Age Pension Deeming Rates 2026: How $300,000 in the Bank Is Assessed (Worked Example)
Centrelink does not look at the interest your money actually earns. Instead it deems your financial assets to earn a set rate: 1.25% on the first slice and 3.25% on the rest. For a single person with $300,000 in savings, that produces $8,466 a year in “deemed income” — about $325.62 a fortnight — which is what the income test counts, regardless of what the bank actually pays you.
This guide walks through the exact calculation, line by line, then shows how that deemed figure flows into the Age Pension income test so you can see what it does to a real payment. Every rate and threshold below is the current published figure from Services Australia.
The 2026 deeming rates and thresholds
Deeming uses two rates and one threshold. Below the threshold, your money is deemed to earn the lower rate; above it, the upper rate. The thresholds differ for singles and couples. These are the rates set by the Minister for Social Services and published by Services Australia — Deeming (Age Pension).
| Situation | Lower rate (1.25%) applies to | Upper rate (3.25%) applies to |
|---|---|---|
| Single | First $64,200 of financial assets | Everything above $64,200 |
| Couple (at least one gets a pension) | First $106,200 combined | Everything above $106,200 combined |
| Couple (neither gets a pension) | First $53,100 each | Everything above $53,100 each |
Note the couple threshold is a single combined figure ($106,200) where at least one partner receives a pension — not $53,100 per person. This matters: a couple gets one shared lower-rate band, while two singles would each get their own $64,200. Source: Services Australia — Deeming.
Worked example: $300,000 in the bank, single pensioner
Worked example — Robyn, 68, single
Robyn is single and has reached Age Pension age. She holds $300,000 in financial assets — a mix of a high-interest savings account, a term deposit, and an account-based pension drawn from her super. She wants to know what income Centrelink will deem her to earn.
Step 1 — Split her money at the single threshold ($64,200).
- First $64,200 → deemed at the lower rate, 1.25%
- Remaining $300,000 − $64,200 = $235,800 → deemed at the upper rate, 3.25%
Step 2 — Apply each rate.
- $64,200 × 1.25% = $802.50
- $235,800 × 3.25% = $7,663.50
Step 3 — Add the two slices.
$802.50 + $7,663.50 = $8,466.00 of deemed income per year.
Step 4 — Convert to a fortnightly figure for the income test.
Centrelink assesses income per fortnight. There are 26 fortnights in a year:
$8,466.00 ÷ 26 = $325.62 per fortnight (rounded).
So even if Robyn’s actual interest is only, say, $5,500 a year (a real possibility on conservative deposits), Centrelink still counts $8,466. And if her shares and account-based pension happen to return more than 3.25%, the extra is invisible to the income test — deeming caps the assessable income either way.
The maths in one table
| Slice | Amount | Rate | Deemed income |
|---|---|---|---|
| Lower band | $64,200 | 1.25% | $802.50 |
| Upper band | $235,800 | 3.25% | $7,663.50 |
| Total deemed | $300,000 | — | $8,466.00 / yr |
| Per fortnight | — | ÷ 26 | $325.62 |
Feeding the deemed income into the income test
Deemed income is not the end of the story — it is an input to the Age Pension income test. For a single pensioner, the first $218 of income per fortnight is the “income free area” and is ignored. Above that, the pension reduces by 50 cents for every dollar of assessable income. (For couples it is $380 combined free area, reducing 25 cents in the dollar each.) Source: Services Australia — Income test for Age Pension.
Continuing Robyn’s example — the income-test reduction
Assume the $325.62 fortnightly deemed income is Robyn’s only assessable income (no wages, no Work Bonus to apply).
- Income above the free area: $325.62 − $218.00 = $107.62
- Pension reduction: $107.62 × $0.50 = $53.81 per fortnight
So the income test would trim roughly $53.81 a fortnight off her maximum rate — if the income test is the binding test. Centrelink applies both the income test and the assets test and pays whichever produces the lower pension. With $300,000 in assets, the assets test is often the one that bites for a single homeowner, so always check both. The actual paid rate is the lower of the two results.
Why deeming applies regardless of real returns
Deeming exists so that everyone’s financial assets are assessed on the same consistent basis, no matter how they invest. It also removes the incentive to chase a 0% transaction account just to look “poorer” to Centrelink. The trade-off: it can over-state or under-state your real income.
- If you earn less than the deemed rate (e.g. money sitting in a low-rate account), you are still assessed on the deemed amount — that hurts.
- If you earn more than the deemed rate (e.g. strong share dividends or franking credits, or a high-paying term deposit), the surplus is ignored — that helps.
You cannot opt out, and you cannot ask Centrelink to use your actual interest instead. Deeming is the rule.
Which assets are deemed — and which are not
Deeming applies to your financial assets. Common items below; confirm your own holdings against Services Australia — Deeming.
| Generally deemed | Generally not deemed (assessed differently) |
|---|---|
| Savings & transaction accounts | Your home (if it’s your principal residence) |
| Term deposits | Most income streams paid as a defined-benefit/lifetime pension (special rules) |
| Listed shares & managed funds | Personal contents and your car (assets test only) |
| Super in pension phase (account-based pensions) | Super while you are under Age Pension age and it’s in accumulation (not assessed yet) |
| Cash, gold/bullion, money on loan to others | Investment property & business assets (assessed under their own rules) |
A frequent surprise: once you reach Age Pension age, your superannuation is deemed — both in accumulation and in account-based pension phase — even though it felt “invisible” before. That is why moving to retirement can change your assessment overnight.
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Frequently asked questions
What are the current Age Pension deeming rates?
The lower deeming rate is 1.25% and the upper deeming rate is 3.25%. For a single person, the lower rate applies to the first $64,200 of financial assets and the upper rate applies to everything above. For a couple where at least one partner gets a pension, the lower rate applies to the first $106,200 combined. These rates are set by the Minister for Social Services and published by Services Australia.
How is $300,000 in the bank assessed for a single pensioner?
The first $64,200 is deemed at 1.25% ($802.50) and the remaining $235,800 is deemed at 3.25% ($7,663.50). Added together that is $8,466 of deemed income per year, or about $325.62 per fortnight, which is then fed into the income test.
Does deeming use the actual interest I earn?
No. Deeming ignores your real return entirely. Whether your money earns more or less than the deemed rates, Centrelink only counts the deemed figure. This applies to savings, term deposits, shares, managed funds and super in pension phase alike.
How does deemed income affect my pension payment?
Deemed income is added to any other assessable income. For a single person the first $218 per fortnight is the income free area; above that the pension reduces by 50 cents per dollar. Centrelink runs both the income test and the assets test and pays whichever gives the lower amount.
Is my super deemed once I reach Age Pension age?
Yes. Once you reach Age Pension age, your superannuation is counted and deemed — both in accumulation and in account-based pension phase. Before Age Pension age, super in accumulation is generally not assessed for the Age Pension.
How are the deeming thresholds different for couples?
A couple where at least one person receives a pension shares a single combined lower-rate threshold of $106,200 — not $64,200 each. If neither partner gets a pension, each person is assessed on $53,100 at the lower rate. Always confirm your exact situation with Services Australia.
General information, not personal Australia tax/legal advice. Verify with a qualified professional.
Sources: Services Australia — Deeming (Age Pension); Services Australia — Income test for Age Pension. Figures current as at the 2026 published rates; rates are reviewed periodically by the Minister for Social Services.