Changes to deeming rates on 1 May 2020

New Deeming Rates from 1 May 2020

The Government has announced that the deeming rates drop on 1 May 2020 as follows:

  • Lower tier rate drops from 1% to 0.25%
  • Higher tier rate drops from 3% to 2.25%

How income is deemed

Deeming is a set of rules used to work out the income created from your financial assets. It assumes these assets earn a set rate of income, no matter what they really earn. Financial assets include such things savings accounts and term deposits, managed investments, listed shares and securities, some income streams (superannuation) and some gifts you make.

Centrelink includes your deemed income as income under the income test.  Deeming is not related to the asset test.

Working out your deemed income

If you are single, the first $51,800 of your financial assets are deemed to earn 0.25%, with anything about this level being deemed to earn 2.25%.

If you are a couple and at least one of you get a pension, the first $86,200 of your financial assets are deemed to earn 0.25%, with anything about this level being deemed to earn 2.25%.

If you earn more than the deemed rates

If your investment return is higher than the deemed rates, the extra amount doesn’t count as your income. Just as having an investment that earns less than the deemed rates isn’t exempt from an applied level of deemed income.


This article is the opinion of the writer and does not consider the circumstances of any individual. This document has been prepared by Peter Keogh (Authorised Representative No. 253538 of Paragem Pty Ltd AFSL 297276) and is intended to be a general overview of the subject matter. The document is not intended to be comprehensive and should not be relied upon as such. We have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained in this document. No responsibility is accepted by Peter Keogh, Paragem or its officers.

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