Summary
Pension rates increase - refer Centrelink page
Assets test upper limits increase - refer Centrelink page
Income test upper limits increase - refer Centrelink page
Deeming rates drop - refer below
Centrelink age pension page - refer Centrelink page
Deeming Rates and income thresholds - a refresh…
The age pension decreases once the Centrelink accessed income exceeds a defined level - low threshold. For every dollar earned over this low threshold, the age pension decreases by 50¢, and ceases entirely once it reaches a cut-off threshold.
For single pensioners the lower threshold is $152 a fortnight with the cut- off threshold being $1697.20 a fortnight.
For couples, the combined low income threshold is $268 a fortnight with the cut-off threshold being $2597.60.
Over the years the income test has become more complicated by effectively having 3 types of income:
- Actual income received;
- Deemed income; and
- Adjusted actual income received.
The first category includes things such as:
- employment income,
- work-related fringe benefits,
- net business income,
- income distributed from trusts and private companies,
- amounts salary sacrificed as super contributions,
- net rental income and income received from boarders and lodgers.
The second category of deemed income was introduced to stop people artificially decreasing their income from financial investments. The most common type of financial assets counted for deeming include:
- bank, building society and credit union accounts;
- term deposits and debentures;
- managed investments;
- listed shares and securities; gold and other bullion; and
- superannuation account balances when the member is of pension age.
Rather than counting the actual income received from financial investments, an income is deemed to be earned. Where pensioners earn less than the deemed income they are worse off; where they earn more they are better off.
Before the recent change, the deeming rates used for singles were 3 per cent a year on the first $43,200 of financial assets and 4.5 per cent on the excess. For couples, the deeming rates were 3 per cent a year on the first $72,000 of combined financial assets and 4.5 per cent on the excess.
The new deeming rates applying now are 2.5 per cent on the lower threshold and 4 per cent on the higher.
