Pensioners left hanging as government signals deeming freeze to end
Asset tests affecting age pensioners look set to change in weeks with a freeze on deeming rates to end, despite advocacy groups calling for an extension as Australians struggle with the cost-of-living.
Deeming rules assume financial assets earn a specific rate of income, regardless of their actual return, and means test how much pension a person receives as well as eligibility for the Commonwealth Seniors Health Card (CSHC) and aged care fees.
If the rates change and some people are deemed to earn more, this will affect how much pension they could take home, or even the concessions they are eligible for under the CSHC.
Read more from The Senior
Last year, the federal government announced an extension of the deeming rate freeze until June 30, 2025, but no additional extension was announced in this year's budget - meaning thousands of pensioners could see a change in their bank accounts come July 1.
The Senior sent questions to Social Services Minister Tanya Plibersek but a department spokesperson responded, seemingly confirming the freeze is to end.
"The Government has frozen the deeming rates until June 30, 2025," the spokesperson said.
"Regardless of the end of the freeze, the deeming rates can only be changed by a decision of the Minister for Social Services. There has been no decision to change the deeming rates from their current levels."
The spokesperson's comments echoed comments those from former Social Services Minister Amanda Rishworth, just prior to Federal Election in May.
"The expiry of the deeming rates freeze does not mean the deeming rates will increase automatically after 30 June, 2025. A decision of the Government would be required to change the deeming rate settings."
Deeming rates have remained steady at 0.25 per cent for the first $62,600 worth of assets for single pensioners, and 2.25 per cent for anything above that threshold since the freeze was put in place.
However, the Reserve Bank cash rate has risen considerably over the past five years. It sat at 0.25 per cent in May 2020 but currently sits at 3.85 per cent. It had risen to 4.10 per cent prior to a cut to the cash rate on May 20.
National Seniors has also called for the scrapping of the work bonus, which determines how much someone on the Age Pension can earn before it affects their pension.
Instead, the organisation would like to see workers claim a full pension and then pay a reasonable tax rate on top of that.
But the Social Services spokesperson said income and asset tests were an important part of the system.
"Australia's social security system is a non-contributory resident-based system. For this reason, payments including the Age Pension are targeted to those most in need through income and asset tests," they said.
"The Work Bonus benefits Age Pensioners who can and want to work, by disregarding the first $300 they earn from employment each fortnight from the income test.
"Pensioners can build up any unused amount of the $300 in a Work Bonus income bank, up to a maximum of $11,800, to offset future work."
Share your thoughts in the comments below, or send a Letter to the Editor by CLICKING HERE.
Asset tests affecting age pensioners look set to change in weeks with a freeze on deeming rates to end, despite advocacy groups calling for an extension as Australians struggle with the cost-of-living.
Deeming rules assume financial assets earn a specific rate of income, regardless of their actual return, and means test how much pension a person receives as well as eligibility for the Commonwealth Seniors Health Card (CSHC) and aged care fees.
If the rates change and some people are deemed to earn more, this will affect how much pension they could take home, or even the concessions they are eligible for under the CSHC.
Read more from The Senior
Last year, the federal government announced an extension of the deeming rate freeze until June 30, 2025, but no additional extension was announced in this year's budget - meaning thousands of pensioners could see a change in their bank accounts come July 1.
The Senior sent questions to Social Services Minister Tanya Plibersek but a department spokesperson responded, seemingly confirming the freeze is to end.
"The Government has frozen the deeming rates until June 30, 2025," the spokesperson said.
"Regardless of the end of the freeze, the deeming rates can only be changed by a decision of the Minister for Social Services. There has been no decision to change the deeming rates from their current levels."
The spokesperson's comments echoed comments those from former Social Services Minister Amanda Rishworth, just prior to Federal Election in May.
"The expiry of the deeming rates freeze does not mean the deeming rates will increase automatically after 30 June, 2025. A decision of the Government would be required to change the deeming rate settings."
Deeming rates have remained steady at 0.25 per cent for the first $62,600 worth of assets for single pensioners, and 2.25 per cent for anything above that threshold since the freeze was put in place.
However, the Reserve Bank cash rate has risen considerably over the past five years. It sat at 0.25 per cent in May 2020 but currently sits at 3.85 per cent. It had risen to 4.10 per cent prior to a cut to the cash rate on May 20.
National Seniors has also called for the scrapping of the work bonus, which determines how much someone on the Age Pension can earn before it affects their pension.
Instead, the organisation would like to see workers claim a full pension and then pay a reasonable tax rate on top of that.
But the Social Services spokesperson said income and asset tests were an important part of the system.
"Australia's social security system is a non-contributory resident-based system. For this reason, payments including the Age Pension are targeted to those most in need through income and asset tests," they said.
"The Work Bonus benefits Age Pensioners who can and want to work, by disregarding the first $300 they earn from employment each fortnight from the income test.
"Pensioners can build up any unused amount of the $300 in a Work Bonus income bank, up to a maximum of $11,800, to offset future work."
Share your thoughts in the comments below, or send a Letter to the Editor by CLICKING HERE.
Asset tests affecting age pensioners look set to change in weeks with a freeze on deeming rates to end, despite advocacy groups calling for an extension as Australians struggle with the cost-of-living.
Deeming rules assume financial assets earn a specific rate of income, regardless of their actual return, and means test how much pension a person receives as well as eligibility for the Commonwealth Seniors Health Card (CSHC) and aged care fees.
If the rates change and some people are deemed to earn more, this will affect how much pension they could take home, or even the concessions they are eligible for under the CSHC.
Read more from The Senior
Last year, the federal government announced an extension of the deeming rate freeze until June 30, 2025, but no additional extension was announced in this year's budget - meaning thousands of pensioners could see a change in their bank accounts come July 1.
The Senior sent questions to Social Services Minister Tanya Plibersek but a department spokesperson responded, seemingly confirming the freeze is to end.
"The Government has frozen the deeming rates until June 30, 2025," the spokesperson said.
"Regardless of the end of the freeze, the deeming rates can only be changed by a decision of the Minister for Social Services. There has been no decision to change the deeming rates from their current levels."
The spokesperson's comments echoed comments those from former Social Services Minister Amanda Rishworth, just prior to Federal Election in May.
"The expiry of the deeming rates freeze does not mean the deeming rates will increase automatically after 30 June, 2025. A decision of the Government would be required to change the deeming rate settings."
Deeming rates have remained steady at 0.25 per cent for the first $62,600 worth of assets for single pensioners, and 2.25 per cent for anything above that threshold since the freeze was put in place.
However, the Reserve Bank cash rate has risen considerably over the past five years. It sat at 0.25 per cent in May 2020 but currently sits at 3.85 per cent. It had risen to 4.10 per cent prior to a cut to the cash rate on May 20.
National Seniors has also called for the scrapping of the work bonus, which determines how much someone on the Age Pension can earn before it affects their pension.
Instead, the organisation would like to see workers claim a full pension and then pay a reasonable tax rate on top of that.
But the Social Services spokesperson said income and asset tests were an important part of the system.
"Australia's social security system is a non-contributory resident-based system. For this reason, payments including the Age Pension are targeted to those most in need through income and asset tests," they said.
"The Work Bonus benefits Age Pensioners who can and want to work, by disregarding the first $300 they earn from employment each fortnight from the income test.
"Pensioners can build up any unused amount of the $300 in a Work Bonus income bank, up to a maximum of $11,800, to offset future work."
Share your thoughts in the comments below, or send a Letter to the Editor by CLICKING HERE.
Asset tests affecting age pensioners look set to change in weeks with a freeze on deeming rates to end, despite advocacy groups calling for an extension as Australians struggle with the cost-of-living.
Deeming rules assume financial assets earn a specific rate of income, regardless of their actual return, and means test how much pension a person receives as well as eligibility for the Commonwealth Seniors Health Card (CSHC) and aged care fees.
If the rates change and some people are deemed to earn more, this will affect how much pension they could take home, or even the concessions they are eligible for under the CSHC.
Read more from The Senior
Last year, the federal government announced an extension of the deeming rate freeze until June 30, 2025, but no additional extension was announced in this year's budget - meaning thousands of pensioners could see a change in their bank accounts come July 1.
The Senior sent questions to Social Services Minister Tanya Plibersek but a department spokesperson responded, seemingly confirming the freeze is to end.
"The Government has frozen the deeming rates until June 30, 2025," the spokesperson said.
"Regardless of the end of the freeze, the deeming rates can only be changed by a decision of the Minister for Social Services. There has been no decision to change the deeming rates from their current levels."
The spokesperson's comments echoed comments those from former Social Services Minister Amanda Rishworth, just prior to Federal Election in May.
"The expiry of the deeming rates freeze does not mean the deeming rates will increase automatically after 30 June, 2025. A decision of the Government would be required to change the deeming rate settings."
Deeming rates have remained steady at 0.25 per cent for the first $62,600 worth of assets for single pensioners, and 2.25 per cent for anything above that threshold since the freeze was put in place.
However, the Reserve Bank cash rate has risen considerably over the past five years. It sat at 0.25 per cent in May 2020 but currently sits at 3.85 per cent. It had risen to 4.10 per cent prior to a cut to the cash rate on May 20.
National Seniors has also called for the scrapping of the work bonus, which determines how much someone on the Age Pension can earn before it affects their pension.
Instead, the organisation would like to see workers claim a full pension and then pay a reasonable tax rate on top of that.
But the Social Services spokesperson said income and asset tests were an important part of the system.
"Australia's social security system is a non-contributory resident-based system. For this reason, payments including the Age Pension are targeted to those most in need through income and asset tests," they said.
"The Work Bonus benefits Age Pensioners who can and want to work, by disregarding the first $300 they earn from employment each fortnight from the income test.
"Pensioners can build up any unused amount of the $300 in a Work Bonus income bank, up to a maximum of $11,800, to offset future work."
Share your thoughts in the comments below, or send a Letter to the Editor by CLICKING HERE.
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