The Australian Government has announced an increase in pension rates from 20 September 2025, giving retirees, carers, and people with disabilities a much-needed financial boost. This update comes as part of the government’s twice-yearly indexation process, designed to help seniors cope with inflation and rising living costs. Along with higher fortnightly payments, changes to deeming rates and income and asset test thresholds will affect eligibility and entitlements.
How Much More Will Pensioners Receive?
The September 2025 adjustment provides a clear increase in fortnightly payments for most pensioners:
| Pension Type | Previous Rate | New Rate (Sept 2025) | Increase |
|---|---|---|---|
| Single Pensioners | $1,149 | $1,178.70 | +$29.70 |
| Couples (Each) | $866 | $888.50 | +$22.40 |
| Couples Combined | $1,732 | $1,777 | +$44.80 |
Amounts include standard supplements, such as the energy allowance, but exclude rent assistance or additional targeted payments.
This adjustment ensures seniors receive more financial stability to manage essentials such as groceries, utilities, and healthcare.
Deeming Rates and Financial Assets
Centrelink uses deeming rates to estimate income from financial assets like savings, shares, and managed investments. From September 2025, the rates have changed:
- Lower rate: 0.75%
- Upper rate: 2.75%
Pensioners with higher savings may see part of their pension reduced due to these increased imputed returns, while those with modest savings benefit from the adjustment.
Updated Income and Asset Test Thresholds
Changes to the income and asset test thresholds allow more Australians to qualify for part or full pensions. Key effects include:
- Some retirees previously ineligible may now receive part pensions.
- Part-pensioners may see smaller gains if deeming offsets increases.
- Full-rate pensioners benefit directly from the higher payments.
These adjustments provide a buffer for retirees with moderate income or assets while helping cover rising living costs.
Transitional Pension Rates
Older recipients under pre-2009 rules will also see increases aligned with the latest indexation. While fewer Australians remain in this category, the updated rates ensure fair treatment for all eligible seniors.
Who Benefits Most?
- Full-rate single pensioners: Clear gain of $29.70 per fortnight.
- Full-rate couples: Combined gain of $44.80 per fortnight.
- Part-pensioners: Gains may be partial due to deeming.
- Newly eligible retirees: Access to part pensions thanks to updated thresholds.
These adjustments help lower-income retirees maintain a predictable income while providing modest relief for asset-owning seniors.
What This Means for Households
The September 2025 indexation ensures pension payments keep pace with real-world living costs, including energy, housing, and groceries. Seniors planning budgets should consider how updated deeming rates and thresholds affect their payments. While the adjustments do not solve all financial pressures, they provide stability and predictability.
FAQs
Q1: When do the new pension rates start?
From 20 September 2025, effective until 19 March 2026.
Q2: Does this increase affect part-pensioners?
Yes, though some may see smaller gains due to higher deeming rates.
Q3: Are these payments automatic?
Yes, eligible pensioners receive the new rates without applying.
Q4: How do deeming rates affect my pension?
Centrelink assumes income from savings and investments. Higher rates may reduce part-pension payments.
Q5: Do couples receive the increase individually?
Yes, each member receives the updated rate based on their entitlements.
Conclusion
The September 2025 pension increase brings higher payments, expanded eligibility, and updated deeming rules, offering Australian seniors stronger financial security. Whether you are a single retiree, part-pensioner, or couple, these updates help keep pace with inflation and rising living costs. Staying informed about these changes ensures you maximize your pension benefits and plan effectively for the months ahead.