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Deeming rates to be lowered

Post Date:10/11/2008 | Author: Office

The Government has announced it will lower the social security Income Test deeming rates. This is to reflect the recent reduction in interest rates and the impact the global financial crisis is having on the returns from pensioner’s investments.
From 17 November 2008, the deeming rate will change:

  • From 4% to 3% for the first $41,000 of a single pensioner’s financial investments ($68,200 for couples), and
  • From 6% to 5% for balances over these amounts.

These changes will affect payments including means tested pensions (such as the Age Pension, the Disability Support Pension and Carer Payment) and various income support allowances and supplements.

If you think you might be affected by this or know some that is please contact our office 1300 882 456 for further information and assistance.

While this will not impact pensioners that are already paid at the maximum rate, those with financial investments (eg term deposits, shares and managed investments) that are currently eligible for a part-pension, may receive an increase in their pension entitlement.
For example, a single homeowner with $100,000 in financial investments currently receives an annual Age Pension of $14,128.601. Under the new deeming rates, this person will receive an annual pension increase of $400.
Clients already receiving a part-pension should automatically benefit from the deeming rate changes.
Although not deeming related, your pensioner clients will also start receiving from 8 December 2008 a lump sum payment of $1,400 ($2,100 for couples) as part of the Government’s Economic Security Strategy.

Media Release, Jenny Macklin MP, Deeming rates to be lowered, 9 November 2008.

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