Part 4 of our editorial series: "Your Pension, Your Future"
If you're receiving a full or part Age Pension, changes to deeming rates after June 2025 could affect your entitlements. With the current deeming rate freeze set to expire on 30 June 2025, now is the time to prepare and understand what may lie ahead.
At Downsizing.com.au, we want older Australians to feel informed, empowered, and ready to make the most of their income options in retirement.
What Are Deeming Rates?
Deeming rates are the rates the government uses to estimate the income you earn from your financial assets (like savings, shares, and super). These estimated earnings help Centrelink calculate your Age Pension entitlements under the income test.
Whether or not your investments actually return that amount, your pension is assessed based on the deemed rate. Deeming - Age Pension - Services Australia
What’s Changing in July 2025?
Since 2020, deeming rates have been frozen at historically low levels. As of May 2025:
- The lower deeming rate is 0.25 percent.
- The upper deeming rate is 2.25 percent.
These rates are due to be reviewed or increased from 1 July 2025.
If rates rise, your deemed income could also increase, which may:
- Reduce your part pension amount.
- Push some people over the eligibility threshold.
- Impact commonwealth seniors health card access.
Real-Life Scenario: Maria, The Community Seeker
Maria, 75, lives in a retirement community and receives the full Age Pension. She has modest savings and a small super account.
If deeming rates rise by even 1 percent, the government will assess Maria's income as higher than it actually is, possibly reducing her fortnightly payments. For retirees like Maria, every dollar counts — so it’s important to stay ahead of these changes. Assets test for Age Pension
What Can You Do Now?
1. Get a Financial Health Check
Review your assets with a financial adviser to estimate how future deeming rate changes might affect you.
2. Explore Income-Smart Investments
You may want to rebalance your portfolio to manage income in line with Centrelink expectations.
3. Understand the Income and Assets Tests
Knowing how your finances are assessed can help you make smarter downsizing and investment decisions.
Disclaimer: This article provides general information only and does not take into account your personal financial situation or needs. You should consider obtaining independent financial advice from a licensed professional before making any decisions based on this content.
