Centrelink Deeming Rates Are Changing: What It Means for Your Pension

From 20 September 2025, the Australian Government will increase the deeming rates used to calculate income from financial assets for Centrelink and DVA income support payments. This is the first change in five years, and it could affect how much Age Pension, Disability Support Pension, or Veteran Payment you receive.

What Are Deeming Rates?

Deeming rates are used by Centrelink and the Department of Veterans’ Affairs (DVA) to estimate how much income you earn from financial assets like bank accounts, shares, and superannuation. Instead of looking at your actual earnings, the government assumes a set rate of return.

From 20 September:

• The lower deeming rate will rise from 0.25% to 0.75%.
• The upper deeming rate will rise from 2.25% to 2.75%.

These rates apply to:

• Singles: First $64,200 of financial assets at the lower rate; anything above at the upper rate.
• Couples: First $106,200 combined at the lower rate; anything above at the upper rate.

Who Will Be Affected?

About 460,000 Age Pensioners and thousands more on DVA and other income support payments will be impacted. If you’re receiving a part pension and have financial assets, your deemed income will increase, which could reduce your pension or other income support payment.

For example:

• A single homeowner with $300,000 of financial assets receives the full pension. However, after 20 September 2025, their maximum pension will reduce by $25 per fortnight because of the increased deeming rates.

The new deeming rates mean your deemed income will be higher, so your pension may reduce sooner than before. However, the government is also increasing pension rates through indexation, which may offset some of the impact.

Selling Your Home? You May Get an Exemption

If you sell your principal home and plan to buy, build, or renovate a new one, the sale proceeds can be exempt from the assets test for up to 24 months. During this time:

• You’ll still be assessed as a homeowner.
• The exempt funds will be deemed at the lower rate only (0.75% from 20 September).

This exemption helps retirees who are downsizing or relocating avoid losing their pension while they transition to a new home.

What You Can Do

• Review your financial assets and income.
• If you’ve sold your home, notify Centrelink to apply the exemption.
• Seek advice if you’re unsure how the changes affect you.

These changes aim to reflect more realistic investment returns while keeping the system fair. Staying informed and proactive will help you make the most of your entitlements.