The Austroads pavement design guide is currently used in New Zealand for pavement design. It includes a design criterion for the subgrade limiting the subgrade strain value. In the last few years a significant number of early granular pavement failures on high-volume roads have occurred. Investigations into these failed pavements found that most of the surface rutting was from deformation of the granular layers with little or no visible contribution from the subgrade. Therefore, the Austroads design criterion for the subgrade is adequate in terms of providing enough pavement depth to protect the underlying subgrade soil but does not prevent failure in the granular layers. In a parallel research project on rut depth prediction for granular pavements (Arnold and Werkmeister 2010) a range of pavement lives was determined using models derived from repeated load triaxial (RLT) tests. These predictions were applied in this project to validate a simple method for obtaining a design strain criterion for basecourse and subbase aggregates from RLT tests and for use in CIRCLY to predict pavement life.