Prime Minister’s big pitch for grey vote could see 900,000 Aussies better off

The Government is spruiking a new policy that could see 900,000 Australians be better off, some by up to $1300 a year.

Scott Morrison will guarantee the level of income payments for 900,000 aged pensioners and other payment recipients today in a major move to ensure rising interest rates don’t gobble up their eligibility for income support.

In a big pitch for the seniors vote, the Prime Minister will announce today that despite the fact interest rates are going up, the deeming rate will be frozen for two years to ensure retirees don’t get less.

The government claims it means some seniors could keep $1300 a year in payments they might otherwise lose.

The deeming rate is the amount the government deems your income to be from your financial assets. It calculates the amount of income received from a financial asset regardless of the actual return.

This calculation is used for the pension income assessment and can lead to reductions in the aged pension.

The Prime Minister confirmed about 450,000 age pensioners and 440,000 other payment recipients would benefit from greater certainty around their fortnightly social security payments because of the government’s deeming rate freeze.

Prime Minister Scott Morrison visits Lifestyle Communities Mount Duneed retirement village. Picture: Jason Edwards

“This is another shield to help protect Australians from the cost of living pressures people could feel from an increase in interest rates,” Mr Morrison said.

“In addition to our indexation of social security payments, we will guarantee the rate of income for people who could otherwise see their social security income drop because of the increase in interest rates.

“This guarantee will be a welcome relief to Australians who rely on both the social security system and modest income from investments by ensuring their payment rates are locked in.”

The lower deeming rate will be frozen at 0.25 per cent for financial investments up to $53,600 for single pensioners and $89,000 for pensioner couples.

The upper deeming rate will remain at 2.25 per cent on investment assets over the amount of $53,600 or $89,000 respectively.

Both sides of politics have already pledged that Australians will get wider access to the discounts offered by the Commonwealth Seniors Health Card post-election.

The move will add an estimated 50,000 older Australians into eligibility status for the Seniors Card which is worth at least $8000 a year.

The singles income test threshold for card access will lift from $57,761 to around $90,000 from 1 July this year. The couples threshold will also increase from $92,416 to $144,000.

Seniors Cards benefits will be expanded.

The Morrison Government had hit back at claims that rising interest rates are a sign of bad economic management.

Treasurer Josh Frydenberg said global factors such as high oil prices due to Russia’s invasion of Ukraine and supply chain disruptions due to Covid-19 were putting pressure on household budgets.

Mr Frydenberg pointed to economic research firm Moodys Analytics that he said agreed with him that the hip pocket pain was instead an indicator of the strong performance of the government.

“Incorrectly, the most recent hike in the cash rate has already been politicised by the Labor opposition as an indictment on the Coalition’s economic management,’’ it said.

“But this is not accurate. May’s rate hike is in response to the Australian economy being able to increasingly stand on its own after the unprecedented support that was offered during the pandemic.

Meanwhile, as the Prime Minister goes on the attack over Labor’s home ownership scheme warning it could force families to sell their home when parents or grandparents died, it’s emerged the same rules apply to the reverse mortgages that the PM has spruiked for seniors.

The Prime Minister’s own scheme – the government’s home equity scheme – demands repayment after death from estates “after 14 weeks”.

Originally published as Prime Minister’s big pitch for grey vote could see 900,000 Aussies better off