Centrelink Deeming Rates and the Commonwealth Seniors Health Card

What is deeming?

Services Australia (Centrelink) use “deeming” rules to work out income from your financial assets. The actual “deeming rate” (refer below) is the rate of income the government assumes a person’s financial assets have earned. It forms a part of the income test for certain Centrelink payments, including the Age Pension. It can affect how much Age Pension a retiree receives.

If your investment return is higher than the deemed rate, the government doesn’t count that extra money as part of your income.  Therefore, the lower the deeming rate, the more people can earn from their investments, without it affecting their pension payments


The current deeming rates for the age pension are: 

For singles: The first $53,600 of your financial assets are deemed to earn 0.25%. Anything above $53,600 is deemed to earn 2.25%.

If you’re a member of a couple and at least one of you receives a pension: The first $89,000 of your combined financial assets are deemed to earn 0.25%. Anything above $89,000 is deemed to earn 2.25%.


The good news


With interest rates on the way up again, earnings from cash and term deposit accounts will increase. Whilst this is pleasing for many retirees, a possible ramification was that the deeming rates would also increase (thereby potentially decreasing the Age Pension).


However, on 5 May 2022, the Morrison Government announced that the deeming rate will stay frozen at current levels for the next two years, ensuring Age Pension payments are not reduced. This will benefit approximately 900,000 pensioners. Labor have agreed to match this.

The Commonwealth Seniors Health Card (CSHC)

In other positive news for retirees, the Morrison Government promised to raise the threshold for the CSHC, with Labor also pledging to match it. The CHSC is offered to Australians over age 67, who don’t collect payments from Veterans Affairs and don’t qualify for the age pension because the value of their assets is too high. With a CSHC you may get benefits such as:

Both the Coalition and Labor have promised to raise caps from 1 July 2022. The new caps would be:

  • $90,000 a year for singles 
  • $144,000 a year for couples
  • $180,000 a year for couples separated by illness, respite care or prison


CFP® | BSc(Ma)

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