What are Centrelink deeming rates?

Centrelink deeming rates are set percentages used to estimate earnings on your financial assets for the income test. They do not reflect your actual returns. From 20 March, the lower rate is 1.25% and the upper rate is 3.25%. The rates apply in tiers, which helps Services Australia assess your Age Pension.

How does March 20 indexation interact with the deeming change?

Indexation lifts base payments and thresholds on 20 March, but higher deemed income can reduce part pensions under the income test. The net effect depends on your asset levels and which test applies to you. Some will see a small rise, others little change, and some may face lower fortnightly payments.

Who is most at risk of part pension cuts?

Income-tested part pensioners close to eligibility cut-offs face the greatest risk. If deemed income rises due to the new rates, their assessed income can exceed free areas, which reduces the payment. Couples with larger financial asset balances and singles holding significant cash or term deposits should review their position early.

What can I do to prepare for the Age Pension changes?

Before 20 March, update your Centrelink details, confirm asset balances, and check partner information. Build a short-term cash buffer, review super drawdowns, and consider staggering term deposit maturities. If unsure, seek guidance from a licensed financial adviser to model different outcomes and plan for any reduction in payments.

Global Market Insights

February 25: Centrelink Deeming Rates Hike to Squeeze Part Pensions

ByHuzaifa Zahoor February 24, 2026February 24, 2026

Centrelink deeming rates will rise on 20 March, lifting the lower rate to 1.25% and the upper rate to 3.25%. The change lands the same day as March 20 indexation to pensions and supplements. While many will see higher base payments, income-tested part pensioners could face reduced entitlements. Advisors warn some may lose eligibility. We explain how deeming works, who is most exposed, and what steps to consider now, so you can protect cash flow and plan for Age Pension changes.