Govind Tekale
Age pensioners across Australia will see their payments increase from this Saturday, but changes to deeming rates mean some part-pensioners could find the boost partially offset.
From September 20, the Age Pension, Disability Support Pension and Carer Payment will increase by $29.70 per fortnight for singles and $44.80 per fortnight for couples combined. More than 5 million Australians will benefit from the indexation adjustments, which happen twice yearly in March and September to keep payments in line with inflation.
“You don’t need to do anything; it will happen automatically,” Services Australia confirms on its website. Recipients can check their updated payment amounts through their Centrelink online account or the Express Plus Centrelink app from Saturday.
However, the news isn’t all positive. For the first time since the COVID-19 pandemic began, deeming rates are increasing – from 0.25% to 0.75% for the lower tier, and from 2.25% to 2.75% for the upper tier.
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Deeming rates are used to calculate how much income pensioners are assumed to earn from their financial assets, regardless of actual returns. The rate increase could reduce payments for some part-pensioners with significant savings or investments.
Social Services Minister Tanya Plibersek explained the change as “part of a staged return to pre-pandemic settings” after the government extended the freeze on rates to shield recipients during economic recovery.
“Social security recipients impacted by deeming saved around $1.8 billion as a result,” Plibersek said.
For those with financial assets, the impact varies. A single homeowner pensioner with investments above $210,000 could see their pension reduced by approximately $7 per fortnight for every additional $10,000 in savings, according to finance experts.
The disqualifying asset limits for homeowners have risen by $7,500 for singles and $11,500 for couples, while non-homeowner limits increased by $13,500 for singles and $17,500 for couples.
Other payments receiving increases include JobSeeker, Youth Allowance for those aged 22 and over, ABSTUDY, Parenting Payment, and Commonwealth Rent Assistance.
Going forward, the Australian Government Actuary will advise on future deeming rates, “guided by the returns that pensioners and other payment recipients can reasonably access on their investments,” according to ministerial statements.
For those unsure about eligibility under the new rates, Services Australia recommends checking through official channels, as some who previously missed out may now qualify for a part-pension and accompanying benefits.
