In the Media
About 900,000 Australians will see an increase to their fortnightly social security payments following the Morrison Government’s decision to reduce deeming rates in response to changing economic conditions.
Minister for Families and Social Services Anne Ruston said this was an important change for the 565,000 Age Pensioners and 323,000 other payment recipients with financial assets who were affected by deeming rates.
“The Government is absolutely committed to ensuring the deeming rate is fair and is a reasonable reflection of the state of the market,” Minister Ruston said.
“The lower deeming rate will be cut from 1.0 per cent to 0.5 per cent for financial investments up to $51,800 for single pensioners and $86,200 for pensioner couples.
“The upper rate, which only impacts about 40 per cent of payment recipients with deemed assets, will decrease from 3.0 per cent to 2.5 per cent.
Under the new rates payment recipients whose income is assessed using deeming could receive up to $62 a fortnight for couples, $1612 extra a year, and up to $50 a fortnight for singles, $1300 a year.
On average, affected Age Pensioners would receive an additional $8.42 a fortnight, $219 a year. The extra money will start flowing through into peoples bank accounts from May 1.
Ulton Commentary
Ulton Partner, Kylie Wright said that if you are currently income tested for Age Pension it will be worth reviewing your entitlements based on the reduced deeming rates. The reduction in deeming rates will be, very welcome, to many Australian retirees given the current historically low interest rates.
In addition, there will be some people over who are not entitled to an Age Pension under the assets test, but may now qualify for a Commonwealth Seniors Health Care Card. If you are not currently in receipt of the card and qualify on age and residency, then it is worth checking if you may now qualify on Adjusted Taxable Income.
Source: Deeming rate cut to boost payments for 900,000 Australians, accessed 12 March 2020, https://ministers.dss.gov.au/media-releases/5621
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