diff --git a/libraries/AP_NavEKF2/AP_NavEKF2_MagFusion.cpp b/libraries/AP_NavEKF2/AP_NavEKF2_MagFusion.cpp
index a61fa099d3..cc31369690 100644
--- a/libraries/AP_NavEKF2/AP_NavEKF2_MagFusion.cpp
+++ b/libraries/AP_NavEKF2/AP_NavEKF2_MagFusion.cpp
@@ -149,8 +149,8 @@ void NavEKF2_core::SelectMagFusion()
         // If we haven't performed the first airborne magnetic field update or have inhibited magnetic field learning, then we use the simple method of declination to maintain heading
         if(inhibitMagStates) {
             fuseCompass();
-            magHealth = true;
-            magTimeout = false;
+            // zero the test ratio output from the inactive 3-axis magneteometer fusion
+            magTestRatio.zero();
         } else {
             // if we are not doing aiding with earth relative observations (eg GPS) then the declination is
             // maintained by fusing declination as a synthesised observation
@@ -163,6 +163,8 @@ void NavEKF2_core::SelectMagFusion()
                 FuseMagnetometer();
                 hal.util->perf_end(_perf_test[0]);
             }
+            // zero the test ratio output from the inactive simple magnetometer yaw fusion
+            yawTestRatio = 0.0f;
         }
     }
 
@@ -652,6 +654,21 @@ void NavEKF2_core::fuseCompass()
         innovation = -0.5f;
     }
 
+    // calculate the innovation test ratio
+    yawTestRatio = sq(innovation) / (sq(frontend._magInnovGate) * varInnov);
+
+    // Declare the magnetometer unhealthy if the innovation test fails
+    if (yawTestRatio > 1.0f) {
+        magHealth = false;
+        // On the ground a large innovation could be due to large initial gyro bias or magnetic interference from nearby objects
+        // If we are flying, then it is more likely due to a magnetometer fault and we should not fuse the data
+        if (inFlight) {
+            return;
+        }
+    } else {
+        magHealth = true;
+    }
+
     // correct the state vector
     stateStruct.angErr.zero();
     for (uint8_t i=0; i<=stateIndexLim; i++) {
diff --git a/libraries/AP_NavEKF2/AP_NavEKF2_Outputs.cpp b/libraries/AP_NavEKF2/AP_NavEKF2_Outputs.cpp
index bc6e2a5380..ed61bf9f4a 100644
--- a/libraries/AP_NavEKF2/AP_NavEKF2_Outputs.cpp
+++ b/libraries/AP_NavEKF2/AP_NavEKF2_Outputs.cpp
@@ -343,9 +343,10 @@ void  NavEKF2_core::getVariances(float &velVar, float &posVar, float &hgtVar, Ve
     velVar   = sqrtf(velTestRatio);
     posVar   = sqrtf(posTestRatio);
     hgtVar   = sqrtf(hgtTestRatio);
-    magVar.x = sqrtf(magTestRatio.x);
-    magVar.y = sqrtf(magTestRatio.y);
-    magVar.z = sqrtf(magTestRatio.z);
+    // If we are using simple compass yaw fusion, populate all three components with the yaw test ratio to provide an equivalent output
+    magVar.x = sqrtf(max(magTestRatio.x,yawTestRatio));
+    magVar.y = sqrtf(max(magTestRatio.y,yawTestRatio));
+    magVar.z = sqrtf(max(magTestRatio.z,yawTestRatio));
     tasVar   = sqrtf(tasTestRatio);
     offset   = posResetNE;
 }
diff --git a/libraries/AP_NavEKF2/AP_NavEKF2_VehicleStatus.cpp b/libraries/AP_NavEKF2/AP_NavEKF2_VehicleStatus.cpp
index d509cf8335..8196094824 100644
--- a/libraries/AP_NavEKF2/AP_NavEKF2_VehicleStatus.cpp
+++ b/libraries/AP_NavEKF2/AP_NavEKF2_VehicleStatus.cpp
@@ -81,7 +81,7 @@ bool NavEKF2_core::calcGpsGoodToAlign(void)
 
     // If we have good magnetometer consistency and bad innovations for longer than 5 seconds then we reset heading and field states
     // This enables us to handle large changes to the external magnetic field environment that occur before arming
-    if ((magTestRatio.x <= 1.0f && magTestRatio.y <= 1.0f) || !consistentMagData) {
+    if ((magTestRatio.x <= 1.0f && magTestRatio.y <= 1.0f && yawTestRatio <= 1.0f) || !consistentMagData) {
         magYawResetTimer_ms = imuSampleTime_ms;
     }
     if (imuSampleTime_ms - magYawResetTimer_ms > 5000) {
@@ -96,7 +96,7 @@ bool NavEKF2_core::calcGpsGoodToAlign(void)
     // fail if magnetometer innovations are outside limits indicating bad yaw
     // with bad yaw we are unable to use GPS
     bool yawFail;
-    if ((magTestRatio.x > 1.0f || magTestRatio.y > 1.0f) && (frontend._gpsCheck & MASK_GPS_YAW_ERR)) {
+    if ((magTestRatio.x > 1.0f || magTestRatio.y > 1.0f || yawTestRatio > 1.0f) && (frontend._gpsCheck & MASK_GPS_YAW_ERR)) {
         yawFail = true;
     } else {
         yawFail = false;
@@ -106,9 +106,10 @@ bool NavEKF2_core::calcGpsGoodToAlign(void)
     if (yawFail) {
         hal.util->snprintf(prearm_fail_string,
                            sizeof(prearm_fail_string),
-                           "Mag yaw error x=%.1f y=%.1f",
+                           "Mag yaw error x=%.1f y=%.1f yaw=%.1f",
                            (double)magTestRatio.x,
-                           (double)magTestRatio.y);
+                           (double)magTestRatio.y,
+                           (double)yawTestRatio);
         gpsCheckStatus.bad_yaw = true;
     } else {
         gpsCheckStatus.bad_yaw = false;
diff --git a/libraries/AP_NavEKF2/AP_NavEKF2_core.h b/libraries/AP_NavEKF2/AP_NavEKF2_core.h
index eff1b1c340..aa928a400d 100644
--- a/libraries/AP_NavEKF2/AP_NavEKF2_core.h
+++ b/libraries/AP_NavEKF2/AP_NavEKF2_core.h
@@ -774,6 +774,7 @@ private:
     uint32_t lastPosReset_ms;       // System time at which the last position reset occurred. Returned by getLastPosNorthEastReset
     Vector2f velResetNE;            // Change in North/East velocity due to last in-flight reset in metres/sec. Returned by getLastVelNorthEastReset
     uint32_t lastVelReset_ms;       // System time at which the last velocity reset occurred. Returned by getLastVelNorthEastReset
+    float yawTestRatio;             // square of magnetometer yaw angle innovation divided by fail threshold
 
     // variables used to calulate a vertical velocity that is kinematically consistent with the verical position
     float posDownDerivative;        // Rate of chage of vertical position (dPosD/dt) in m/s. This is the first time derivative of PosD.