The Minister for Social Services, Scott Morrison, has announced a decrease in the age pension deeming rates.
“The lower deeming rate will decrease from 2 per cent to 1.75 per cent for financial investments up to $48,000 for single pensioners and allowees, $79,600 for pensioner couples and $39,800 for each member of an allowee couple,” said Mr Morrison.
The upper deeming rate will also decrease from the current 3.50% to 3.25%. Both the decrease in the deeming rate and an indexation increase to the age pension will apply from 20 March.
Source: Department of Social Services, Guide to Social Security Law
Morrison claimed that this decrease will give “more than 770,000 Australian part-pensioners and allowance recipients” a $200 million boost to their payments.
“This additional investment will mean more in the pockets of pensioners. Under the new deeming rates part-pensioners will receive an average increase in their payments of $3.20 a fortnight, $83.20 a year,” Mr Morrison said.
“These payments show that the Coalition understands the pressures facing pensioners and that we have a plan to support pensioners deal with rising costs of living and changing economic circumstances.”
The deeming rates are used to calculate the income from financial assets, for income tested payments including the Age Pension, Disability Support Pension and Newstart.
Morrison said the deeming rates had been reduced as “returns available to pensioners and other allowees have decreased.”
“Deeming rates reflect the rates of return that people receiving income support payments can earn from their financial investments,” he said.
The deeming rates are set by the Minister for Social Services via legislative instrument.
Minister Scott Morrison has also said, on Twitter, that “the Government is not considering including the family home in the assets test for the aged pension.”
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