New Deeming Rates March 2026: Understanding the 1.5% and 3.25% Impact

New Deeming Rates March 2026: Understanding the 1.5% and 3.25% Impact

As the calendar turns towards March 2026, millions of Australians receiving Centrelink support are preparing for significant adjustments to their payments. While regular indexation helps keep pace with the cost of living, a crucial underlying shift in deeming rate changes is set to reshape how financial assets are assessed. These changes, featuring new rates of 1.5% and 3.25%, are more than just numbers; they represent a revised approach to evaluating potential income from investments, directly influencing the amount of social security benefits many individuals will receive. Understanding these updates is vital for Age Pensioners, JobSeeker recipients, Disability Support Pensioners, and anyone relying on government income support.

What Are Deeming Rates and Why Do They Matter?

Deeming rates are a fundamental component of Australia's social security system, used by Centrelink to estimate the income generated from your financial assets. This estimation is applied regardless of the actual return your investments earn. For instance, if you have money in a bank account, shares, or managed funds, Centrelink "deems" that these assets are earning a certain rate of return, and this deemed income is then included in your overall income assessment. This mechanism is crucial because it helps determine your eligibility for various payments and the rate at which they are paid.

The primary purpose of deeming rates is to ensure fairness and sustainability within the social security system. They prevent individuals from structuring their investments to avoid income tests and provide a consistent, equitable way to assess financial capacity. By aligning deeming rates with prevailing economic conditions and interest rate movements, the government aims to create a more realistic assessment of potential investment income, ensuring that those with significant financial assets contribute appropriately towards their self-sufficiency while still supporting those in need. For many, these rates can make a substantial difference to their fortnightly payment.

The March 2026 Deeming Rate Adjustments: A Closer Look

Effective from March 2026, significant adjustments to the deeming rates will come into play, reflecting the government's response to current economic trends and interest rate environments. These deeming rate changes are specifically designed to align the social security system more closely with the actual earning potential of financial assets.

Under the revised structure:

• The lower deeming rate will increase to 1.5%. This rate will apply to financial assets up to specific thresholds:
  • $60,400 for single individuals
  • $100,200 for couples (combined assets)
• The upper deeming rate will rise to 3.25%. This rate will be applied to any financial assets held above the aforementioned thresholds.

To illustrate, imagine a single Age Pensioner with $70,000 in financial assets. The first $60,400 would be deemed to earn 1.5%, while the remaining $9,600 ($70,000 - $60,400) would be deemed to earn 3.25%. This combined deemed income is then factored into their overall income assessment, which subsequently affects their Age Pension entitlement.

These adjustments acknowledge the shifts in the broader financial market. With interest rates potentially moving upwards, the deemed rates are being updated to provide a more accurate reflection of what someone could reasonably earn from their savings and investments. While this aims for greater equity, it's paramount for Centrelink recipients to understand that their actual investment returns may differ, yet Centrelink will use these deemed rates for calculation purposes.

Broader Centrelink Payment Adjustments in March 2026

It's important to recognise that the deeming rate changes arriving in March 2026 are part of a larger, biannual update to Centrelink payments. The government regularly adjusts payment rates in March and September to account for inflation and wage movements, aiming to help recipients cope with the rising cost of living. Therefore, many individuals will experience a dual impact: changes to their deeming rates alongside general increases to their payment categories.

From 20 March 2026, over five million Australians are set to benefit from updated Centrelink payment rates. For instance, individuals receiving the full single rate of the Age Pension, Disability Support Pension, or Carer Payment can anticipate an increase of approximately $22.20 per fortnight. This indexation is a direct measure to bolster the financial stability of recipients.

Beyond these primary pensions, other vital income support payments are also slated for an increase:

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

While these indexed increases are largely welcomed, the concurrent shift in deeming rates means that the final impact on individual payments will depend on a combination of factors. For some, the increase from indexation might be partially offset or even overshadowed by an increase in their deemed income from financial assets. It's the interplay between these two sets of adjustments that recipients must grasp to accurately forecast their future entitlements.

Navigating the Changes: Practical Tips and Next Steps

Understanding the intricacies of the new 1.5% and 3.25% deeming rates, alongside broader payment indexation, is crucial for anyone receiving Centrelink benefits. Taking proactive steps can help you navigate these changes effectively and ensure you're as informed as possible.

Here are some practical tips:

1. Review Your Financial Assets: Take stock of all your financial investments – savings accounts, term deposits, shares, managed funds, etc. Knowing the total value is the first step in understanding how deeming rates will apply to you.
2. Understand Your Deemed Income: Centrelink will automatically apply the new deeming rates from March 2026. If you have significant financial assets, your deemed income will likely increase. This doesn't necessarily mean your actual investment returns have increased, only how Centrelink assesses them.
3. Access Centrelink Calculators: Utilise Centrelink’s online tools and calculators. These resources can provide an estimate of how the new rates might affect your specific payment amount, giving you a clearer picture tailored to your circumstances.
4. Seek Professional Advice: If you're unsure about the impact on your payments or have complex financial arrangements, consider speaking with a financial information service officer at Centrelink or a qualified financial advisor. They can provide personalised guidance and help you understand your options.
5. Update Your Details Promptly: Always ensure your financial asset details are current with Centrelink. Any discrepancies could affect your payment accuracy.
6. Stay Informed: Keep an eye on official Centrelink communications and reputable financial news sources for any further updates or clarifications.

For a detailed breakdown specifically for pensioners, you might find our article Centrelink Deeming Rate Changes March 2026: What Pensioners Need to Know helpful. To understand the broader impact on your specific Centrelink payments, read How March 2026 Deeming Rate Changes Affect Your Centrelink Payments.

Conclusion

The new deeming rates of 1.5% and 3.25% coming into effect in March 2026, alongside the regular indexation of Centrelink payments, mark a significant period of adjustment for many Australians. These deeming rate changes underscore the dynamic nature of social security policy, aiming to balance economic realities with support for those who need it. While the adjustments reflect a push for greater fairness and sustainability within the system, their impact will vary widely based on individual financial circumstances. Proactive engagement with Centrelink resources and, where necessary, professional financial advice, will be key to understanding and managing the implications for your income support payments.