How much your pension will change
Any change to pension payments on 20 September will depend on your personal circumstances. Try our simple estimator to give you an idea of the impact.
What is the key benefit of deeming your income?
The benefit of deeming rates is that it avoids pensioners having to constantly report earnings and encourages them to put their savings into an investment that earns a higher rate of return.
So, putting savings in a low-yielding savings account is not a generally a good idea, but having it in higher yielding investments like super could provide a better outcome overall because deeming rates are generally lower than the returns from this type of investment.
That is especially true as current deeming rates sit much lower than returns on savings held in superannuation.
Recently, National Seniors Australia (NSA) reported that Age Pension payments will be adjusted on 20 September 2025 to account for indexation and deeming rate changes.
The maximum rate of increase to the Age Pension from indexation could be up to $29.70 for singles and $22.40 each for couples.
However, with deeming rates increasing by 0.5%, the amount your pension increases could be lower, and in some cases your pension may reduce slightly.
The change to deeming rates have been announced as the freeze has been lifted to better reflect the returns older people receive for their investments. Rates have been on hold for a number of years and this has meant pensioners have been spared lower payments as interest rates increased rapidly.
In a win for common sense, the Minister for Social Services, Tanya Plibersek, listened to organisations like NSA and increased deeming rates modestly in the short term.
That said, there will obviously be some who are disappointed that the freeze was lifted at all, given this will lead to lower pension payments.
The million-dollar question is: How much will individual pensioners be impacted?
Firstly, deeming rates only affect the Age Pension Income Test, so it is only those subject to the income test who will be impacted.
Secondly, because deeming estimates the income a pensioner could receive from certain savings and investments, the impact will vary depending on a pensioner’s personal circumstances.
National Seniors Australia (NSA) has created a simple tool to help you see the possible impact on your pension payment, from the deeming rate adjustment on 20 September, which also takes into account indexation.
This is just a guide and is based on assumptions, so cannot accurately reflect individual circumstances. Only Centrelink will be able to accurately tell you the impact, but this only after 20 September.
The deeming estimator is available here on the NSA website.
NSA will continue to fight for a modest return to higher deeming rates, that does not unfairly punish older people by raising rates too quickly or too high.
If issues about pension adequacy are of concern to you, consider joining our Fix Pension Poverty or Retirement Income campaigns.
Each of these campaigns have different policies that NSA is pushing for, so join the one that best reflects your thinking.
Better still, if you are not already, consider becoming a member of NSA.
These include ASX shares, international shares, bonds, cash at the bank, and some superannuation income streams.
Some financial assets, like investment properties, are not subject to deeming rules. Instead, you simply report the net rental income.
According to the Department of Human Services, by treating all financial investments the same, deeming rules:
Encourage people to choose investments on their merit rather than on the effect the investment income may have on the person's pension entitlement.
Provide an incentive to invest in higher return investments, as any interest rate achieved above the deeming rates doesn’t count as income.
Create a simple way to assess income from financial assets, increasing predictability and reducing fluctuation in payments.
From 20 September 2025:
The first $64,200 of your financial assets will be deemed to earn 0.75%.
Anything over $64,200 will be deemed to earn 2.75%.
