Latest Centrelink Deeming Rate Changes Explained

There are some important Centrelink changes coming from 20 September, particularly for people receiving the Age Pension.

One of those changes relates to deeming rates – something you may hear mentioned in the news over the coming weeks.

So, what does it actually mean?

What is deeming?

Centrelink uses deeming to work out the income it assumes you receive from financial investments such as bank accounts, term deposits, shares and managed funds. Rather than using what those investments actually earn, Centrelink applies set rates to calculate an assumed amount of income. That income is then used as part of the Age Pension income test.

What's changing?

From 20 September 2026, the deeming rates increase:

• Lower rate: 1.25% → 1.75%

• Higher rate: 3.25% → 3.75%

The lower rate applies to the first $66,800 for a single person or $110,600 for a couple combined. Amounts above these thresholds are deemed at the higher rate.

An example

Let's say a retired couple has $500,000 in financial investments.

At the moment, Centrelink would deem those investments to produce around $14,040 a year of income.

From 20 September, the same $500,000 will be deemed to produce around $16,540 a year.

So while their investments haven't changed, Centrelink will count an additional $2,500 of annual income under the income test.

Depending on their circumstances, this could affect the amount of Age Pension they receive.

Does this mean your pension will go down?

Not necessarily.

At the same time, the maximum Age Pension is also increasing from 20 September:

• Single: +$36.80 per fortnight

• Couple combined: +$55.60 per fortnight

So the outcome will be different for everyone.

Some people may still receive an increase in their pension, while for others the higher deeming rates may offset some of that increase.

If your pension is determined by the assets test rather than the income test, the deeming change may have little or no effect on your payment.

Do you need to do anything?

For most people, no.

Centrelink will automatically apply the new deeming rates from 20 September. You don't need to contact Centrelink or change your investments simply because the rates are changing.

Your first payment after 20 September may look a little different as the new pension and deeming rates take effect.

For our clients receiving Centrelink benefits, we'll also take these changes into account as part of our normal review process.

If you'd like to read more, Services Australia has further information about deeming on its website. Services Australia - Deeming

This information is general in nature and does not take into account your personal circumstances. You should consider whether it is appropriate for you and seek professional advice before making any decisions.

At Access Wealth Group, we help people across Canberra and its surrounds retire confidently. Talk to us about optimising your financial planning needs.

This article is of a general nature only and does not take into account your individual financial circumstances, objectives, or needs. It does not constitute personal financial advice. You should not act on any of the information provided without first seeking professional financial advice that considers your personal situation.