Centrelink Deeming Rate Changes March 2026: What Pensioners Need to Know

As March 2026 approaches, millions of Australians receiving Centrelink support are preparing for a series of significant adjustments to their payments. While regular indexation updates are a familiar occurrence, the upcoming period brings a crucial shift in deeming rate changes that could notably influence the financial landscape for many, particularly Age Pensioners and other income support recipients. Understanding these alterations is vital to managing your entitlements and planning for the future.

Deeming rates are an essential tool Centrelink uses to calculate income from financial assets. They provide an estimated income, irrespective of the actual return generated by your investments. These rates play a pivotal role in determining eligibility and the precise amount of various social security benefits. The announced adjustments aim to align the social security system with prevailing economic conditions and interest rate movements, striving for a balance between fairness and sustainability.

Understanding Centrelink Deeming Rates: The Foundation

Before diving into the specifics of the March 2026 adjustments, it's crucial to grasp what deeming rates are and why Centrelink employs them. Essentially, deeming is a method Centrelink uses to estimate the income you earn from your financial assets. This estimate is then factored into the income test for a wide range of Centrelink payments, including the Age Pension, Disability Support Pension, Carer Payment, and JobSeeker Payment.

The primary reason for deeming is to ensure a fair and consistent approach to assessing income. Instead of requiring recipients to report every fluctuation in their investment returns, which can be complex and time-consuming, Centrelink applies a set deemed rate. This simplifies administration for both recipients and the government. It also encourages people to invest their savings wisely, as the deemed rate is often set to reflect a reasonable return achievable in the current market.

Financial assets subject to deeming include:

Savings accounts and cash
Term deposits
Shares and managed investments
Bonds and debentures
Loans you have made to others
Certain superannuation funds (if you are over Age Pension age and the superannuation is not held in an accumulation phase account for which you are eligible for the pension bonus scheme)

It's important to remember that the deemed income is what Centrelink assesses, not necessarily what your investments actually earn. If your investments yield less than the deemed rate, Centrelink still uses the deemed amount. Conversely, if they earn more, your Centrelink payment is not reduced further, as the deemed rate sets the maximum income for assessment purposes from these assets.

Key Centrelink Deeming Rate Changes from March 2026

The federal government has confirmed that new adjustments to deeming rates will come into effect from March 2026. These changes are a direct response to current economic conditions, including interest rate movements and inflationary pressures, aiming to provide a more realistic assessment of potential income from financial investments. Pensioners with financial assets will need to pay close attention to how these changes might impact their entitlements.

Under the revised rates, the structure will be as follows:

Lower Deeming Rate: This will increase to 1.5%. This rate applies to financial assets up to certain thresholds: $60,400 for singles and $100,200 for couples (including a significant increase from previous thresholds).
Upper Deeming Rate: This will rise to 3.25%. This rate applies to financial assets that exceed the aforementioned lower thresholds.

These adjustments reflect an expectation of higher returns on investments, meaning Centrelink will assess a higher level of income from your financial assets. For many, this could mean a slight reduction in their Centrelink payments if their total assessable income (including deemed income) pushes them into a different payment bracket or reduces their entitlement.

Understanding these new thresholds and rates is crucial for planning. For a deeper dive into how these specific rates might affect you, you might find value in exploring New Deeming Rates March 2026: Understanding the 1.5% and 3.25% Impact.

Beyond Deeming: Other Centrelink Payment Increases in March 2026

While the deeming rate changes are a significant focus, March 2026 will also bring the regular bi-annual indexation of Centrelink payments. This process, occurring every March and September, is designed to ensure that social security payments keep pace with the cost of living and wage movements. More than five million Australians are set to benefit from these broader payment increases.

From 20 March 2026, those receiving the full single rate of the Age Pension, Disability Support Pension, or Carer Payment will see their fortnightly payments increase by approximately $22.20. This uplift helps to somewhat alleviate the pressures of rising everyday expenses.

Other vital income support payments also slated for an increase include:

JobSeeker Payment
Commonwealth Rent Assistance
Parenting Payment
ABSTUDY (for those aged 22 and over)

The exact indexed amounts for these payments will vary based on individual circumstances and family situations. These increases are a testament to the government's commitment to balancing the financial well-being of recipients with broader economic realities. However, for those with significant financial assets, the benefits of these payment increases might be partially offset by the new deeming rates.

Who Will Be Most Affected by These Deeming Rate Changes?

The impact of the March 2026 deeming rate changes will not be uniform across all Centrelink recipients. The primary groups who will feel these adjustments most keenly are:

Part-Pensioners with Financial Assets: Individuals receiving a part-pension whose entitlements are currently reduced by the income test (where deemed income plays a role) will likely experience the most direct effect. An increase in deemed income could lead to a further reduction in their fortnightly payment.
Pensioners with Savings Above Lower Thresholds: Those whose financial assets fall within or just above the new lower deeming rate threshold ($60,400 for singles, $100,200 for couples) will see a more significant jump in their deemed income compared to previous rates, potentially impacting their overall payment.
Retirees Relying on Modest Savings: While the changes reflect higher market returns, some retirees with conservative investment strategies or those who are risk-averse might not be achieving the deemed rates in reality. For these individuals, the deemed income could disproportionately reduce their pension, even if their actual earnings are lower.

Conversely, those who receive the full Age Pension (due to minimal financial assets or other factors) or those whose payments are solely affected by the assets test (not the income test) might see little to no direct change from the deeming rate adjustments. However, the broader payment indexation will still apply to them.

Advocacy groups have voiced mixed reactions. While some acknowledge the necessity of aligning deeming rates with current market conditions, there are concerns about the potential financial pressure on pensioners with limited capacity to increase their actual investment returns. The Department of Social Services maintains that these adjustments are crucial for maintaining the fairness and sustainability of Australia's social security system, ensuring that support is directed appropriately.

Navigating the Changes: Practical Advice for Pensioners

With significant deeming rate changes and general payment indexation on the horizon, proactive steps can help you understand and prepare for the financial shifts in March 2026. Here's some practical advice:

Review Your Financial Assets: Take stock of all your savings, investments, and other financial assets. Understand which of these are subject to deeming. Being aware of your total assessable assets is the first step in estimating your deemed income.
Contact Centrelink Directly: The most accurate information for your specific circumstances will come directly from Centrelink. You can use their online tools, call their helplines, or visit a service centre to inquire about how the new deeming rates and payment indexation will specifically impact your entitlements. They can provide a personalised estimate based on your declared assets.
Consider Professional Financial Advice: For complex financial situations or if you're unsure about the best way to manage your assets under the new rules, consulting a qualified financial advisor is highly recommended. They can help you review your investment strategy, understand the implications of deeming, and potentially structure your finances in a way that optimises your Centrelink entitlements while meeting your personal financial goals.
Don't Panic and Stay Informed: Deeming rates are estimates, not a direct tax on your actual earnings. While they can affect your pension, a clear understanding prevents unnecessary worry. The government continually monitors economic conditions, so staying informed about any future policy changes is also wise.
Utilise Centrelink's Online Services: The MyGov platform linked to Centrelink provides access to your payment summaries, allows you to update your details, and can often provide estimates of your payments. Regularly checking this portal can keep you informed.

These changes underscore the importance of being informed and proactive. For a more detailed look at how these adjustments might specifically alter your Centrelink payments, consider reading How March 2026 Deeming Rate Changes Affect Your Centrelink Payments.

Conclusion

The Centrelink deeming rate changes taking effect in March 2026, alongside the regular indexation of various income support payments, mark a pivotal moment for millions of Australians. While the broader payment increases offer some relief from cost-of-living pressures, the adjustment of deeming rates reflects evolving economic conditions and the government's commitment to maintaining a fair and sustainable social security system. Pensioners, particularly those with financial assets, must take the time to understand these changes and their potential impact on entitlements. By proactively reviewing your financial situation, seeking advice from Centrelink or a professional financial advisor, and staying informed, you can navigate these adjustments confidently and ensure your financial well-being is safeguarded.