From September 20, 2025, a big shift is coming for hundreds of thousands of Australians who rely on Centrelink payments. After a five-year freeze, the government will increase deeming rates—the assumed rates of return on your savings and investments.
If you’re a pensioner, on JobSeeker, or receiving other payments, these changes could affect how much support you get. Here’s everything you need to know.
What Are Deeming Rates?
Deeming rates are the rates the government assumes you earn on financial assets such as:
- Bank accounts
- Term deposits
- Superannuation (once you’re of age)
- Shares and managed funds
Instead of looking at your actual investment returns, Centrelink “deems” an amount based on set rates. This figure is then used to work out your eligibility and payment amount for pensions and other benefits.
This system makes it simpler for both Centrelink and recipients, but changes in deeming rates can directly impact your income test results.
The Current Deeming Rates (Frozen Since 2020)
For the past five years, deeming rates have been at historic lows:
| Group | Assets up to threshold | Rate | Assets over threshold | Rate |
|---|---|---|---|---|
| Singles | First $64,200 | 0.25% | Balance above $64,200 | 2.25% |
| Couples (combined) | First $106,200 | 0.25% | Balance above $106,200 | 2.25% |
These low rates were introduced during the pandemic to ease cost-of-living pressures.
The New Deeming Rates From September 20, 2025
The freeze is ending, and rates will rise:
- Lower deeming rate: Increases from 0.25% → 0.75%
- Upper deeming rate: Increases from 2.25% → 2.75%
The same thresholds ($64,200 for singles and $106,200 for couples) will still apply.
| Group | Assets up to threshold | New Rate | Assets over threshold | New Rate |
|---|---|---|---|---|
| Singles | First $64,200 | 0.75% | Balance above $64,200 | 2.75% |
| Couples (combined) | First $106,200 | 0.75% | Balance above $106,200 | 2.75% |
Why Are Deeming Rates Changing Now?
- The government froze rates during the pandemic to protect retirees and welfare recipients.
- Since then, the Reserve Bank lifted the cash rate from a record 0.10% to 4.35% in 2023.
- Inflation peaked at 7.8% in late 2022 but has now dropped to 2.1% (June 2025).
- With the economy stabilising, the government says it’s time for deeming rates to “catch up.”
Social Services Minister Tanya Plibersek explained that the new rates better reflect what pensioners could realistically earn on their money.
Who Will Be Affected?
More than 771,000 Australians will see changes to their payments, including:
- 460,000 Age Pension recipients
- 96,000 JobSeeker recipients
- 62,000 Disability Support Pension recipients
- Plus thousands on parenting and other payments
If you have savings or investments, your deemed income may rise, which could slightly reduce your Centrelink entitlements.
Tips to Prepare for the Change
- Review your assets: Make sure Centrelink has up-to-date details of your bank accounts, super, and investments.
- Use Centrelink calculators: Estimate how the new deeming rates could affect your payment.
- Seek advice: A financial planner or Centrelink Financial Information Service officer can explain your options.
- Track indexation: Some payments will also increase on September 20 due to indexation, which may balance out the changes.
FAQs About Deeming Rates
1. What are deeming rates used for?
They’re used to calculate your deemed income for Centrelink’s income test, which affects Age Pension, JobSeeker, Parenting Payment, and other benefits.
2. Do deeming rates affect everyone?
No. Only people with financial assets such as savings, shares, or super are affected. If you have little or no assets, deeming rates won’t impact you.
3. Will my Age Pension drop immediately?
Not necessarily. While your deemed income may increase, the September indexation could offset the change. It depends on your financial situation.
4. Can deeming rates go down again?
Yes. From now on, the Australian Government Actuary will review deeming rates and recommend adjustments in line with the economy.
5. How can I reduce the impact of higher deeming rates?
Consider diversifying your investments, review your spending, and make sure Centrelink has the most accurate details of your assets.
Final Thoughts
The increase in deeming rates marks the end of a five-year freeze that cushioned pensioners during tough times. While the change may slightly reduce payments for some, it reflects today’s more stable economy.
If you receive Centrelink support, now is the time to check your assets, review your budget, and plan ahead. Taking action early can help you stay in control of your finances.