2020-10-31

Federal Government announces $600 million boost for pensioners

As seen on the August 2019 issue of The Philippine Sentinel

The Federal Government has announced it will spend $600 million on a pension boost for older Australians, under long-awaited changes to deeming rates.

The Government will promise up to $1,053 a year for part-pensioners and those who receive other federal allowances in a change to the rules on earnings from term deposits, shares and other investments.

Retiree groups have been urging the Government to cut the official deeming rate, which assumes how much a pensioner earns on private investments.

The lower deeming rate will decrease from 1.75 per cent to 1 per cent for financial investments up to $52,000 for single pensioners and $86,000 for pensioner couples, while the upper deeming rate will be cut to 3 per cent.

“It will mean more money in the pockets of older Australians,” Minister for Families and Social Services Anne Ruston said in a statement.

“Under the new rates age pensioners whose income is assessed using deeming will receive up to $40.50 a fortnight for couples, $1,053 extra a year, and $31 a fortnight for singles, $804 a year.”

Pensioners will see the extra money come into their bank accounts from the end of September, in line with the regular indexation of the pension. The payments will be backdated to July 1.

(First published in MSN News)


What is the Deeming Rate?

The deeming rate is the amount the government deems your income to be from your financial assets. … This calculation is used for the pension income assessment and can affect how much someone receives through their pension.

This calculation is used for the pension income assessment and can affect how much someone receives through their pension.

A pensioner can earn up to $172 a fortnight before their payments are reduced.

The deeming rate for singles is 3.25% for assets over $51,200 and 1.75% for those under that threshold – but more detail on this later.

(The Guardian)