The major warning Centrelink has placed on the pensioners comes after a major change in deeming rates applied to determine income received by savings and investments in savings and investments in relation to the means test of Age Pension. The government has since September 20, 2025, increased these rates, after a five-year freeze that continued to artificially keep rates artificially low, which means that the amount of income Centrelink expects pensioners to earn through financial assets is increased. This reform may lead to a decrease in the fortnightly pension payments, which is why the experts and Centrelink encourage pensioners to pay more attention to their finances.
What Are Deeming Rates and Why?
Deeming rates are the rates that Centrelink assumes are brought about by savings, shares, superannuation and other financial investments to estimate the income of such investments in calculating eligibility to receive Age Pension and other forms of welfare payment. Centrelink uses deeming rates of financial assets to estimate income instead of the actual earnings.
– The lower deeming rate was 0.25% and the higher rate was 2.25 until 2025.
-By September 20, 2025, the lower rate was raised to 0.75, and upper to 2.75.
Such shifts put assumed income in closer relation to the current market conditions, in particular an increased official cash rate of the Reserve Bank of Australia, which will be 4.35% in mid-2025.
The Centrelink Warning of 64,200 Explained
The asset threshold is at 64,200: this is the amount that is required of single people. Centrelink takes the first 64 200 of the financial assets of one pensioner to earn the lower deemed rate whereas the remaining funds are subjected to the higher rate. The combined threshold of couples is 106,200.
– Pensioners whose assets are close to or exceed these amounts could have the deemed amount of income increase significantly.
– The higher the deemed income, the higher the income test and the less pension paid.
– Within 5 years, there is a possibility that some pensioners will lose up to 64,200 in pension payments unless they change financial strategies or properly update Centrelink records.
Implication on Pensioners and Suggestions
There is the risk of many pensioners, particularly those on superannuation or savings as a source of income, making less fortnightly payments. Centrelink approximates that these changes will impact on approximately 70,000 pensioners.
To mitigate impact:
– Revise and renew financial asset details on the myGov portal of Centrelink.
– Check with financial advisers to maximise investment portfolios in the new deeming rates.
– Take into account the transfer of funds to less profitable accounts where it would be strategically advantageous.
– Income, investment and superannuation withdrawals Any change in income, investment or superannuation should be reported immediately to avoid excess payments and possible repayments.
Other Centrelink Payment Reforms
Centrelink is also raising the rate of pensions and income levels, starting in October 2025, to partially recover part of the losses incurred in inflation. The actions offer relief but might not completely offset deeming adjustments made to everyone.
Centrelink Deeming Rate Update Summary
| Category | Previous Rate (Pre-Sept 2025) | New Rate (From Sept 20, 2025) |
|---|---|---|
| Lower Deeming Rate (Single Assets ≤ $64,200) | 0.25% | 0.75% |
| Upper Deeming Rate (Assets > $64,200) | 2.25% | 2.75% |
| Lower Deeming Rate (Couple Assets ≤ $106,200) | 0.25% | 0.75% |
| Upper Deeming Rate (Assets > $106,200) | 2.25% | 2.75% |
FAQs
Q1. What are deeming rates and why has it changed?
The rates of deeming are employed to determine the level of income based on financial assets to use in calculating pensions. They rose in 2025 to indicate the higher interest rates following a freeze in the pandemic.
Q2. What does the $64,200 warning mean?
That is the point to which the lower deeming rate is applicable to the individuals. Increases in the amount of assets over this are treated at a higher rate, which affects the pension payments.
Q3. What should pensioners do to prepare to these changes?
Reviewing and updating financial information with Centrelink, meeting with financial advisors and varying investment strategies as required.
