Pension deeming rates to be lowered
The social security deeming rates* will be lowered from 20 March 2015 as follows:
- the ‘lower deeming rate’ will decrease from 2% to 1.75% for financial investments up to $48,000 for single pensioners and allowees, $79,600 for pensioner couples and $39,800 for each member of an allowee couple; and
- the ‘upper deeming rate’ will decrease from 3.5% to 3.25% for balances over these amounts.
(*) The deeming rules are part of the social security income test, and are used to assess income from financial investments for social security and Veterans’ Affairs pension and allowances, such as the Age Pension, Disability Support Pension and Carer Payment, income support allowances and supplements such as the Parenting Payment and Newstart.
Deeming rates reflect the rates of return that people receiving income support payments are deemed to earn from their financial investments.
The deeming rates have been reduced as actual returns available to pensioners and other allowees have decreased.
However, if income support recipients actually earn more than these rates, the extra income is not assessed for the purposes of the social security income test.