The Federal Government has announced it will spend $600 million on a pension boost for older Australians, under long-awaited changes to deeming rates.
Key points:
- The deeming rate will decrease from 1.75 per cent to 1 per cent for financial investments up to $52,000 (single pensioners) and $86,000 (couples)
- The upper deeming rate will be cut to 3 per cent
- The changes mean pensioners will see up to $1,053 extra a year in their pockets
The Government will promise up to $1,053 a year for part-pensioners and those who receive other federal allowances in a long-awaited change to the rules on earnings from term deposits, shares and other investments.
Retiree groups have been urging the Government to cut the official deeming rate, which assumes how much a pensioner earns on private investments.
The lower deeming rate will decrease from 1.75 per cent to 1 per cent for financial investments up to $52,000 for single pensioners and $86,000 for pensioner couples … while the upper deeming rate will be cut to 3 per cent.
"It will mean more money in the pockets of older Australians," Minister for Families and Social Services Anne Ruston said in a statement.
"Under the new rates age pensioners whose income is assessed using deeming will receive up to $40.50 a fortnight for couples, $1,053 extra a year, and $31 a fortnight for singles, $804 a year."
Pensioners will see the extra money come into their bank accounts from the end of September, in line with the regular indexation of the pension. The payments will be backdated to July 1.
More to come.
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