From 20 September 2025, the government is increasing the deeming rates used to calculate income from financial assets for Age Pension payments in September.

This change affects how much income Centrelink assumes you earn from things like savings accounts, shares, managed funds and Superannuation, even if your actual earnings are different.

What’s changing?

  • The lower deeming rate will rise from 0.25% to 0.75%
  • The upper deeming rate will rise from 2.25% to 2.75%

These rates are used to estimate your investment income for the pension income test, which determines how much Age Pension you receive. The change reflects updated market conditions and expert advice.

Who might be negatively affected?

Take Margaret, a retiree aged 70 with $300,000 in financial assets (including super, not including her home). Under the current deeming rates, her deemed income is lower, allowing her to receive a higher Age Pension. With the new rates, her deemed income will increase, therefore reducing her pension payments from Centrelink, even if her actual investment returns haven’t changed.

Why does this matter?

Deeming simplifies pension calculations, but when rates rise, it can mean less support for retirees who rely on stable income. It’s especially important for those with modest savings who are just above the threshold.

Concerned about how this affects you or your loved ones?

Reach out to Rikki Juzwin or Grant McWhinney from BKM Wealth. We’re here to help you understand the impact and explore strategies to protect your retirement income.

Read the full article from The Conversation here

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