How will the deeming rate changes impact your Centrelink benefit?

On 20 September 2025, Services Australia implemented the first increase to deeming rates in over five years. This change affected how income from financial assets is assessed for various Centrelink benefits and payments—most notably the Age Pension and the Low-Income Health Care Card (LIHCC).

The lower deeming rate has risen from 0.25% to 0.75%, and the upper deeming rate from 2.25% to 2.75%.

While the government has also increased Age Pension payments—$29.70 per fortnight for singles and $22.40 for couples—some retirees may have seen a net reduction in their entitlements as a result of the deeming change.

These changes are designed to reflect more realistic investment returns. Generally speaking, most retirees receiving the Age Pension are limited by the assets test, so the changes will have little to no impact on their payments. However, retirees with significant financial assets or those receiving an overseas or defined benefit pension are more likely to see reduced payments.

The most significant impact is expected for those receiving the Low-Income Health Care Card. This card must be renewed annually, and we anticipate that some current holders may no longer meet the eligibility criteria upon reapplication.

The LIHCC is a valuable concession card for individuals who have recently retired and are not yet eligible for the Age Pension, or who have reached Age Pension age but do not qualify. To be eligible, your income for the eight weeks leading up to your application must be below $797 per week for singles or $1,362 per week for couples.

Benefits include concessions on utilities, car registration, pharmaceuticals, and transport. When fully utilised, these concessions can amount to thousands of dollars in annual savings.

Given the value of these benefits, we strongly encourage you to check your eligibility. Please contact our office if you would like assistance in understanding your entitlements.