Retirement Income

Courtney Allan

Good news for pensioners: You could be set to receive an extra $3,875

Good news for pensioners: You could be set to receive an extra $3,875

If the federal government goes ahead with changes to asset testing, pensioners could be thousands of dollars better off. The federal government has been facing pressure from seniors’ groups and the opposition due to high rates for the pension.

These deeming rates can be as high as 3.25 per cent, but the rate is highly dependent on an individual’s circumstances and the rates were last set in 2015.

However, due to the Reserve Bank of Australia cutting the official cash rate five times to a new low of one per cent, this change is set to be benefiting seniors and their bottom line.

Social Services Minister Anne Ruston said that the government is close to making a decision on lowering the deeming rate, according to 9News.  

"(I) have sought some pretty detailed advice which I'm considering and I'm consulting with my other cabinet colleagues," she told ABC radio today.

"We will be making our decision imminently."

While 75 per cent of pensioners aren’t impacted by this issue, the minister has acknowledged that the remaining 25 per cent that are impacted are impacted heavily by this decision.

"There are about 627,000 people affected by this," she told the ABC.

"Pensioners are really angry about this. They are furious and they've got every right to feel that way."

At the moment, for single pensioners, the first $51,800 of financial assets are impacted by a rate of 1.75 per cent and then anything over that is impacted to earn 3.25 per cent.

For couples, of which at least one receives a pension, the first 86,200 of combined financial assets has a deeming rate of 1.75 per cent and anything over $86,200 is deemed to earn 3.25 per cent.