Deeming rates: are they too high?

Like many retirees, Karen believes that deeming rates are simply too high, especially when the money is being held by a nursing home.


Q. Karen
What is the best avenue for protesting to the Government on the deeming rates? I am sick of the Government ripping everyone off!

I just put my 90-year-old dad in a nursing home and he had to sell his house to pay the RAD (Refundable Accommodation Deposit) of $450,000. Then I discover the Government are deeming that $450,000 being held by the nursing home as dad’s income. Surely that is a rip off?

A. The deeming rate on savings for retirees receiving an Age Pension can be unfair. The banks are quick enough to cut their rates on term deposits, whereas the Government is less likely to react with a reduction in deeming rates.

However, with regard to refundable accommodation deposits (RADs), these are assessable when calculating aged care fees, but they are not included in means test assessments when determining eligibility for a means-tested pension from Centrelink or Veterans Affairs. RADs are exempt under both the assets and income tests.

You can ask for a review of a decision about your Centrelink payments by completing a review of decision form.

All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

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