Government to cut pensioners' deeming rates

Around one million Australians could receive up to $800 more per year under changes to the federal government's income test for pensioners. But advocates say the much-needed move doesn't go far enough. The federal government has announced it will cut deeming rates for pensioners for the first time since 2015. The rates are used to estimate how much some pensioners earn on their financial investments, and determine the fortnightly payments they receive. It assumes pensioner's investments earn a set rate of interest, no matter what they really earn. Social Services Minister Anne Ruston explains what the changes will mean. "We will be dropping the upper threshold from 3.25 per cent to 3 per cent and the lower deeming rate from 1.75 per cent to one per cent. So what this actually means for people who are affected by this, is for singles up to $800 a year will be the increased amount of money in their pockets through their fortnightly payments and for couples over $1000 over a year will be increased in their fortnightly payments." Ms Ruston says the deeming rate cuts will come into effect from September, but will be backdated to the first of July. The changes will affect people on the aged pension, disability support pension, carer payment, the parenting payment, and Newstart.

Source: AAP