Changes to Age Pension rules

Legislation to extend deeming to account-based pensions has passed the Senate.

Changes to Age Pension rules

Legislation to extend deeming to account-based pensions passed the Senate on 25 March 2014 and will take effect from 1 January 2015.

The changes to deeming rules for account-based pensions were first introduced by the then Labor Government under its superannuation review in April 2013. While the incoming Coalition Government did not adopt all of the proposed changes, the proposal to extended deeming to new, account-based pensions was. Having passed through the Senate, the legislation will be implemented from next year.

Under current rules, account-based pensions are subject to the same, more generous rules which apply to superannuation pensions. However, there are grandfathering rules which apply to those who receive an income support payment before 1 January 2015 and have in place a complying account-based pension or annuity. Should the recipient switch products after 1 January 2015, or commence a new pension, then this will be subject to deeming at the applicable rates.

Find out more about the Social Services and Other Legislation Amendment Bill 2013. 

To find out how such changes may affect your Age Pension, visit

Opinion: From behind the smoke screen

While many Australians are fighting the good fight to stop the repeal of the Future of Financial Advice (FoFA) legislation other, equally mean, bills are passing the Senate.

One such measure is a change to the way in which account-based pensions are assessed when applying for the Age Pension. Up until 31 December 2014, account-based pensions will not be subject to deeming. Although income from account-based pensions is counted under the income (and asset) test, a special calculation which recognises the return of capital (i.e. what you have already paid in), is applied which reduces the assessed amount of income. This means that those with a modest amount in super can receive a pension and still be eligible for the Age Pension.

Under the new rules standard deeming rates will apply. This means that Age Pension payments may be reduced considerably. Also a note for those who don’t qualify for an Age Pension but do receive a Low Income Health Care Card, levels of deemed income may mean that you now lose this benefit.

So, in a cruel sleight of hand, it seems that while consumers may have won the battle in delaying the repeal of the FoFA legislation, the war may already be lost.

What about you? Do you think deeming of account-based pensions is a fair move? Is the timing of the passing of such legislation suspect?


    To make a comment, please register or login
    1st Apr 2014
    on one hand I understand the government tying to make ends meet but for us baby boomers who have worked hard to give ourselves a good retirement with a little help from the government it seems we are just a cash cow. Those very rich have ways of shifting money around into family trusts and other legal places but the average pensioner struggles to live on the pension and the little extra some have in their super just helps make life a little more comfortable. Why don't we make the politicians wait till they are 65 before getting their super instead of when they finish their term in government and see how they like it.
    1st Apr 2014
    If you Google 'politicians retirement payment' you MAY understand why EVERY government has an alternative and eternal agenda . Check this out and then multiply by six state governments, plus six opposition governments. One Federal government plus opposition federal government. 'Overseen by a Governor General and State Governors!
    ALL of the above, both while serving and into retirement, has to be paid for before ONE CENT is spent on the Australian tax paying population!
    Just as long as we continue with the present government system, bestowed upon the Australian Colonies by England, then this is the debt that will continue and continue to GROW!
    We don't have to dislike the Queen, this is just economical common-sense.
    The Westminster Government system was designed by one country to rule one country.
    We continue as SIX colonies with SIX of them!
    We MUST enter into sensible dialogue together and bring Australia into the 21st century by becoming a Republic with ONE affordable government for ALL Australians.
    Or stay mute and continue just as the 'eternal' state politicians wish and plan for!
    1st Apr 2014
    Surely we can improve matters without becoming a republic?
    1st Apr 2014
    Making ends meet -
    Australia is to purchase 2 DRONES which will be based in Adelaide so as to protect Australian shores.
    Albeit that DRONES get stolen on a regular basis
    Australians will never be told that one or both of OUR DRONES were sent out on a mission & never returned -
    They will just REPLACE IT / THEM.
    They need to deem & deem big for that which we are about to receive.
    BAIL-IN is also coming - there should be plenty of $$$ to throw around.
    1st Apr 2014
    Gordon Duff wrote an article - Flight 370 The CIA Hoax - this will give you some idea of how easy it is to STEAL THINGS out of the sky.
    1st Apr 2014
    Also The University of Texas ha proven - to the United states defense forces - on more than one occasion - beyond a shadow of a doubt that DRONES can be stolen from/in mid air.
    Britain admitted that in one tear alone they LOST 260 aprox :- DRONES.
    following in the footsteps of his mentor John Howard -
    This guy the P.M. need all the monies he can get to live up to Honest John Howard - cricky
    1st Apr 2014
    So right Trickyv some have the pension and what they have saved , I could have blown it on holidays and pokies! but wanted some security, I am fast learning there is no such thing, and I am older than the baby boomers, so never had a chance to have subsidized super.As you say there should be the same rules for all, and politicians should definitely have to wait until the official retiring age, which I am told is going to be 67 before very long,the same for all, the arrogance of politicians to think they are special!! they do what they choose to do, unlike many in physical employment who are worn out before that age! Democracy ! what a joke. We all understand what is fair.
    1st Apr 2014
    This is exactly why you cannot leave so many Government Senators in the Senate. If you do, bad policies like this get passed easily and Seniors on low incomes suffer.

    Vote on April 5 for Australian Voice and get a stronger say for Seniors. Don't let the Government reduce our incomes. Put People First.
    1st Apr 2014
    Which party are you standing for?
    Pass the Ductape
    1st Apr 2014
    Hmmmm! And to think politicians have just been granted a rather generous, if not obscene, increase in salary.....Back to the same old, same old. Never changes does it? Doesn't matter which government gets voted in, they're all just the same when it comes to time to line their own pockets. Must be nice to play the roll of God when it comes to dishing out the dosh to themselves whilst at he same time they cut holes into the bottom of the pockets of the aged pensioner! Must make them feel really proud.
    2nd Apr 2014
    Yep! Same old, same old! But SOMEONE KEEPS VOTING FOR THEM?
    A politician is a person who believes firstly and totally in themselves, then the party to which they belong, the policy of the party and nothing but the party, and devoid of a conscience. But the REWARDS far out way any thought of conscience!
    The last Labor government accumulated TWO Prime Ministers!
    1st Apr 2014
    Was slavery abolished,or was the means of enslavement merely changed?
    Slave traders now operate from employment agencies and the slaves beg for work. Great system.
    1st Apr 2014
    Good one. Encapsulated our modern day democracy. I guess politicians forget the tenets of true democratic government and that they are servants of the people, not the other way around.
    1st Apr 2014
    Politicians and their 'think-tanks' have always taken the community for granted that we are too dumb to do the thinking. While they aim to cut down services and benefits from the masses, they never touch their own. Aside from their generous salaries, they are in receipt of unwarranted allowances but that aspect is never explored as a possible savings for the treasury. Their budget for their office is extravagant that they can afford to circulate coloured newsletters to boast whatever projects they are involved in which are unnecessary because we can read them in newspapers. They hire unlimited no. of people to do their thinking since they are too dumb to think. The most work they do is during election campaign.
    1st Apr 2014
    Tell me which party has an agenda of curbing Politicians salaries and allowances and I will vote for them ! It is totally obscene that they spend our tax money, as if it was going out of fashion; which it actually is doing! Soon there will be nothing left in the kitty . You cannot keep spending more than you are earning,any savvy worker will tell you that. We have half the population on some kind of benefit or other. The 'work ethic' that Australians are famous for, has disappeared, and now we have a nation of layabouts. Multiculturalism brings in the bad with the good!
    2nd Apr 2014
    Irish, I agree with you to a certain extent. However, the uncertainty of stable employment and the changing work environment, breeds despair and resentment. Once upon a time an employed person had a job for life. That has all changed. If half the population is on some sort of benefit, then someone in authority must have approved that payment. I am sure the numbers of those not really entitled to benefits is low.

    Having said that, I do think people from other countries that are eligible for the Australian aged pension, should lose it if they return to live in their country of origin.
    A. N. Onymous
    2nd Apr 2014
    20140402 at

    Student (2nd April at 11:42 am),

    There would be people in that category who have lived and worked AND PAID TAXES in Australia for many years, perhaps even for their whole working lives. Some of them might not qualify for any pension or payment of any kind in their country of origin because of this. Are you sentencing them to poverty for their remaining years?

    I’m guessing you’re not from overseas. Don’t you know anyone who is who would suffer under your proposal? Or don’t you care whether people from overseas suffer?
    Clare bear
    1st Apr 2014
    Thank you so much for this information Debbie - it is most appreciated. I had been looking out for media item that the legislation had been passed, as I am about to turn 65 and go onto Aged pension but the newspapers do not appear to have carried the news that the Bill had gone through the Senate. certainly does not appear to have been any media release from the Minister for Social Security!! I thought I would be safe from new provisions because of the grandfathering rules but it would appear that even those who have arrangements in place prior to 1 January 2015 may be affected if they switch accounts in the future or take out a new product. I note that the amendments also made changes to the provisions around payment of Aged Pension whilst overseas. Does anyone know what these changes are?
    1st Apr 2014
    I am very surprised this was passed, as we are an ageing population and have a strong vote. Account based pensions are after all our own money that we earned and saved and paid tax on, and it is our own money coming back to us, NOT extra income. But then again I believe the senate is a part greenie senate and we get what we vote for.
    1st Apr 2014
    When is the next Federal Election ?
    I bet Tony Abbott doesn't get back in.
    2nd Apr 2014
    You wanna bet, with Rupert controlling 75% of Australian media and Gina trying to gain control of the other 25% . It causes Australians headaches to think ( they are ridiculed worldwide for it) you still wanna bet?
    2nd Apr 2014
    should have read "it causes Australians headaches IE Apathy to think for themselves"
    1st Apr 2014
    You are so right Bes, we are over governed, we do not need so many State Parliaments plus a Federal one, lets have one! and then Councils can take care of the States, as long as we don't start paying them anything like the State parliamentarians, it has to be sorted out fast! I wonder how many Ex Premiers we are keeping and what the bill is to the states, it is out of hand, lets face it is useless Governments that have got us in this situation. Will it ever change? Well I can't see them voting themselves out of any monetary perks they have given themselves! however they won't stop digging into our pockets, shame.
    2nd Apr 2014
    Check out this government web page. Go to - Expenditure on Entitlements by Name for the Period 1 January to 30 June 2012. Be unpleasantly surprised!
    1st Apr 2014
    Be very afraid, for Tony Abbott was the henchman behind John Howards Work place laws, and guaranteed we haven't seen the last of the cuts, Shame that it didn't include cuts to their pensions as well
    1st Apr 2014
    Google Tony Abbott and the HR NIcholls Society . Also try the HR Nicholls Society and Superannuation. Then you will see why we can all be VERY afraid. The average Australian does not have a clue on the big picture. Main stream media appears to overlook these issues.
    5th Apr 2014
    It will be a brave politician who can stand up and say, we will increase our pay in accordance with the CPI index. Instead of the whopping increase in pay by the Qld PM, he would only get $300 - $400 per annum.
    We only got a rise of $1.70 each and that equates to 0.015% and Governmnts should get the same.
    2nd Apr 2014
    Has anyone notices that the PAID trawlers of Abbott supporters on this forum and every other forum are suddenly silent? Perhaps by keeping silent they hope the discussion on this embarrassment of a prime minister will fade away, DO NOT LET THEM . keep the embarrassment up.
    3rd Apr 2014
    The rich get richer and the poor get poorer.

    The gap between the rich and poor in Australia is getting more like the UK.
    5th Apr 2014
    What irks me the most is that centrelink has an existing deeming rate for whatever you have in the bank, from $1.00 up to $77,400 it is 2%. This is for a pensioner couple combined.

    Now have Centrelink changed that to suit the changes that Suncorp Bank has made? Doubt it. Another rip off of the seniors and let the rich off scot free.
    Suncorp has changed their rates from $1.00 to $1,999 at 0.01% interest to $1.00 to $9,999 at 0.01%. The 0.01% is the governments deeming amount made into law, and suncorp has extended it to make even more money for themselves!

    Many of my friends who have over $2,000 but under $4,000 in the bank have ripped all but a few dollars out. Some are keeping it at home, and why not as I doubt 1 cent in interest every 6 months they are losing by keeping it at home is going to make them broke. Others are looking for another bank to deposit their savings.

    I am considering doing the same thing, rip it all out or look for an alternate bank.
    15th Apr 2014
    Many subscribers write of needing a new Government system: I ask your opinion of the party found on This party also has a 'Draft Constitution for the Sovereign nation of Australia' available to read and comment on.

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