total assets close to the assets test limit? If so, the payment may reduce your pension while you hold it, as in Ron's example.
  • If you, or your partner, live in an aged care home, have you asked for the payment to be excluded from your means assessment?
  • If you plan to share the money, does the amount fit within the gifting limits?
  • Would keeping the payment in its own account help you show its source later?

Where to go next

  • Territories Stolen Generations Redress Scheme: eligibility, applications and free Scheme Support Services [2].
  • WA Stolen Generations Redress Scheme: WA Government, Department of the Premier and Cabinet [9].
  • Services Australia: to update your assets, or the Aged Care line (1800 227 475) to ask about the aged care exemption [7].
  • A licensed financial adviser: for advice on holding or using the money alongside your pension. Our articles on the Age Pension income test, deeming rates and the aged care means-tested care fee explain the underlying rules.

Sources

Key takeaways

  • Territories Stolen Generations Redress Scheme payments (up to $75,000 plus a $7,000 healing payment) are not income under the Social Security Act and are not taxed.
  • Once you hold the money it counts under the Age Pension assets test and is deemed at 1.75%/3.75% (from 20 September 2026).
  • A full pensioner with modest savings may see no change; in our example, a single homeowner nearer the assets limit loses $105.40 a fortnight while holding the money.
  • From 1 October 2026, payments from six Stolen Generations schemes are exempt from the residential aged care means assessment, backdated to the date paid, for residents and partners. You have to ask.
  • The aged care exemption does not change the Age Pension assessment, and gifting limits ($10,000 a year, $30,000 over five years) still apply if you share the money.

Frequently asked questions

Does a Stolen Generations redress payment affect the Age Pension?

The payment itself is not counted as income, so it does not reduce your pension when it arrives. But once you hold the money it counts under the assets test, and savings or investments are deemed to earn income, which can reduce your pension if you are near the limits.

Is a Stolen Generations redress payment taxed?

No. Territories Stolen Generations Redress Scheme payments are exempt from income tax, and the Scheme says you do not need to pay tax on them.

Do redress payments count in the aged care means test?

Not from 1 October 2026. Payments from the Territories, WA, NSW, Victorian, South Australian and Tasmanian Stolen Generations schemes are exempt from the residential aged care means assessment, for new and existing residents and for residents whose partner received a payment. You need to ask Services Australia (Aged Care line 1800 227 475) or DVA to apply it.

Does the aged care exemption cover home care?

The published exemption covers the residential aged care means assessment. It does not mention Support at Home contributions.

Can I give some of my redress payment to family?

Yes, but Centrelink's gifting rules apply. Gifts over $10,000 in a financial year, or $30,000 over five financial years, are still counted as your asset for five years. The Territories Scheme asks you to tell Centrelink if you give any of the payment away.

When does the Territories Stolen Generations Redress Scheme close?

Applications are open until 31 August 2027.

A note on advice. This article is general information only and doesn't account for your personal circumstances. Everyone's situation is different — before acting, it's worth talking it through with a licensed adviser who knows your full picture.