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Knowledge & Clarity: Deeming Rates likely to change
Deeming Rates Likely to change March 20, 2015
Finally some good news on the pension front. If you receive a part-pension as a result of the income from your financial investments then you could be in for a pay rise, come March 20, 2015. The word is Deeming rates are likely to be decreased to better reflect the low interest rates currently on offer for term deposits and savings accounts.
What are Deeming Rates?
Deeming rates are used to assess income from financial investments for the purposes of determining Centrelink payments. Deeming rates reflect the rates of return that people can earn. If income support recipients earn more than these rates, the extra income is not assessed. Deeming applies to most financial investments including; bank and term deposits, shares and managed funds, superannuation, account based pensions and even loans to family members. The few exceptions are real estate and business assets.
What are the Deeming Rate changes?
Expectations are that the Government will announce that from 20 March, the lower deeming rate will drop from 2 per cent to 1.75 per cent for financial investments up to $48,000 for single pensioners and $79,800 for pensioner couples. The upper deeming rate will decrease from 3.5 per cent to 3.25 per cent for balances over these amounts.