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Asset Test Eased for Pensioners

Posted February 13, 2013

Anna Burke has welcolmed the Gillard Government's announcement that pension deeming rates will be reduced from next month, allowing part pensioners to receive more in their fortnightly pension payments.

Deeming rates reflect the standard rates of return that pensioners can earn from their financial assets. They are used to determine how much pensioners receive under means testing rules.

Ms Burke said the changes, which begin on March 20 will provide local pensioners and other income support recipients with more certainty about their future payments.

"On average local part-rate pensioners can expect to receive a pension increase of somewhere around $6.80 per fortnight," Ms Burke said.

"The current deeming rates have been an issue for some pensioners in our community.

"It's an issue that they have raised with me and that I have raised with the government on their behalf. I'm pleased that these concerns have been listened to and responded to.

"The reduction in the deeming rates will help take some of the financial pressure off local pensioners and people receiving government payments.

The lower deeming rate will decrease from 3 per cent to 2.5 per cent for financial investments up to $45,400 for single pensioners or $75,600 for a couple. The upper deeming rate will decrease from 4.5 per cent to 4 per cent for balances over these amounts.

Ms Burke said changes to deeming rates were generally made at the pension indexation points to minimise disruption for pensioners.

"This change comes on top of another increase to the pension under the Australian Government's new indexation system," Ms Burke said.

"From March 20 this year, pensioners in Chisholm will receive both this indexation increase and the new Clean Energy Supplement.

"The Gillard government's historic pension reforms have already delivered increases to the maximum pension rate of $172 per fortnight for singles and $182 per fortnight for couples.

Payments affected by the deeming rate include means tested payments, such as the Age Pension, Service Pension, Disability Support Pension and Carer Payment, income support allowances and supplements such as the Parenting Payment and Newstart. 

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