On 20 September 2026, deeming rates rose to 1.75% and 3.75%. These rates are what Centrelink uses to assess how much income your savings and investments earn, so if you receive the Age Pension, your assessed income may now be higher. But that doesn't automatically mean your pension will fall.
Here’s how deeming works, who it may affect, and whether you need to do anything.
What are the current deeming rates?
From 20 September 2026, Services Australia applies these deeming rates:
- Lower rate: 1.75%
- Upper rate: 3.75%
For the Age Pension, the lower rate applies to:
- The first $66,800 of financial assets if you’re single
- The first $110,600 of combined financial assets if you’re a member of a couple and at least one of you receives a pension
Anything above these thresholds is deemed at the upper rate.
Rates and thresholds sourced from Services Australia, current as of October 2026.
What are deeming rates?
Deeming is how Centrelink works out the income your financial assets are assumed to earn. Rather than tracking the actual return on every bank account or investment you hold, it applies a set rate to their total value.
That assumed income, called deemed income, is then added to any other income you have and assessed under the Age Pension income test.
Here’s a simple example. A single pensioner has $100,000 in financial assets:
- The first $66,800 is deemed at 1.75%, which is $1,169
- The remaining $33,200 is deemed at 3.75%, which is $1,245
Together, this gives a total deemed income of $2,414 a year. Centrelink includes this amount with the person’s other assessable income when applying the Age Pension income test. The income test can affect both eligibility for the Age Pension and the amount they receive.
This example is illustrative only. It assumes a single Age Pension recipient with $100,000 in financial assets and no other assets or income. It shows deemed income only, not investment returns or a change in pension payments. Your situation will be different.
Will higher deeming rates reduce my Age Pension?
Possibly, but not necessarily.
Centrelink assesses your Age Pension in two ways: one test based on your income (the income test) and one test based on your assets (the assets test). Each test gives a pension amount, and you receive whichever amount is lower. So, whether the deeming change affects you depends on which test currently determines your payment.
Your pension may not change if:
- Your payment is determined by the assets test rather than the income test
- Your total assessable income, including deemed income, stays below the income-free area
Your pension may reduce if:
- Your payment is already determined by the income test
- The higher deemed income pushes your assessable income above the income-free area
The Age Pension was also increased on 20 September 2026 by $36.80 per fortnight for singles and $27.80 per fortnight for each member of a couple. For some pensioners, higher deemed income may cancel out some or all of that increase. For others, it may make little difference.
Which assets are subject to deeming?
Deeming applies to financial assets. According to Services Australia and the Department of Social Services, these can include:
- bank, building society, and credit union accounts
- term deposits
- shares
- bonds and other fixed-interest investments
- loans you’ve provided to other people
- super you haven’t started drawing an income from, once you reach the Age Pension age
- most account-based pensions, subject to special rules for some pensions that commenced before 1 January 2015
Some assets aren’t deemed. These include your home, car, contents, and personal items. Cryptocurrency is also not treated as a financial asset for deeming, although it still counts under the assets test.
Do you need to do anything about the new rates?
No. Services Australia applies the new rates automatically, so you don’t need to take any action because the rates changed.
You do still need to keep your asset and income details accurate. If the value of your savings or investments changes, or you buy or sell assets, you should update Centrelink within the required timeframe.
Should you change your investments because deeming rates increased?
Deeming is only one part of your overall position. Moving money around purely to reduce deemed income can have other consequences, such as tax, fees, investment risk, or reduced access to your funds.
That said, a rate change can be a useful prompt to review how your cash, investments, income needs, and Age Pension fit together. It’s a good time to look at whether your retirement income strategy still suits your needs.
Not sure whether the new deeming rates affect you?
The impact of a deeming change depends on your broader income and assets and on which test determines your payment. Looking at the whole picture can help you understand where you stand. Our advisers can help you see how your age pension, investments, and retirement income fit together.
Book an appointment with an adviser or learn more about our Retirement Planning services.
Here are some FAQs about the deeming rates.
What are the current deeming rates?
From 20 September 2026, the lower deeming rate is 1.75%, and the upper rate is 3.75%.
What are deeming rates?
Deeming rates are set rates Centrelink uses to assess the income your financial assets earn, regardless of what they actually earn. This deemed income is then included in the income test.
What assets are deemed by Centrelink?
Financial assets such as bank accounts, term deposits, shares, managed investments, loans you’ve made, and most account-based pensions. Super in accumulation phase is also deemed once you reach Age Pension age. Your home, car and personal belongings aren’t deemed.
Will higher deeming rates reduce my Age Pension?
Possibly, but not necessarily. It depends on whether the income test or the assets test determines your payment, and on how much other income you have.
What is the current deeming threshold?
For Age Pension recipients, the threshold is $66,800 for singles and $110,600 combined for couples where at least one partner receives a pension. Amounts above the threshold are deemed at the upper rate.
Do I need to contact Centrelink when deeming rates change?
No. The new rates are applied automatically. You still need to report changes to your assets or income.
What happens if my investment earns more than the deeming rate?
Any return above the deemed amount isn’t counted as income for the income test. It works the other way too: if your investments earn less, you’re still assessed on the deemed rate.
Are account-based pensions subject to deeming?
Generally, yes. Account-based pensions started on or after 1 January 2015 are deemed. Some older account-based pensions held continuously by people receiving payments since before that date may be assessed under different rules.
How often can deeming rates change?
Deeming rates can change at any time. They’re set by the Minister for Social Services on advice from the Australian Government Actuary and are intended to reflect the returns available to most people receiving payments.
General advice disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.