Deeming rule changes for 1 January 2015 –
what you need to know
Retirement income accounts are currently treated favourably by Centrelink when assessing
your eligibility for financial support payments such as the Government Age Pension. But, from
1 January 2015 the rules will change and all new retirement income accounts will be treated as
financial assets under Centrelink’s deeming rules. Some people may benefit from the rule change,
but others may receive less financial support from Centrelink.
What are the deeming rules
and how do they work ?
Calculating your deemed income
from 1 January 2015
When you apply for financial support through Centrelink,
your eligibility for support and the amount you receive
is determined by whether you meet the Income and
Asset tests.
The deeming rules, which form part of Centrelink’s Income
test, assume any financial assets you own earn a certain
amount of income, regardless of what they actually earn.
Only the deemed income from these financial assets is
used to determine your eligibility, not the actual income.
If the actual income your financial assets earn is more
than the calculated deemed income, the difference
between the two amounts will not be included when
assessing your eligibility for Centrelink support1. The table
below outlines the current deeming rates.
Emily is single and opened a retirement income account
after 1 January 2015 with $200,000. She has no other
assets. Her deemed income would be:
The below deeming rates apply from 1 July 2014
Marital status
Threshold
Deeming rate
Up to $48,000
2%
Single
Over $48,000
Couple (combined)
if one or both are
receiving income support
from Centrelink
Up to $79,600 Couple (each)
if neither are receiving
income support
from Centrelink
Up to $39,800
Over $79,600
Over $39,800
3.5%
2%
3.5%
2%
3.5%
Working out how much of Emily’s income
is deemed to earn 3.5%
Emily’s assets
$200,000
less threshold = income that earns 3.5%
– $48,000
= $152,000
Emily’s deemed income
Emily’s income × deeming rate = Emily’s deemed income
$48,000
$152,000
× 2%
= $960
× 3.5%
= $5,320
Total deemed income = $6,280
Emily’s account would be deemed to earn $6,280 each year.
Work out how much of your income
is deemed to earn 3.5%
Your assets
$ 200,000
less threshold = income that earns 3.5%
– $ 48,000
= $ 152,000
Your deemed income
Your income
× deeming rate
= your deemed income
$ 48,000
× 2%
= $ 960
$ 152,000
× 3.5%
= $ 5,320
Total deemed income = $ 6,280
1 Department of Human Services, Deeming rules
www.australiansuper.com/retirement
page 1 of 2
Will the deeming rule changes affect you ?
The table below explains the changes.
If you…
Changes
are receiving Centrelink payments (including Age Pension payments)
and have an existing retirement income account on 31 December 2014
there will be no change to the way your
account is assessed by Centrelink.
have an existing retirement income account on 31 December 2014
and start receiving Centrelink payments (including Age Pension
payments) on or after 1 January 2015
are receiving Centrelink payments (including Age Pension payments)
on 31 December 2014 and change or open a new retirement income
account on or after 1 January 2015
your retirement income account will
be included as a financial asset and
be assessed under the new rules.
choose to change retirement income products, open a new retirement
income account or recommence Centrelink payments (after not
receiving them for a period of time) on or after 1 January 2015
Need advice ?
A financial planner can help you work out if you would be better off opening a retirement income account
before 1 January 2015. Call 1300 300 273 and speak to an adviser* over the phone.
If you’d prefer to meet with an adviser*, we can connect you with a financial planner who can help you
on a no-commissions, fee-for-service basis. Go to www.australiansuper.com/advice
Need help ?
*T
he financial advice you receive will be provided under the Australian Financial Services Licence held by third parties
and not by AustralianSuper Pty Ltd (AustralianSuper) and therefore is not the responsibility of AustralianSuper.
With your approval a fee may be charged if a Statement of Advice is provided.
This fact sheet was issued in November 2014 by AustralianSuper Pty Ltd ABN 94 006 457 987 AFSL 233788, Trustee of
AustralianSuper ABN 65 714 394 898 and may contain general financial advice that does not take into account your personal
objectives, situation or needs. Before making a decision about AustralianSuper, consider your financial requirements and
read the Product Disclosure Statement, available at www.australiansuper.com/retirement or by calling 1300 789 932.
page 2 of 2
Deeming rule changes for 1 January 2015
40031 11/14
For full details about the
deeming rule changes, go to
www.humanservices.gov.au
or call Centrelink on 13 23 00.