What is deeming?
Centrelink and Veteran’s Affairs calculate your Income Test assessing income from certain assets to determine the level of benefit entitlements due. This assessment element is Deeming. This calculation assumes you earn a prescribed return on ‘financial’ assets. The deemed rate of return is in spite of the actual rate of interest or capital growth they generate.
The income test excludes any excess of actual earnings above the deemed rate. Accordingly, it will not affect your Centrelink payment. However, you will be assessed as earning income at the deemed rate if the asset earns less than the deemed rate.
The income test then combines the deemed income with income earned from other sources, such as employment, rent, business income and pension and annuity income to determine the level of pension, allowance or benefit payable under the income test.
The Government changes the deeming rate from time to time to reflect market conditions and most financial institutions offer special accounts that pay interest at the deeming rate. You should review the Deeming page on the government’s Human Services website for current rates applicable.
How does deeming work?
To calculate the amount of deemed income you have –
- apply the relevant ‘deeming rate’ to
- the amount you hold in financial assets.
Currently – as at June 2016, the deeming rates are:
| Deeming Rates | Singles | Pensioner Couples | Non-pensioners couples |
| 1.75% | First $48,600 | First $80,600 | First $40,300 |
| 3.25% | Balance above $48,600 | Balance above $80,600 | Balance above $40,300 |
For current information, values and methods of calculation refer to Centrelink’s pages: Changes to the Deeming rates; and Deeeming – how it’s calculated.
For pensioner couples (where at least one partner is receiving a pension), the financial assets are combined, for non-pensioner couples (where neither partner is receiving a pension) financial assets are assessed individually.
Which assets are assessed using deeming?
Deeming applies to financial investments, which include:
- Cash
- Bank, building society, credit union accounts and term deposits
- Most friendly society bonds and insurance bonds
- Managed investments and shares in public companies
- Account-based income streams from 1 January 2015
- Bonds, debentures and loans, including private loans
- Gifts above the allowed amount
- Gold and other bullion
Financial investments do not include:
- Your home and its contents, cars, boats and caravans
- Antiques, stamp or coin collections
- Superannuation under age pension age
- Standard life insurance policies
- Funeral bonds
- Real property
- Shares in private companies, discretionary trusts
- Superannuation pensions, allocated pensions, term allocated pensions, allocated annuities or immediate annuities
The assessment of income for Social Security purposes can be complex. You should seek professional advice from a financial adviser if you are not clear as to how your situation may be assessed.
How can a Continuum Financial Planners adviser help me with this?
Deeming can catch you out with your planning for Centrelink/ DVA support. However, with careful attention to structure and strategy –
- before parting with lump sums of your money
- no matter how large – or small; nor
- to whom you are giving it
– optimum wealth management benefits can be obtained.
To make an appointment with one of our experienced advisers to analyse your situation, either –
- phone our office on 07-34213456, or
- at your convenience, use the linked Book A Meeting facility.
We acknowledge the resources of Securitor Financial Group Limited in drafting the majority of the detail in the above article, It has been extracted from the Support Information to advice document templates provided by that Dealer Group.
(This post was originally posted by us in January 2010. We occasionally refersh/ update it, most recently in June 2025.)
