Estimating pensioners’ earnings
What are deeming rates?
Deeming rates are percentages set by the Australian Government and used by Centrelink to predict how much you will earn over the next twelve months from things like super and investments. They provide an estimate of your income for the next year to work out if you can receive the age pension.
What are deeming assets?
Deeming assets are financial assets including your super as well as dividends, shares and bonds, investment funds and interest from bank accounts. Non-financial assets such as your home and its contents, your car, caravan or boat, antiques and collections are not included in deeming calculations.
|Deeming rates 2023/24||Single||Couple (combined)
where at least one of you get a pension
where neither of you get a pension
|0.25%||Up to $56,400||Up to $93,600||Up to $46,800 of each of your own and your share of joint financial assets|
|2.25%||Above $56,400||Above $93,600||Above $46,800|
The higher rate only applies to the amount of deeming assets above the threshold.
Calculate your estimated income using the current Centrelink deeming rates.
This calculator is not intended to be relied upon for the purposes of making a financial decision. You should consider your objectives, financial situation and needs, which are not accounted for in this information, before making any investment or financial decisions.
You are responsible for your own investment decisions and should obtain specific, individual advice from a financial services licensee before making any financial decisions.
Deeming is a key consideration in the Age Pension income test. When using this deeming calculator, it is assumed that you are an Australian resident and you are age-eligible.
Deemed income from your investment assets is calculated by multiplying the asset value by the applicable deeming rates.
Deeming rates are set by the Federal Government.
The deeming rates and thresholds effective at 1 July 2023 are:
- Singles - 0.25% on the first $56,400 of your total investment assets and 2.25% on your assets over $56,400.
- Couples - 0.25% on the first $93,600 of your total investment assets and 2.25% on your assets over $93,600.
Assets subject to deeming include:
- Superannuation assets.
- Savings accounts, cash and term deposits.
- Managed investments such as managed funds and insurance bonds.
- Debentures (money owed to you).
- Gold, silver or platinum bullion.
Assets not subject to deeming include:
- Your home.
- Home contents.
- Investment properties.
- Cars, boats and caravans.
This calculator does not allow for the 24 month assets test exemption for principal home sale proceeds.
What if I actually earn more or less than the deeming rates?
If you earn less, unfortunately there is no rebate or refund. But, if you earn more than the deeming rate has predicted, then you get to keep the difference and it’s not counted in your income stream for pension purposes.
How are the deeming rates set?
Before July 1st each year, the Federal Government looks at a range of factors, including economic forecasts, current interest rates, inflation etc., and uses this data in determining the deeming rates and asset value thresholds. While thresholds only tend to increase due to inflation, rates can go up or go down and are often influenced by official interest rates and the share market.
Generally new deeming rates and/or thresholds come into effect at the start of each financial year, however the Government can change deeming rates any time, especially when there is a major financial crisis and income expectations decrease severely.
Deeming, super and the pension working together
The deeming rate is important because it gives you greater certainty about your eligibility for the age pension. You know from the start what Centrelink calculates your future income to be for the year. With this knowledge, you can then plan how to best combine your super and other income, with the age pension (if you’re eligible) and make your life in retirement better.
What if my super does well, will it cut my age pension?
Centrelink uses your deemed income to determine your age pension, so if your super does better than the deeming rate, and provides good returns, you can take the extra out without it affecting your pension amount.
In fact, if you qualify for the full age pension, you can be deemed to receive an extra $204 per fortnight and still receive all your pension entitlements.
To make the most of your income in retirement, including your super, the age pension and any other financial assets you have, it is always best to chat to your super fund or a financial planner specialising in retirement income.