Many of you will have heard of the term “deeming”. It is a method used by Centrelink to determine your income when assessing your eligibility for a benefit. Rather than have you declare the exact earnings from your shares or bank accounts, Centrelink “deem” these financial assets to earn a set rate of return.
The deeming rates are tiered. The first $51,800 of financial assets for singles, and $86,200 for couples, is deemed to earn 1.75% per annum. Anything thereafter is deemed at 3.25%.
With interest rates falling, many Age Pensioners and concession card holders have questioned the deeming rates. We hear, “Why am I being assessed as earning 3.25% on my bank account when in reality I am receiving 1.5%?”
In recognition of this, the Government has made changes. Effective as of 1 July 2019, the lower deeming rate will reduce from 1.75% to 1.00%. The upper deeming rate for financial assets will also reduce from 3.25% to 3.00%.
Age Pension recipients assessed under the income test, be it single or as a couple, will see a small increase to their fortnightly entitlement due to these changes. The amount of increase in your payment will depend on your existing circumstances.
To Income Tested Age Pensioners reading this, it is important to note that this increased payment will not be payable until the end of September, though will be backdated to 1 July 2019.
These changes may also see more people become eligible for the Low Income Health Care Card (LIHCC). For current Age Pension recipients and Health Care Card holders, you do not need to act on these changes. For those who previously weren’t eligible for a benefit, your fortunes may have changed and the team at Muirfield welcomes you to arrange an appointment to discuss your circumstances further.