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New Deeming Rates Effective 1st of May

How does this impact your entitlements?
The new Centrelink deeming rates are changing on Friday 1st May. Some people will benefit from these new rates as Centrelink will deem they are receiving less income. If this is the case they could receive a higher pension amount. The government has stated that 565,000 Age Pensioners will be affected, receiving an average increase of $105 in the first year after the change.

So what do you need to do?
If you are already receiving the age pension the good news is you don’t need to do anything.  The Government will automatically apply the new deeming rates from the 1st of May and adjust your payments accordingly. 

On the other hand, if you weren’t eligible for the Age Pension or the Commonwealth Seniors Health Card you might now find your situation has changed. In this case you should check your entitlements as you might now be eligible to apply. 

The following case study shows a couple that can benefit in this way.

David and Emma
David and Emma both work part-time and between them earn an annual accessible income of $67,400 (this is net of the work bonus entitlement). They have accessible financial assets of $725,000. Prior to 1 May 2020 their financial assets deemed income of $17,440 plus their accessible income $67,400 resulted in a total income of $84,800 which pushed them over the couple’s maximum of $82,035.  As a result, they were not eligible for the age pension.

From 1 May 2020 their deemed income will be $14,588.50. This plus their accessible income of $67,400 results in a total income of $81,988.50.  They are now just under the age pension threshold.  

David and Emma are eligible to receive a very small amount of age pension but in addition, they will now also be eligible to receive the Pension Health Card and all the valuable discounts that go with that.  

The table below outlines the new rates:

  SINGLES COUPLES

Lower Limit – 0.25%

(Reduced from 1%)

Applies to the first $51,800 of financial assets Applies to the first $86,200 of combined financial assets

Upper Limit – 2.25%

(Reduced from 3%)

Applies to all financial assets above $51,800 Applies to combined financial assets above $86,200

 

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