If you hold a Commonwealth Seniors Health Card or receive Centrelink benefits, changes taking effect in late March 2026 could impact your assessed income and benefit eligibility without any change to your actual financial circumstances.
From 20 March 2026, social security deeming rates will increase. The lower deeming rate will rise from 0.75% to 1.25%, while the upper rate increases from 2.75% to 3.25%. These rates apply to both full and part pensioners, as well as self-funded retirees who hold a Commonwealth Seniors Health Card. The rates will be applied automatically by Services Australia.
Understanding deeming
Deeming rates are a simplified method used by Centrelink to assess income from your financial investments. Rather than tracking the actual returns from each investment, the government assumes your financial assets earn a set percentage return – this is the deeming rate. This system was introduced over 30 years ago to create fairness and encourage people to choose investments based on merit rather than their impact on social security payments.
Under deeming, your financial investments are assumed to earn income at the prescribed rates, regardless of what you actually earn. The lower rate applies to financial assets up to $64,200 for singles and $106,200 for couples (combined). The upper rate applies to balances above these thresholds.
Who's affected?
Higher deeming rates can increase your assessed income even when your financial position hasn't changed. This affects pensioners, Commonwealth Seniors Health Card holders and any Centrelink customers or aged care residents who have financial assets subject to deeming.
The changes could impact:
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Commonwealth Seniors Health Card eligibility if your adjusted taxable income plus deemed income exceeds the threshold;
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Age Pension payments for those subject to income testing;
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some aged care fees, as higher deemed income can lead to higher means-tested care fees; and
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other income-tested benefits or concessions.
Importantly, deeming doesn't change the actual interest or dividends you receive – it's only a calculation used by Centrelink for assessment purposes.
Account-based pensions affected
Account-based income streams that commenced on or after 1 January 2015 are subject to deeming for social security income test purposes. Where deeming applies, your actual pension payments are ignored for assessment purposes.
This particularly affects Commonwealth Seniors Health Card holders and age pensioners who are subject to income testing. Higher deemed income may affect your eligibility if your income is close to the relevant threshold.
Example
Consider a single Commonwealth Seniors Health Card holder with a $300,000 account-based pension that commenced after 1 January 2015. Currently, this balance produces deemed income of around $7,000 per year. From 20 March 2026, the same balance will generate deemed income of around $8,500 per year – an increase of approximately $1,500 annually, even though pension payments remain unchanged.
What you should do
Review your circumstances, particularly if you have significant wealth in financial assets. Care should be taken to assess income test outcomes if your income is close to benefit thresholds.
You may want to:
These changes affect a complex area where social security and superannuation rules intersect. The impact will vary significantly depending on your individual circumstances, asset levels and benefit entitlements.
Source: www.servicesaustralia.gov.au/deeming
