Deeming Rates – Increase Centrelink Income Test

The deeming rates will be increased by another 50 basis points from 20 September 2026.  The rates will now be 1.75% (increased from 1.25%) and 3.75% (increased from 3.25%).

The increases are in line with the Government’s policy that the deeming rates for the Centrelink Income Test should be steadily increased to match available investment earnings rates.  Consequently, there is a strong likelihood that the deeming rates will be further increased on 20 March 2027.

Increasing deeming rates has the effect (other things being equal) that a greater amount of income will be counted as arising from financial assets thereby reducing the age pension entitlement (for those retirees who are in receipt of the age pension and to whom the incomes test applies).

However, the other things are not equal as the age pension will also increase on 20 September 2026 (in line with the usual indexation of the age pension every 6 months).

The deeming rates are determined by the Government having regard to the advice of the Australian Government Actuary.  The legislative instrument specifying the rates, which are to apply, is the “Social Security (Deeming Threshold Rates) Determination (No 2) 2026” (reference F2026L011083) made by the Minister for Social Services.