Social security deeming rates frozen in pensioner cost bonus

The Albanese government will freeze social security deeming rates for another year, in a bonus for seniors.

Figure skater Maxine Gray, 75, photographed at Lake Burley Griffin in Canberra. Picture by Sean Davey

Social security deeming rates will be frozen for another year, benefiting nearly 450,000 age pensioners and taking the issue off the political agenda as Australia enters an election phase.

Cost-of-living solutions for seniors

Social Services Minister Amanda Rishworth said the rates would be frozen until the middle of next year, extending a two-year pause that began in the middle of 2022.

She said the lower deeming rate will remain at 0.25 per cent and the upper rate at 2.25 per cent until June 30, 2025.

“This will ensure income support recipients will not see a reduction to their payments due to the deeming rates over the next year,’’ Ms Rishworth said.

“It is a relatively simple step that will provide continued relief for around 876,000 people with deemed income who are receiving income support.

“More than half … (nearly 450,000) receive the age pension, around 136,000 receive the JobSeeker payment and around 96,000 receive the parenting payment (single). These changes build on the Albanese government’s income support measures from the 2023-24 budget.’’

Social security payments are tested according to an asset test or an income test.

If it is based on the income test, a threshold is set according to whether the person is single or part of a pensioner couple.

An amount of 0.25 per cent is deemed up to $60,400 for singles and $100,200 for pensioner couples.

Above those income points, the deeming rate hits 2.25 per cent, officials said.

Had the deeming rate increased, it would have a significant impact for some pensioners who could lose the pension or have their payments reduced, making it a highly sensitive political issue.

Increase to rent assistance

Less well-off seniors will also receive the benefit of a further 10 per cent increase to maximum rates of commonwealth rent assistance, costing the budget hundreds of millions of dollars.

“Combined with our increase in last year’s budget, this represents both the largest and the first back-to-back increase to the maximum rates of rent assistance in more than three decades,’’ Ms Rishworth said.

“It means that combined with indexation, maximum rates of rent assistance will have increased by more than 40 per cent since the Albanese government was elected.”