If you have money in the bank, shares or other financial investments, Services Australia assumes they earn a set rate of income. This is called deeming. The deemed income is assessed under the Income test and can affect both your eligibility for the Age Pension and how much you receive.
This guide explains which investments are deemed, the deeming rates that apply from 20 September 2026, how deeming affects your Age Pension and how to work out your deemed income.
What is deeming?
Rather than asking you to report the actual interest, dividends and returns on each financial investment, Services Australia applies set deeming rates to the total value of your financial investments. The result is your deemed income.
Your deemed income is added to any other assessable income you have, such as wages or rent, and the total is assessed under the Income test.
Which financial investments are deemed?
Deeming applies to:
- bank, building society and credit union accounts, including savings and everyday transaction accounts, whatever your institution calls them
- term deposits, debentures and bonds
- listed shares and securities
- managed investments
- mortgage offset accounts, but not lines of credit
- superannuation once you reach Age Pension age, and some income streams, such as account-based pensions
- gold, silver and platinum bullion held as an investment.
Some less obvious financial investments are deemed too, including church development funds, money you have lent to someone and cash on hand. Cash on hand does not mean the money you keep for day-to-day spending. It means money held in a safety deposit box, held by someone else for you, or kept at home instead of in a bank account.
What if my investments earn more or less than the deeming rate?
Only the deemed amount is counted under the Income test. If your investments earn more than the deeming rates, the extra is not counted. If they earn less, or even make a loss, the deemed amount is still counted.
Deeming is based on the current value of your financial investments, not what you originally paid for them. For example, if shares you bought for $100,000 are now worth $80,000, deeming applies to their current value of $80,000.
Are there any exemptions?
An investment is not exempt from deeming simply because it performs poorly or you have difficulty accessing your money. However, some failed financial investments can be exempt if they meet the relevant rules and Services Australia grants an exemption.
Money held in an account solely for managing funding from a National Disability Insurance Scheme (NDIS) package is also exempt from deeming.
What are the deeming rates from 20 September 2026?
There are two deeming rates. A lower rate applies to your financial investments up to a threshold, and a higher rate applies to anything above it. The threshold depends on whether you are single or a member of a couple.
| Your situation | 1.75% applies to | 3.75% applies to |
|---|---|---|
| Single | The first $66,800 | Anything over $66,800 |
| Couple, combined | The first $110,600 | Anything over $110,600 |
Source: Services Australia. Rates apply from 20 September 2026. Thresholds apply from 1 July 2026.
For a couple, your financial investments are combined and the couple deeming thresholds are applied to the total.
Both deeming rates rose by 0.5 percentage points on 20 September 2026, from 1.25% and 3.25%. The rates are set by the Minister for Social Services, and the thresholds are indexed on 1 July each year.
How do deeming rates affect my Age Pension?
The deeming rates do not tell you how much your Age Pension will be reduced. They are used to calculate an amount of income from your financial investments.
That deemed income is added to your other assessable income and compared with the Age Pension income free area. If your total income is below the income free area, the Income test does not reduce your pension. If it is above the income free area, your pension may be reduced.
Here is how the two deeming rates work in practice.
Example: single person
- You have $75,000 of financial investments.
- The first $66,800 is deemed to earn 1.75%, which is $1,169.00.
- The remaining $8,200 is deemed to earn 3.75%, which is $307.50.
- Your total deemed income is $1,476.50 a year, or $56.79 a fortnight.
The $56.79 counts towards the Income test but, on its own, is below the single income free area of $226 a fortnight, so it would not reduce your pension.
Example: couple
- You have $150,000 of combined financial investments.
- The first $110,600 is deemed to earn 1.75%, which is $1,935.50.
- The remaining $39,400 is deemed to earn 3.75%, which is $1,477.50.
- Your total deemed income is $3,413.00 a year, or $131.27 a fortnight combined.
The $131.27 counts towards your Income test but, on its own, is below the combined income free area of $396 a fortnight, so it would not reduce your pensions.
You do not need to run these numbers yourself. Our Age Pension calculator works out your deemed income as part of estimating your pension.
How is my superannuation treated under deeming?
Once you reach Age Pension age, your superannuation in accumulation phase is deemed. Superannuation belonging to a partner under Age Pension age is generally not counted while it remains in accumulation phase.
Account-based pensions started on or after 1 January 2015 are generally deemed in the same way as other financial investments. Some account-based pensions that started before 1 January 2015 may continue to be assessed under the older rules if they meet the grandfathering requirements.
Summary
Deeming means Services Australia assumes your financial investments earn a set rate of income, regardless of what they actually earn. A lower rate applies up to a threshold and a higher rate applies above it.
Your deemed income is added to your other assessable income and compared with the Age Pension income free area. If your total income is above the income free area, it may reduce your pension under the Income test.
Services Australia does the calculation for you, but knowing which investments are deemed and which rates apply makes it easier to check your payment and understand why it changes.
The information in this guide is general in nature.