Deeming rates and calculator for the Age Pension income test

In recent years, deeming rates shifted from being an arcane concept few people knew or cared about, to a hot button issue for retirees struggling to make ends meet at a time of rising interest rates and cost-of-living pressures.

The reason is this.

Under the deeming rules, you are ‘deemed’ to earn a certain annual rate of return on your financial assets, regardless of the rate of return you actually earn. Your returns could be higher or lower than the deeming rates. In the case of bank deposits, the returns you are earning may be lower than the current deeming rates while returns from superannuation have been higher. Why does this matter? Because it could affect the amount of Age Pension you receive and the amount you pay for residential aged care.

When deeming rates increase, a larger amount of deemed income is counted under the Age Pension income test. For part pensioners assessed under the income test, that can reduce the payment they receive. Full pensioners and people assessed under the assets test are not affected by the rate change.

Age Pension eligibility

Deeming is used to determine your eligibility for the Age Pension under the income test. The other requirements are passing the assets test, reaching Age Pension age and qualifying as an Australian resident.

Deeming rules are used by Services Australia (via Centrelink) for income test calculation purposes. Centrelink also applies the same deeming rates and thresholds when assessing eligibility for the Commonwealth Seniors Health Card (CSHC).

Common types of financial assets that deeming rates apply to include:

• Account-based super pensions
• Savings accounts and term deposits
• Shares
• Managed investment such as managed funds and insurance bonds
• Debentures

Deeming doesn’t apply to the family home and other property assets.

How deemed income is calculated

The deemed income from your investments is calculated by multiplying their current value by the relevant deeming rates. Different deeming rates apply depending on:

• Your living arrangements (whether you live alone or with a partner)
• The value of your investment assets
• Whether or not you (or your partner) currently get the Age Pension.

Once your deemed income is calculated, the amount is then added to any other income you’ve earned from all other sources as part of the Age Pension income test. If your income exceeds the income test thresholds, your Age Pension entitlement will progressively reduce until it cuts off completely.

What are the current deeming rates?

The deeming rates and thresholds that apply from 20 September 2026 to 19 March 2027 are listed in the table below.

Deeming calculator