Australia. Pension payments could increase with change to deeming rate
More than half a million Australians could have their pension payments increased with the government on the cusp of making a significant change. Labor claims if the government lowers the deeming rate by the same amount the Reserve Bank has lowered interest rates, some part-pensioners will be anywhere between $62 and $3875 a year better off.The government is unlikely to lower it by that much because it would almost wipe out its surplus but hundreds of thousands of pensioners will almost certainly get more cash sometime this week.
Deeming is how the government works out the income made from a person’s investments – regardless of what they really earn.Currently, the government assumes pensioners are getting a 3.25 per cent return on any investment over $51,200 and 1.75 per cent on anything less than that.They’re allowed to earn up to $172 per fortnight in extra income before their pension payments are reduced.But with the cash rate now at one per cent, anyone who has money tied up in savings accounts or term deposits isn’t making anywhere near that, so they’re having their pension payments unfairly reduced and are living off less money.
Read More: @9 News
