Pension boost is unlikely to help many older Australians

Freedom of Information documents reveal the change to deeming rates is insignificant.

Pension boost unlikely to help many

It took the Government a long time to come to the party on changing deeming rates, but Freedom of Information (FOI) documents reveal that those changes will only deliver a paltry windfall to most of those affected by the changes.

At the time, the Government was spruiking that its changes would deliver an extra $800 a year to affected pensioners, but the FOI documents sourced by The New Daily show that only a handful of people would receive anywhere near this amount of money.

Most single pensioners with investments that attracted deeming rates would be just $5 a week better off with the new deeming rates, or $249 a year. The average boost delivered for couple is $3 a week, or just $156 a year.

According to the FOI documents, nearly half of pensioners who receive the couples rate will secure less than $130 a year.

The data shows that less than one per cent of the one million pensioners who are better off under the changes will receive the full $800 a year boost touted by government ministers at the time the changes were announced.

Worse still, the number of pensioners on the couples rate who will secure this level of extra Age Pension payment will total just 191 couples across Australia.

Also, because the payment is being backdated to July, it may appear more generous in the first payment, due this month, but will then reduce to the lower payment that will be paid fortnightly.

Many older Australians, who rely largely on the Age Pension to fund the majority of their retirement income, believe that deeming rates are unfair. This is because the actual returns on savings accounts and term deposits are often lower than the Centrelink deeming rates. This means that they are deemed to be earning more income from their savings than they actually are and, as a result, their Age Pension payment is reduced.

Do the deeming rate changes affect your pension payment? If so, how much extra are you expecting per fortnight? Has the Government overpromised and underdelivered in this area?

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

RELATED ARTICLES





    COMMENTS

    To make a comment, please register or login
    bluebottle
    11th Sep 2019
    10:16am
    As a home-owning couple with a small amount of super, we're nearly on the full pension. This change gives us a combined extra $20 a fortnight.
    Not a lot but it helps. Means our deemed income is now almost zero.
    Kosmo
    11th Sep 2019
    10:56am
    So clear, it’s it funny! So Who will get anything? And why can they tell us exactly what we are getting? Specially pensioners that are renting!!!
    Tood
    11th Sep 2019
    11:03am
    This issue is not worth the time or money that it's taking up, a complete furfy, not worth a cracker!
    McDaddy
    11th Sep 2019
    11:21am
    Deeming was never really that big of an issue, there are better ways to help.
    Red 13
    11th Sep 2019
    11:22am
    Typical betrayal of Pensioners by this miserly surplus at all costs obsessed government. To think we voted for this garbage makes my blood boil. Wake up fellow Pensioners we are being dudded big time.
    Farside
    11th Sep 2019
    12:44pm
    you have not been betrayed ... as the good book says "for whatever a man sows, this he will also reap". Choices have consequences.
    TREBOR
    11th Sep 2019
    6:22pm
    Your choices or the choices of others, given that we live in a country where a significant percentage thrive on inflicting harm on others to prop up their own failed egos......???

    Most such are found in positions of 'authority' - in a nation that generally does not require 'authority' but for the majority requires genuine governance of and by their servants .......
    Farside
    12th Sep 2019
    12:43am
    point taken TREBOR but in this instance old mate Red said "we voted" so it would be his choice rather than the choices that voted differently.
    floss
    11th Sep 2019
    11:43am
    Some one voted the L.N.P.in what did you expect.It is on the cards they will lie there way in at the next election so just get used to it.
    sunnyOz
    11th Sep 2019
    12:14pm
    floss - ANY party in government will be no better. Labor will not be the panacea to do anything far better.
    TREBOR
    11th Sep 2019
    6:26pm
    So true - Labor have 'bigger fish' to fry - their Great Equalisation Revolution, meaning continued policies of exclusion and of preference for specified groups in order to attain 'equality', is far more important than mere proper governance of all equally..... (read that again and weep)...

    Just like 'controlling male v female violence in society as a first step in controlling violence throughout society' - such a 'revolution' NEVER gets beyond Stage One (in 27 years it has in fact gone backwards with an escalation in violence BETWEEN women and men, and then via government agency intrusion, in many ways), but becomes calcified at that stage - therefore it is fundamentally impossible to ever attain genuine Equality - just Preference as the established law of the land....

    Never going to work .....
    Hoohoo
    16th Sep 2019
    4:33pm
    Please, TREBOR, not that boring BS again?

    But I agree, SunnyOz, Labor are as useless as the LNP at the moment.

    Maybe our problem lies in that the major political Party leaders are always old, white men? But what Party in their right mind would dare to try to have a female leader elected after the persecution of Prime Minister, Julia Gillard?

    None of them have the guts, but they do have the balls. Trouble is, balls are soft, weak & easily injured. What they need is some vaginas! They're tough as & they can truly deliver!
    johnp
    11th Sep 2019
    11:46am
    Yep, Both LNP and Labor are like the nazis. LNP got into power by lying, cheating, bullying, conniving !! Labor is like the guards in hogans heroes; bumbling idiots who lost the election by not being able to explain their objectives clearly etc.
    keandha
    12th Sep 2019
    4:24pm
    "Like the nazis". How many Australians have been transported to Death Camps and killed to date. Silly comparisons like this are an insult to the memories of people who suffered under the Nazi regime.
    Anonymous
    13th Sep 2019
    11:45am
    what an utterly ignorant comment to compare labor and liberal to nazis -
    Misty
    15th Sep 2019
    10:18pm
    Labor lost the election for many reasons, Clive Palmer and his misleading ads, the LNP lies about the electric cars, people's utes being taken off them etc, their ads, "The bill you can't afford", but most of all because of the stupidity and ignorance of the Australian voters who changed their minds on election day. They did this because they didn't bother to find out who their Federal member was and just voted for the first person at the top of the voting paper, This was the explanation given by people who were interviewed as to who they voted for and why they changed their minds from the answer given to previous polsters. These would also probably be the people who will complain the loudest now about the govt they helped vote back in.
    Hoohoo
    16th Sep 2019
    4:55pm
    Nazis were way more capable & organised than our idiot politicians - trouble is the Nazis were genocidal fascists. If only our parliament had half the brains & resolve of the Nazis. The only thing our government has controlled well is the propaganda machine (with the help of the Murdochs & Alan Jones's from the media AND the people duped into believing they are watching "The News" not "the opinions").

    But I do consider that the Global government (Capitalism) is moving steadfastly towards Fascism. And with all that surveillance!!! Who will dare step out of line or speak up?

    Regarding Labor's demise at the last election, you're spot on, Misty. I saw a Tweet from Josh Frydenberg saying that Labor, the Unions & the Greens will introduce Death Duties. At the end of the tweet he asks "share with all your friends". I wish there were legal consequences for politicians who blatantly lie. Instead, he's been promoted, like a good soldier for the cause. The irony is he's Jewish.
    GD
    11th Sep 2019
    11:59am
    So the only ones that will benefit are the ones that are benefiting now, like politicians.
    Farside
    11th Sep 2019
    12:46pm
    politicians are just doing as well as others on six figure incomes ... the top 10% are benefiting very nicely
    TREBOR
    11th Sep 2019
    6:29pm
    Real salary package is around $2.5M pa to run a politician with all found... good work if you can get it ......
    TREBOR
    11th Sep 2019
    6:29pm
    .. most of it is in tax free extras .....
    johnp
    12th Sep 2019
    10:02am
    With all their perks, meal and travel allowances etc the pollies basically dont have anything to spend their salary on !!
    Tricky
    11th Sep 2019
    12:17pm
    The government is absolutely hypocritical about DEEMING RATES on term deposits, they have no intention on looking after older Australians whether Full or Part Pensioners.
    Billv
    11th Sep 2019
    12:28pm
    That's a big yes. There is no incentive to invest for any future expenses that may or will occur
    Farside
    11th Sep 2019
    12:48pm
    there is no incentive for the government to change approach to pensioners, few will change their votes regardless what actions the government takes
    Hoohoo
    16th Sep 2019
    5:15pm
    They keep voting for the LNP because they're afraid of Death Duties & Labor's so-called poor ability to manage the economy. Even though it was a lie by Frydenberg about Death Duties & the fact this government has tripled debt while preaching small government & trickle-down economics. (The Govt only talks about a surplus in regard to the current account, not Australia's overall debt, which has tripled under their watch. No matter, it still works well for voters who have already proved they are easily duped by these charlatans).

    Labor actually saved Australia from Recession during the GFC while Turnbull (in Opposition), screeched that Austerity was the only way the Australian Share market would keep afloat. Yes, he actually talked down our economy during a time of potential economic disaster. I noted it at the time for posterity - Malcolm Turnbull: a traitor to Australia. Anyone who knows anything about the Share Market knows that confidence is a crucial element, yet he actively undermined confidence in the market.
    Billv
    11th Sep 2019
    12:26pm
    Well I had a small increase for about a month or two and then or the last two payments a big drop in my pension back to just a few dollars above what I was receiving prior to the so called increases. So since my wife passed on I dropped from $800 to $194 now. Because most of my investments a set I'm now doing part time work which makes up half of what I lost and that is seasonal. So much for a happy retirement. Deeming rate changes appear to have made me worse off.
    McDaddy
    11th Sep 2019
    1:04pm
    A drop of that much means you are probably on the Assets test as all are now in your name only. Deeming rate changes don't apply to you most probably
    Billv
    11th Sep 2019
    1:19pm
    Yes, they did put me on asset test. which hasn't helped me at all
    McDaddy
    11th Sep 2019
    1:25pm
    To receive $194/ftn Pension for a Single homeowner you have assets apart from the value of your house of app $510k, time to use them to help fund your retirement, when you can access them. Good news about being asset tested is that part time work your doing won't lower your Pension.
    Billv
    11th Sep 2019
    2:07pm
    That is correct, have super and some shares etc so on part pension.
    Spud
    11th Sep 2019
    12:30pm
    Im 67 oap wife 64 . Projected long term bank interest is . 75 % on our money . Even at present interest we use our savings every few months just to pay bills . So it is obvious to blind Freddy that when our bank term is up we will be pre paying our funeral expenses plus I might replace my ,well cared for, car as it’s almost 20 yrs old . My wife has to go to 66 1/2 yrs of age before she can get a pension. And yes we know about Newstart lol! I would not put my wife , who is in not great health , through the jumps and hoops so we make do but where is it fair to have a deeming rate of 3% when the bank gives .75% ? Yes I know there are products out there that give a bit more than the deeming rate but I view them as little more secure than putting money through the pokies ! First mortgage lending at our age is not a smart move .
    McDaddy
    11th Sep 2019
    1:03pm
    Why don't you put that bank money into Wife's Super?
    LFC
    11th Sep 2019
    1:47pm
    Good question McDaddy
    Rae
    11th Sep 2019
    1:48pm
    Yes McDaddy is right. Buy a new car, fix up the house and put the money in the super while you still can. No point losing money as inflation eats into term deposits.
    Sundays
    11th Sep 2019
    2:37pm
    Spud, if you approach your bank and ask for discretionary interest rate they will usually give you a little more than the standard rate. Your wife can add to super up until she turns 65. Choose an industry fund. Many eg QSuper allow anyone to contribute these days. That way her super is not counted by Centrelink until she is of pension age. Your own pension may increase. Of course, nothing stopping your wife from accessing her super tax free if you need it
    Big Kev
    11th Sep 2019
    2:14pm
    Here goes this govt again. Why were people taken in to re-elect it. $5 pension increase while their first order of business was $5000 tax cuts to people on $2000 per year. Im in that lucky minority that pay tax on my super. So while our net payment is less than income test, our gross exceeds it. This means we miss out on health care card by $1720 peryear which cost us $9000 per annum. Maybe instead of Scomo he should be called Screwyou!
    The deeming rate is still far in excess of what our money earns.. And the interest rate for aged care is incredibly high.for unpaid bonds.
    McDaddy
    11th Sep 2019
    2:51pm
    Sounds like you're doing alright then mate. I think you are in the wrong forum to be whining about deeming rates. Defined Benefit Super? Income more than $81k combined, not deemed. Fair Dinkum
    Paddington
    15th Sep 2019
    8:33pm
    You can have a health care card if your combined income for a couple is less than nearly $87,000 per year so you are saying you have nearly $90,000 income.
    Why would you not be ecstatic with that?
    TREBOR
    11th Sep 2019
    3:26pm
    No real change for me - cashless society you know....
    mIKER
    11th Sep 2019
    3:31pm
    This Government will do nothing about Deeming Rates, as it is but one way to protect the Surplus, we have to have.
    However, for all the retirees that voted for them to protect their Franking Credits, that they haven't paid tax on, they must be very happy that they not only don't contribute but continue to get a hand out from the LNP.
    Farside
    11th Sep 2019
    3:47pm
    of course they are happy to continue to receive their franking credit handout ... winners are grinners.
    TREBOR
    11th Sep 2019
    6:16pm
    Again - no valid difference between franked and unfranked credits - each is part of taxable income and each should render the exact same result in terms of tax liability.... anyone with a zero or under the lower limit tax liability would have still received franking back under Labor's proposal, since it is tax paid in advance.....same as PAYG ...

    No harm done from abolishing franked credits ..... unless it is cutting out someone's rort... if it is 'tax effective' it is not paying tax..... ergo - there is something wrong with it .... given that the same total amount paid to someone without franked credits renders them liable to taxation.....

    Someone is robbing the till...
    gerry
    11th Sep 2019
    3:34pm
    I,m spending like mad ,I,m not going to let inflation beat me
    "oh the young people cant buy houses" they say ,,What! at 26 ,the worlds gone mad ,They want their smashed avacados ,film at the weekend, cellphones and holidays on the day they lave school .I,m not subsiding them any more
    Farside
    11th Sep 2019
    3:48pm
    good for you gerry, spend that coin, the economy needs it.
    TREBOR
    11th Sep 2019
    6:16pm
    Don't forget the annual offshore holiday and the Land Cruiser to take the kids to school - something we oldies who slaved can only dream about...
    Hoohoo
    16th Sep 2019
    5:28pm
    I think a lot of young people believe the world's going to shit in a hand basket, so they live for the moment, rather than scrimp & save like we did, secure in the knowledge the world would be fair & stable by the time we reached retirement.

    Personally, I don't blame them in the current world climate (pun intended) but I won't tolerate them whingeing when they don't have everything they want. It's almost as hard to cop as wealthy people whingeing they don't get every benefit being offered to others, because they earn too much. Intolerable!
    gerry
    11th Sep 2019
    3:34pm
    I,m spending like mad ,I,m not going to let inflation beat me
    "oh the young people cant buy houses" they say ,,What! at 26 ,the worlds gone mad ,They want their smashed avacados ,film at the weekend, cellphones and holidays on the day they lave school .I,m not subsiding them any more
    Intellego
    11th Sep 2019
    3:50pm
    Trust the bumbling Lieberal Nasty Party to bungle this - as they do everything else.
    Anonymous
    13th Sep 2019
    11:47am
    Yet they keep getting re-elected and long may it continue
    ronnieb
    11th Sep 2019
    5:21pm
    I get p****d off when i read oh so often of somebody complaining they have had their oap reduced because they have $600k or more in assets over and above their home. What on earth are they expecting? Use your bloody dividends and your franking credits and your "meagre" interest to subsidise your lower pension.
    Get a life you guys. If you had voted Labor in you might have lost your franking credits but the subsequent increase in pension would have more than compensated genuine cases. The Liberals will probably call this so called "benefit "of reduced deeming rates as a general increase in pensions. Hah! Good luck with that one.
    TREBOR
    11th Sep 2019
    6:18pm
    Not a general increase at all - just a fair result given the rates of true interest - but unless you've got cash hoarded in banks somewhere, it means not one cent to you....
    Karl Marx
    11th Sep 2019
    5:29pm
    rofl, this corrupt, uncaring LNP government has pulled the wool over the eyes of Australians yet again.
    A lot of comments on this forum when new deeming rates where released praised this low life government but now the truth comes out.
    Anonymous
    13th Sep 2019
    11:50am
    still better than any socialist alternative and for 2/3rds of my 70 years the voters have so voted and are likely to continue to do so - ME - I'm still paying taxes and get no benefits - happy to be self sufficient
    johnp
    13th Sep 2019
    3:13pm
    Agree 100% Karl
    Karl Marx
    14th Sep 2019
    7:44am
    Anonymous or Bob Menzies, Socialism is a fairer system for the masses than your capitalist corrupt LNP government hell bent on controlling & stripping the dignity, rights & freedoms of the most vulnerable & at the same time creating great wealth for themselves & their rich mates.
    Under the LNP regime the poor get poorer as the rich get richer.
    TREBOR
    11th Sep 2019
    6:19pm
    The Masque of The Black Lie.... somehow this has been translated, by the propaganda machine of the LNP, into some kind handout to all pensioners and an increase in pension - no such thing has occurred... but some may benefit a little from not having as much taken out of pension because they have too much cash hoarded...

    Hardly the same thing..
    Paddington
    15th Sep 2019
    8:37pm
    Yep! Everyone who comments on here should picture the single pensioner who is renting with no dividends or investments and is broke a few days after pension day and hungry a few days before the next pay day.
    Farside
    15th Sep 2019
    10:19pm
    majority of retirees are a-s-p-i-r-a-t-i-o-n-a-l rather than worrying about the little things like shelter and food and health.
    Hoohoo
    16th Sep 2019
    5:47pm
    And because they are (might be) the majority, does that mean it's OK for the minority to continue to be squeezed into homelessness, Farside?

    This is already happening to a lot of women in their 50's & 60's with little or no superannuation, whose children have grown up (thanks to their mother's unpaid care) & whose husbands have dumped them for younger sport.

    They can't pay rent from their meagre NewStart benefit, so they are forced to sharehouse like an 18 year old school-leaver must. If they can't manage that (which involves coming up with 6 weeks' rent upfront: 4 weeks for Bond, + 2 weeks' rent in advance), then pray you don't have any bills, or a car, or a credit card, 'cos the next step is homelessness or servitude.
    Cheezil61
    11th Sep 2019
    7:29pm
    I currently still work full time but feel for those rely on any Centrelink assistance. When you consider that Centrelink & ATO can robo debt any individual that owes a debt without even telling the individual &it's happening (until they find shortage of said debt money) without question or proof etc why cant Centrelink recipients & tax payers robo debt the govt department that owes them because they struggle with understanding the system & how to claim what they legally can claim meaning that there is probably untold/unknown amounts that these departments have in their coffers as unpaid entitlements. System is geared against the poorer individuals (soft targets)!
    Tricky
    11th Sep 2019
    8:09pm
    These DEEMING RATES on cash term deposits are another TAX on Pensioners!
    GeorgeM
    12th Sep 2019
    3:53pm
    So why is this news? The so-called boost of $800 to pensions was always Fake News. As I said then, the media, including YLC, had made too big a deal out of it. This was always relevant only for some part-pensioners (not the full pensioners), that too only those affected by the Income test, not the majority who are affected by the Assets Test, and it was always a pathetic / small change given the number of RBA rate changes instead of linking it directly to the RBA rate. Just a political tool for the party in power, cannot expect Labor to do anything better either - remember Shorten used to be Minister for Fin Services and Superannuation and did not do anything (such as linking it to the RBA rate) at all to help anyone?

    Only option now is to scrap all such Age Pension tests, and give all Universal Age Pension based only on Age & Residency, paid by the ATO, and take this completely out of the hands of Politicians and Centrelink.
    Briar
    13th Sep 2019
    7:32pm
    Well 0.25 of a percent reduction was actually close to not a lot. Why is the Deeming Rate not aligned to the Bank Interest Rate?

    As a single female who worked part-time for many years bringing up children on just what I earned, and no income from my ex as he lived overseas and refused to contribute, I was never in the position to save until the last few years of my working life. Extra Super contributions and bank savings were only something that happened over 5 years before I retired. Super stuff worked out OK... but just having money in a term deposit, and receiving a small inheritance recently, has totally put me in a different place with Centerlink. The Deeming Rates are ridiculous and should be tied to the RBA bank rate.
    Misty
    15th Sep 2019
    10:29pm
    Nothing must get in the way of the surplus for this govt so don't expect any help for pensioners, they are at the bottom of the list I am sure and this govt wonders why pensioners are not spending to help the economy.
    Hoohoo
    16th Sep 2019
    5:58pm
    And when they finally get their bloody surplus (for the current account), helped by totally under-spending on crucial welfare like the NDIS, they'll still have tripled the debt that Labor left them 6 years ago.

    It's simply sleight of hand, entering data into a particular side of the ledger, excluding date from the other side. It's like cooking the books in fact. People fall for it so easily because they think being in surplus means we have no more debt.
    Paddington
    16th Sep 2019
    1:21pm
    Well it not going to help as only a couple of dollars a week for full pensioners with no other income.
    GrayComputing
    19th Sep 2019
    9:10am
    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Now is the season for discontent, so do something about it!
    It is time to kill off this insane hugely expensive pensioner whacking bureaucracy.

    It is time for all of us (yes that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even the UK and poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    We all (that means you) need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.

    Does your MP really like being part of the system that allows this indirect abuse of the elderly?

    This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

    Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?
    Karl Marx
    19th Sep 2019
    9:13am
    Exactly Gray, the government would save billions but then they & their rich mates would lose out on millions of $s in private companies used to support a broken system.
    johnp
    19th Sep 2019
    10:19am
    Agree with Gray. Would add though; no need to worry that few million$ earners get it too, because they would just pay tax like all other taxpayers.
    Misty
    19th Sep 2019
    10:45am
    Good luck with that idea Gray, not going to happen, not while we have such apathetic voters here in Australia. Just listening to the treasurer crowing about the budget being back in the black, Labor MP said this is because money was taken from the NDIS which is a mess, people have all sorts of obstacles put in their way to hold up the benifits they should be getting, some have waited years apparently, it is a wonder they don't just give up. M C Sspeaking now about the NDIS, JUST NO'S, IT DOESN'T TELL THE HUMAN STORY BEHIND THESE NO'S.
    Hoohoo
    22nd Sep 2019
    7:41pm
    I heard kids supposedly on the NDIS can't get new wheelchairs when they've outgrown their old wheelchairs (as in, they don't fit in them anymore). There was an awful report of a child being pushed around in a wheelbarrow.

    But hey, how good are budget surpluses?
    That's worth 10000 kids in wheelbarrows for this cruel & stingy government.


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles