Retirement
‘Manifestly unfair’: Age pension deeming rate
1 May’s deeming rate change for pensioners is not enough to combat the grip of the COVID-19 health and financial crisis, an advocacy group has warned.
‘Manifestly unfair’: Age pension deeming rate
1 May’s deeming rate change for pensioners is not enough to combat the grip of the COVID-19 health and financial crisis, an advocacy group has warned.

Just last week, the upper rate for savings and investments balances above $51,800 for a single pensioner fell from 3 per cent to 2.25 per cent, while the lower rate for savings and investments below $51,800 fell from 1 per cent to 0.25 per cent.
National Seniors Australia has previously welcomed the change of rates, but chief advocate Ian Henschke said that in the current COVID-19 context – where the official cash rate is at the record low of 0.25 per cent and billions of dollars of value has been wiped off the stock market – the “latest deeming rate cut is simply not enough”.
“Mayday is the international cry for help when in distress, and that’s how pensioners feel this May day because once again this latest deeming rate cut is simply not enough,” Mr Henschke said.
He highlighted bank deposit rates being at an all-time low, stock market crashes, slashed dividends and vanishing rental returns to illustrate his point.

Despite acknowledging the drop to 2.25 per cent, Mr Henschke queried: “Where do you find a safe place to get that sort of return?”
“Remember you’re deemed to be earning that amount, and your pension is cut accordingly by 50 cents in the dollar for every dollar earned above the threshold.”
According to National Seniors Australia, the rate is “manifestly unfair” and hurts nearly 1 million Australians – more than 500,000 of whom are aged pensioners.
And the 2.25 per cent rate is nowhere near what would be offered to anyone walking into a bank.
Mr Henschke said the deeming rate was too high, “even before the full impact of the COVID crisis hit home”.
Back in March, former treasurer Peter Costello had called out the deeming rate as too high, arguing that “the current rate was pushing pensioners into riskier investments, and that was a problem”, the advocate flagged.
“The current state of the sharemarket and property market shows just how risky the investment environment is outside of a government-backed term deposit,” he continued.
“If it says you can earn 2.25 per cent, then it should offer an investment that gives that return.”
About the author

About the author


Retirement Planning
Majority of Australians anxious about retirement as super knowledge gaps persist, report finds
A new study by Aware Super has revealed that a significant majority of Australians aged 45 and over are feeling anxious about retirement, with nearly nine in ten respondents concerned they will run ...Read more

Retirement Planning
AMP’s MyNorth Lifetime boosts financial security and retirement income
AMP has reported that its MyNorth Lifetime retirement income solution is delivering significant financial benefits to retirees, with an average uplift of 50% in total income. Read more

Retirement Planning
Retirement living sector calls for planning reforms amid declining construction confidence
The Retirement Living Council (RLC) is urging governments to streamline planning systems to boost housing supply, following a decline in confidence in age-friendly construction activity. Read more

Retirement Planning
New laws to boost women's retirement savings through paid parental leave
The Australian Parliament has passed new legislation that will see superannuation guarantee contributions paid on the Commonwealth Government's Paid Parental Leave (PPL) scheme. Read more

Retirement Planning
Planning systems under scrutiny as Australia's ageing population grows
The Retirement Living Council (RLC) has called for governments to address planning system shortfalls in preparation for Australia's ageing population, following the release of new data from the ...Read more

Retirement Planning
Retirement Living Council calls for focus on seniors' housing as population ages
The Retirement Living Council (RLC) has urged governments across Australia to prioritise age-friendly housing solutions in response to new data revealing an ageing population. Read more

Retirement Planning
Macquarie University study reveals benefits of guaranteed income in retirement
A new study by Macquarie University's School of Psychological Sciences has found that mental health, enjoyment, and financial security are key benefits of incorporating guaranteed income and annuities ...Read more

Retirement Planning
Retirement villages offer affordable housing amid market crisis, study finds
Retirement villages are providing a significantly more affordable housing option for older Australians compared to the traditional property market, according to new data released today. Read more

Retirement Planning
Majority of Australians anxious about retirement as super knowledge gaps persist, report finds
A new study by Aware Super has revealed that a significant majority of Australians aged 45 and over are feeling anxious about retirement, with nearly nine in ten respondents concerned they will run ...Read more

Retirement Planning
AMP’s MyNorth Lifetime boosts financial security and retirement income
AMP has reported that its MyNorth Lifetime retirement income solution is delivering significant financial benefits to retirees, with an average uplift of 50% in total income. Read more

Retirement Planning
Retirement living sector calls for planning reforms amid declining construction confidence
The Retirement Living Council (RLC) is urging governments to streamline planning systems to boost housing supply, following a decline in confidence in age-friendly construction activity. Read more

Retirement Planning
New laws to boost women's retirement savings through paid parental leave
The Australian Parliament has passed new legislation that will see superannuation guarantee contributions paid on the Commonwealth Government's Paid Parental Leave (PPL) scheme. Read more

Retirement Planning
Planning systems under scrutiny as Australia's ageing population grows
The Retirement Living Council (RLC) has called for governments to address planning system shortfalls in preparation for Australia's ageing population, following the release of new data from the ...Read more

Retirement Planning
Retirement Living Council calls for focus on seniors' housing as population ages
The Retirement Living Council (RLC) has urged governments across Australia to prioritise age-friendly housing solutions in response to new data revealing an ageing population. Read more

Retirement Planning
Macquarie University study reveals benefits of guaranteed income in retirement
A new study by Macquarie University's School of Psychological Sciences has found that mental health, enjoyment, and financial security are key benefits of incorporating guaranteed income and annuities ...Read more

Retirement Planning
Retirement villages offer affordable housing amid market crisis, study finds
Retirement villages are providing a significantly more affordable housing option for older Australians compared to the traditional property market, according to new data released today. Read more