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Deeming rates

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. 

What are the current deeming rates for Centrelink?

Deeming rates 2022/23 Single Couple (combined)
where at least one of you get a pension
Couple (combined)
where neither of you get a pension
0.25% Up to $53,600 Up to $89,000 Up to $44,500 of each of your own and your share of joint financial assets
2.25% Above $53,600 Above $89,000 Above $44,500

The higher rate only applies to the amount of deeming assets above the threshold.

Deeming calculator

Calculate your estimated income using the current Centrelink deeming rates.

Deeming calculator
Use this calculator to see the deemed income from your financial assets. Centrelink uses deeming in their income test to work out how much Age Pension you are entitled to.
MyOur results
Deeming income
$XX
fortnightly
$X,XXX
yearly

Talk to your fund about turning your super into a regular income alongside your Age Pension payments.

Disclaimer

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.

Assumptions

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 2022 are:

  • Singles - 0.25% on the first $53,600 of your total investment assets and 2.25% on your assets over $53,600.
  • Couples - 0.25% on the first $89,000 of your total investment assets and 2.25% on your assets over $89,000.

Assets subject to deeming include:

  • Superannuation assets.
  • Savings accounts, cash and term deposits.
  • Shares.
  • 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.

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 $178 per fortnight and still receive all your pension entitlements.

Still unsure?

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.

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