WEEKLY E-MAIL

1 September 2025

CENTRELINK DEEMING RATES DUE TO INCREASE FROM 20 SEPTEMBER 2025

By Sam Eley

On 20 August, 2025, Minister for Social Services Tanya Plibersek announced upcoming changes to Centrelink deeming rates, effective from 20 September 2025.

What Are Deeming Rates?

Deeming rates are used by Centrelink to calculate the income generated from financial assets such as bank accounts, shares and superannuation. These rates help determine eligibility and payment amounts for income-tested benefits like the Age Pension and Low Income Health Care Card. The system assumes these assets earn a set rate of income, regardless of actual returns.

Since May 2020, deeming rates have been frozen at historically low levels to support pensioners and income support recipients during the COVID-19 recovery. The rates are typically influenced by the Reserve Bank of Australia’s (RBA) official cash rate.

Why Are Rates Changing?

With inflation easing and economic conditions improving, the Government plans to gradually return deeming rates to pre-pandemic settings. The goal is to reflect realistic returns that pensioners and other recipients can reasonably earn on their investments.

New Deeming Rates from 20 September 2025

Even with these increases, deeming rates will remain below historical pre-COVID averages.

Future Oversight

The Australian Government Actuary will now be responsible for recommending future deeming rates. These recommendations will be based on accessible investment returns, ensuring fairness and transparency. The Government will retain the ability to adjust rates during exceptional circumstances.

The impact of these changes will depend on your individual personal circumstances. If your payment is affected because of the deeming rate increase, speak with your Financial Adviser to determine ways to improve Age Pension outcomes, or increase your cashflow from your investments to maintain your income at a similar overall level.

Sam Eley
Senior Financial Planner
Authorised Representative No. 1234685

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

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