Deeming Rates in 2026: How Centrelink Assesses Your Savings and Investments

Deeming applies to your financial assets — things like bank accounts, term deposits, shares, and account-based income streams. Instead of asking you to report the actual interest or dividends earned, Centrelink assumes your assets earn income at two different rates, depending on how much you hold:

• A lower deeming rate applies to financial assets up to a set threshold
• A higher deeming rate applies to financial assets above that threshold

The amount of deemed income calculated this way is then included in the income test used to work out how much of your payment you receive.

The threshold that separates the lower and higher deeming rate is:

• $66,800 for singles
• $110,600 for couples (combined)

From 20 September 2026, both deeming rates increase:

This means if you're single and hold $50,000 in financial assets, your deemed income before September 2026 would have been calculated using the 1.25% rate on the full amount. From 20 September 2026, the same $50,000 is deemed to earn 1.75% instead — a higher assumed income, even though your actual bank interest may not have changed at all.

For someone with financial assets above the threshold, both rates apply in tiers: the lower rate applies to the portion up to $66,800 (single) or $110,600 (couple), and the higher rate applies only to the amount above that threshold.

Deeming exists so Centrelink doesn't need to track the exact performance of every financial asset a pensioner or payment recipient holds. The trade-off is that if actual interest rates or investment returns are lower than the deemed rate, you can end up being assessed as earning more than you actually receive. Conversely, if real returns are higher than the deemed rate, deeming can work in your favour, since only the deemed (lower) amount counts toward your income test.

With deeming rates increasing in September 2026, anyone with financial assets is now being assessed on a higher assumed return than before — which can reduce the payment amount for people whose pension or allowance is calculated using the income test, even if nothing else in their financial situation has changed.

Deeming is most relevant to:

• Age Pension recipients whose payment is calculated primarily under the income test rather than the assets test
• Recipients of other income-tested payments where financial assets are counted, including some allowance-type payments
• Anyone holding meaningful savings, term deposits, shares, or account-based pensions/annuities

If your pension is calculated using the assets test rather than the income test — meaning your overall assets, not your assessed income, are the limiting factor — the deeming rate increase won't directly change your payment, since it's the income test calculation that uses the deemed amount.

1. Add up your total financial assets — bank accounts, term deposits, shares, and account-based income streams count; your home generally does not.
2. Check whether your combined financial assets are above or below the $66,800 (single) or $110,600 (couple) threshold.
3. If you're close to a payment cut-off point, be aware the deemed income calculated from your assets increased from 20 September 2026, which could reduce your payment slightly if you're assessed under the income test.
4. If you're unsure whether your payment is calculated using the income test or the assets test, check your Centrelink online account or contact Services Australia directly — this determines whether the deeming rate change is relevant to you at all.

Many pension recipients assume deeming only matters if they're actively earning interest or investment income. In reality, deeming applies regardless of what your assets actually earn — it's a assumed calculation, not a report of real income. This means even assets sitting in a low-interest transaction account are deemed to earn the standard deeming rate, not the lower real interest rate the account might actually pay.

Does deeming apply to my home? No. Deeming applies to financial assets such as bank accounts, term deposits, shares and account-based income streams. Your principal home is treated separately under the assets test, not the deeming rules.

If my real bank interest is lower than the deeming rate, can I ask Centrelink to use my actual interest instead? The rules described here are based on the standard deeming formula, which applies a fixed assumed rate rather than actual earnings, regardless of whether your real return is higher or lower. Any exceptions to this would need to be confirmed directly with Services Australia.

Will the deeming rate increase reduce every pensioner's payment? No — only recipients whose payment is calculated using the income test, and who hold financial assets subject to deeming, are affected. Pensioners assessed under the assets test are not directly affected by this specific change.