Instead of looking at the actual income you earn from your financial assets, Centrelink estimates it for you. This estimated income is called deemed income and is based on the value of your financial assets.
Through these deeming rules, Centrelink assumes your assets are earning a certain amount, no matter how much they really bring in. It’s a way to keep the process fair and consistent for everyone.
Our Retirement Centre can provide one-on-one support and answer the questions you might be too shy to ask. Our services are available to all.
The current deeming rates are as follows as at 2025:
The first $62,600 of your financial assets is deemed to earn 0.25%. Any amount over $62,600 is deemed to earn 2.25%.
The first $103,800 of your combined financial assets is deemed to earn 0.25%. Anything over $103,800 is deemed to earn 2.25%.
The first $51,900 of each partner's share of financial assets is deemed to earn 0.25%. Anything over this is deemed to earn 2.25%.
Deeming rates directly affect your Age Pension payments by estimating the income from your financial assets.
The total deemed income is combined with your other income and assessed under the Age Pension income test, and if this total income exceeds the income thresholds set by Centrelink, your pension payments are reduced (on a sliding scale).
For example:
If your total income exceeds these limits, your pension is reduced by $0.50 for every dollar above the threshold. Deeming rates are an essential part of determining how much pension you can receive and help ensure consistency for all pensioners.
Calculating your deemed income involves applying the current deeming rates to the value of your financial assets.
Here’s how you can calculate it:
Include assets such as bank accounts, shares, managed funds, bonds, and superannuation (if you are over Age Pension age).
For singles, apply 0.25% to the first $62,600 of assets, and 2.25% to any amount above this. For couples, apply 0.25% to the first $103,800 combined, and 2.25% for any excess.
Anna is a single pensioner with $120,000 in financial assets.
This makes Anna’s total deemed income $1,448 annually, or about $55.69 per fortnight. This places her below the threeshold.
The Australian government has announced that deeming rates will remain frozen until 2025. It’s possible there will be new deeming rates introduced after this freeze period, but the current rates of 0.25% and 2.25% will not change until at least July 2025.
A financial planner can take the guesswork out of retirement. Book a time for an initial conversation and we can help you map out your retirement goals, supporting services, and next steps.
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Deeming rates are a critical factor in your retirement planning. Even though the rates are frozen until 2025, they could change after that, affecting your deemed income and your Age Pension.
It’s important to keep potential pension changes in mind when planning your income in retirement. Having a clear understanding of how your financial assets will be treated under deeming rules will help you make informed decisions about how to structure your retirement income.
