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How deeming rates can affect your retirement income

Why use deeming rates? 

The estimate of the income earned from your assessable financial assets is based on a rate set by the Australian Government known as the ‘deeming rate’. It’s used because the government needs to determine eligibility before the investment income has been received.  

Example: Sarah wants to start getting the Government Age Pension now. As she doesn’t know what her investment income will be, deeming rates are applied by Centrelink to make an estimate. These deeming rates are based on Sarah’s total assessable financial assets. 

How does deeming affect the pension? 

Eligibility for the Government Age Pension is based on two tests: 

Deeming applies to the Income Test. If it's calculated that your investment income will be over a certain threshold, then the amount you receive from the Government Age Pension may be affected.

What is the current deeming rate for pensioners?

Deeming rates 2023/24 Single Couple
0.25% Up to $60,400 Up to $100,200
2.25% Above $60,400 Above $100,200

Who sets the deeming rates? 

The Australian Government reviews the deeming rates every year and decides whether to change the rates or keep them the same. In making this decision the government considers factors including official bank interest rates, the economy, the stock market and Australia's overall financial position. The new rates usually start from July.  

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