Pension boost is unlikely to help many older Australians

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?

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