For Australian retirees who rely on both savings and the Age Pension, a small policy adjustment can sometimes have a noticeable financial impact.
In March 2026, a change to Centrelink’s deeming rate calculations may affect how much income the government assumes retirees earn from their investments.
For some pensioners, this adjustment could lead to lower Age Pension payments.
What Are Deeming Rates
Deeming rates are used by Centrelink to estimate income from financial investments.
Instead of calculating the exact return on each investment, Centrelink assumes a standard rate of return.
Assets affected include:
- Bank savings
- Shares
- Managed funds
- Some superannuation balances
This assumed income is used in the pension income test.
What Is Changing in March 2026
The government has confirmed an adjustment that raises the deeming rate to 3.25% for certain calculations.
This means Centrelink may assume higher investment income when assessing pension eligibility.
As a result, some retirees may see:
- Reduced pension payments
- Changes from full pension to part pension
Example of Deeming Impact
| Financial Assets | Deemed Income |
|---|---|
| $100,000 | $3,250 annually |
| $200,000 | $6,500 annually |
| $300,000 | $9,750 annually |
If deemed income exceeds the income test thresholds, pension payments may decrease.
Who Is Most Affected
The change mainly affects retirees who have:
- Significant savings
- Investment portfolios
- Large superannuation balances
Pensioners relying mostly on the full Age Pension may not notice significant changes.
Frequently Asked Questions (Q&A)
1. What is a deeming rate?
An assumed investment return used in pension calculations.
2. When does the change occur?
March 2026.
3. What is the new rate?
Up to 3.25%.
4. Who is affected?
Pensioners with financial investments.
5. Will everyone lose pension income?
No.
6. Does it affect savings accounts?
Yes.
7. Does super count?
Often yes depending on circumstances.
8. Is the family home included?
No.
9. Can pensioners challenge calculations?
Yes through Centrelink reviews.
10. Does this affect new retirees?
Yes if they hold financial assets.
11. Do couples share asset assessments?
Yes.
12. How often do deeming rates change?
Occasionally based on policy decisions.
13. Can payments increase?
Usually not from higher deeming rates.
14. Where can pensioners check details?
Through Centrelink.
15. Are these rules nationwide?
Yes.
The upcoming deeming rate change highlights how small policy adjustments can affect retirement income. Pensioners with savings or investments may want to review their finances to understand how the new rules could influence their payments.
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