WEEKLY E-MAIL

28 September 2026

Centrelink Deeming Rate Changes:

Potential Impact on Age Pension Recipients and Low Income Health Care Card Eligibility

By Karen Maher

On 20 August 2026, the Australian Government Actuary (AGA) recommended, and the Minister for Social Services determined, that Centrelink deeming rates would increase from 20 September 2026. This follows the previous increases in September 2025 and March 2026 as part of the Government’s plan to gradually return deeming rates to more normal levels.

What Are Deeming Rates?

Deeming rates are benchmarks used by Centrelink to estimate the income earned from financial assets, such as bank accounts, shares, managed funds and superannuation pensions. These assumed earnings are used to assess eligibility for, and the level of, income-tested benefits, including the Age Pension and concession cards such as the Low Income Health Care Card.

Rather than assessing actual investment returns, Centrelink applies a standard rate of return to your financial assets to calculate your “deemed income”.

Why Are Rates Changing?

The updated rates are based on advice from the Australian Government Actuary (AGA).

The AGA has advised that the new deeming rates better reflect investment returns that are available to the majority of social security recipients. The increase also forms part of the Government’s ongoing commitment to gradually reset deeming rates following the end of the deeming rate freeze.

While higher deeming rates may reduce Age Pension entitlements for some pension recipients, the Government considers the revised rates to be more reflective of current investment market conditions.

New Deeming Rates from 20 September 2026

When Will the Changes Apply?

The new deeming rates took effect from 20 September 2026, alongside the regular September social security indexation.

This indexation round also increased Age Pension payment rates and adjusted relevant income and asset test thresholds.

Recipients do not need to take any action, as the changes will be applied automatically by Centrelink.

What Does This Mean For You?

The impact of the higher deeming rates will depend on your personal financial circumstances. Individuals whose Age Pension entitlement is assessed under the income test may see a reduction in their pension if the higher deemed income results in a lower entitlement.

If you are concerned about the impact of these changes, we encourage you to speak with your financial adviser. They can help identify strategies to optimise your Age Pension entitlements and assist in maintaining your overall income needs.

Importantly, as part of the September 2026 indexation process, many pension recipients will also benefit from higher Age Pension payment rates and increased income and asset test thresholds, which may offset some or all of the impact of the higher deeming rates.

Karen Maher
Associate

If you have any questions or comments, please email me at karen@gfmwealth.com.au

Disclaimer: This document is not an offer or invitation to any person to buy or sell any interest in or deposit funds with any institution.  The information here is of a generic nature, and does not take into account your investment objectives or financial needs.  No person should act upon this information without firstly seeking competent, professional advice specifically relating to their own particular situation.

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