For many Australians receiving Centrelink benefits, small financial rule changes can significantly affect fortnightly payments. While pension increases often make headlines, other adjustments—such as changes to deeming rates—can quietly alter how benefits are calculated.
From 20 March 2026, updated Centrelink deeming rate rules are expected to affect how income from financial assets is assessed for pension payments. These changes could influence the amount some recipients receive, particularly those with savings, investments, or superannuation income streams.
The adjustment forms part of the government’s regular review of pension and welfare settings to ensure payments reflect economic conditions and financial returns.
Here’s what Australians need to understand about the 2026 deeming rate update and its potential impact on Centrelink payments.
What Is Changing From 20 March 2026
Deeming rates are used by Centrelink to estimate how much income people earn from their financial assets. Instead of calculating actual investment returns, the government assumes assets generate income at a set rate.
Beginning 20 March 2026, these deeming rates will be reviewed as part of the broader pension indexation update.
Key points about the change include:
- Effective date: 20 March 2026
- Affected payments: Age Pension and several income-tested Centrelink benefits
- Assessment method: Estimated income from financial assets
- Impact: Could increase or decrease assessed income
- Application: Automatically applied by Centrelink
The goal of deeming rules is to simplify income testing while treating all pensioners fairly regardless of the actual returns they earn.
What Are Deeming Rates
Deeming rates are the government’s way of estimating income from financial assets when calculating benefits.
Rather than checking every individual investment return, Centrelink assumes assets generate income at predetermined rates.
These assets may include:
- Bank savings accounts
- Term deposits
- Shares and managed funds
- Investment bonds
- Account-based superannuation pensions
- Certain trust investments
This system simplifies the calculation of pension payments while maintaining consistency across the welfare system.
Current Deeming Thresholds and Rates
Centrelink typically uses a two-tier deeming system, where different portions of financial assets are assessed at different rates.
| Asset Amount | Deeming Rate Applied |
|---|---|
| Up to lower threshold | Lower deeming rate |
| Above threshold | Higher deeming rate |
Typical thresholds often apply as follows:
| Household Type | Lower Threshold | Higher Rate Applied Above |
|---|---|---|
| Single pensioner | First portion of assets | Remaining balance |
| Couples | Higher combined threshold | Remaining balance |
The government reviews these rates periodically to reflect economic conditions such as interest rates and investment returns.
Why Deeming Rates Matter for Pension Payments
Changes to deeming rates can affect the income test used to calculate Centrelink payments.
If the government increases deeming rates:
- Assessed income from assets may increase
- Pension payments may be reduced for some recipients
If rates stay the same or decrease:
- Pension payments may remain stable or increase slightly
Because the Age Pension uses both income tests and asset tests, deeming changes mainly affect those with financial investments or savings.
Payments Potentially Affected by Deeming Changes
Several Centrelink payments rely on income tests that include deemed income.
Payments that may be affected include:
- Age Pension
- Disability Support Pension
- Carer Payment
- JobSeeker Payment (for some recipients)
- Parenting Payment
- Commonwealth Seniors Health Card eligibility
For pensioners with minimal financial assets, the impact may be limited. However, individuals with larger savings balances could see payment adjustments.
Example of How Deeming Works
To understand how deeming works, consider a simplified example.
If a single pensioner has $60,000 in financial assets, Centrelink may apply:
- A lower deeming rate to the first portion of assets
- A higher rate to the remaining balance
The calculated deemed income is then added to other income sources when determining the pension payment.
If the deemed income increases due to a higher rate, the pension payment could decrease slightly.
Comparison: Pension Assessment Before and After Deeming Review
| Factor | Before Deeming Review | After Deeming Review |
|---|---|---|
| Assessed investment income | Based on previous deeming rates | May change depending on new rates |
| Pension income test | Uses existing deemed income | Recalculated with new rate |
| Impact on payments | Current pension level | Potential increase or decrease |
The exact effect varies depending on each recipient’s financial circumstances.
What You Should Know
Centrelink recipients should keep several important points in mind regarding the March 2026 deeming review.
1. Changes take effect on 20 March 2026
The new assessment will apply from this date as part of pension indexation updates.
2. No action is required
Centrelink automatically recalculates payments based on the updated deeming settings.
3. Savings and investments may affect payments
People with higher financial assets may see changes to their pension amount.
4. Payment adjustments may be small
Many recipients will experience only minor changes.
5. Notifications will appear in myGov accounts
Recipients may receive messages if their payment amount changes.
Frequently Asked Questions
1. What are deeming rates?
Deeming rates are used by Centrelink to estimate income earned from financial assets.
2. When will the new deeming rates apply?
The changes are scheduled to take effect 20 March 2026.
3. Which payments use deeming rules?
Payments such as the Age Pension, Disability Support Pension, and Carer Payment use deeming as part of the income test.
4. Do I need to report my investment returns?
No. Centrelink uses the deeming system rather than actual returns for most financial assets.
5. Will everyone’s pension change?
Not necessarily. Only recipients whose income assessment is affected may see changes.
6. Can deeming rates reduce my pension?
Yes. If deemed income increases, it could slightly reduce pension payments.
7. Can payments increase if deeming rates change?
In some cases, yes—especially if rates are reduced or thresholds increase.
8. What assets are included in deeming calculations?
Savings accounts, shares, term deposits, and certain investments are included.
9. Is my home included in deeming calculations?
No. The family home is not included in the financial asset deeming calculation.
10. Will Centrelink notify me if my payment changes?
Yes. Updates may appear in your myGov or Centrelink account notifications.
11. Do couples have different thresholds?
Yes. Couples usually have higher combined thresholds than single pensioners.
12. How often are deeming rates reviewed?
The government reviews them periodically as economic conditions change.
13. What should I do if my pension decreases?
Review your income and asset information in your Centrelink account and ensure details are accurate.
14. Can financial planning help reduce the impact?
Some retirees choose to review their financial strategies with professional advice.
15. Are deeming rates the same as interest rates?
No. Deeming rates are set by the government and may not reflect actual bank or investment returns.
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