More than five million Australians receiving social security payments are now receiving a modest but useful increase to their fortnightly incomes, with routine indexation adjustments coming into effect today, alongside changes to deeming rates.
The Federal Government said recipients of the full single rate of the Age Pension, Disability Support Pension or Carer Payment are likely to receive a $22.20 increase per fortnight, which Minister for Social Services, Tanya Plibersek said is now $5,545 higher than when Labor came to government in 2022.
Following the changes, the new Age Pension rates before tax total $1,200.90 per fortnight for singles and $905.20 each for couples, or $1,777.00 combined. These figures include the basic rate, pension supplement and energy supplement. Higher combined payments may apply where couples live apart due to ill health.
People receiving Commonwealth Rent Assistance, JobSeeker, ABSTUDY for those aged 22 and over, and Parenting Payment will also see higher payments.
Changes to deeming rates – used to estimate income from financial assets when calculating social security eligibility – also take effect today. Introduced more than 30 years ago, deeming is intended to provide a simplified way of assessing income from savings and investments to help ensure support is targeted to those most in need.
Following advice from the Australian Government Actuary (AGA), the Government has agreed to increase deeming rates for the first time under the AGA’s formal assessment process.
Under the new settings, the lower deeming rate will rise to 1.25% for financial assets below $64,200 for singles and $106,200 for couples combined. The upper deeming rate will increase to 3.25% for assets above those thresholds.
The Government said the changes are consistent with its commitment that deeming rate adjustments would be gradual. It is only the second time the rates have been altered since Labor came to office, after they were frozen during the COVID-19 pandemic. The new levels remain below historical averages, with the AGA advising they are achievable through common investments such as standard savings accounts at major banks.
Minister Plibersek said the combined changes were designed to strengthen support while maintaining fairness in the system.
“Thanks to indexation more than five million Aussies should expect to see a boost to their payments,” she said.
“To make sure our social security system delivers value for taxpayers it must be grounded in fairness, which is why we have made responsible adjustments to deeming rates.
“We’ll continue to make sure the system is there to support those who need it most, ensuring that everyone can make ends meet and no one gets left behind.”
To qualify for the Age Pension, Australians must generally be at least 67 years old and meet residency requirements, including having lived in Australia for at least 10 years.
Payments are subject to both income and asset tests, with Services Australia calculating entitlements based on whichever produces the lower payment. While the family home is exempt from the assets test, other assets such as superannuation balances once pension age is reached, vehicles, investment properties, savings and valuable household contents are included. Gifts above allowable limits may also be counted as assets for up to five years.
Asset thresholds vary depending on home ownership status. A single homeowner can hold up to $321,500 in assessable assets and still receive the full pension, with payments cutting off entirely once assets exceed $714,500. For homeowner couples, the full pension threshold is $481,500 combined, tapering to a cut-off at $1,074,000.
Higher limits apply to non-homeowners. A single non-homeowner can hold up to $579,500 and receive the full pension, while couples can hold up to $739,500. Part pensions are available above these thresholds until payments cease entirely at $972,500 for single non-homeowners and $1,332,000 for couples.
The amount an individual receives also depends on their personal circumstances, including whether they are single or partnered. If a person has a partner, income and asset information for both members of the couple must be provided.
For those still working, employment income can affect pension rates, and recipients are required to report any earnings for themselves or their partner, even if the amount is below the income cut-off point. Payslips are not routinely required unless specifically requested.
Changes in relationship status, or income and assets held outside Australia, can also influence payment levels. In some cases, recipients may choose to receive their payment weekly or apply for an advance payment depending on their situation.
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