From 20 September 2026, Australia’s social security deeming rates will rise by 0.5%, as follows:
- Lower Deeming Rate: 1.75% (applied up to $66,800 for singles and $110,600 for couples – combined amount)
- Upper Deeming Rate: 3.75% (applied to financial assets exceeding the respective single or couple thresholds)
This is the third successive increase since the post COVID pandemic rate freeze ended. Before the pandemic, the deeming rate largely reflected the Reserve Bank of Australia’s (RBA) official cash rate. A recent timeline of Deeming Rate increases:
- May 2020 – June 2025: Rates were frozen at historic lows (0.25% lower / 2.25% upper) during the COVID pandemic.
- 20 September 2025: First post-freeze increase of 0.5%, raising rates to 0.75% (lower) and 2.75% (upper).
- 20 March 2026: Second increase of 0.5%, lifting rates to 1.25% (lower) and 3.25% (upper).
- 20 September 2026: Third consecutive increase of 0.5%, moving rates to 1.75% (lower) and 3.75% (upper).
Deeming rates are used by Centrelink to estimate income earned from financial assets such as bank accounts, term deposits, shares and managed investments. The actual return earned is irrelevant. Instead, Centrelink assumes assets earn the deemed rate and this income is then used to determine eligibility for social security payments such as the Age Pension.
The government has timed the increase in the deeming rate to begin on the same day that the Aged Pension and other welfare payments are indexed in line with shifts in the consumer price index (CPI). As part of the overall changes, the maximum Age Pension for a single person will rise by $36.80 per fortnight to $1,237.70, while couples will receive an additional $55.60 per fortnight, bringing the combined maximum pension to $1,866.00.
While pension indexation will provide welcome relief against rising living costs, retirees with substantial financial assets may find that some or all of the increase is offset by the higher deemed income assessment, reinforcing the importance of ongoing Centrelink planning and asset management strategies.
If you have any queries about your personal situation, please call us on 8378 4000.
