Newspaper article The Observer (Gladstone, Australia)

Researching Interest Rates to Your Benefit

Newspaper article The Observer (Gladstone, Australia)

Researching Interest Rates to Your Benefit

Article excerpt

DESPITE the drop in interest rates, the Centrelink deeming rates remain unchanged. However, as a small token to pensioners, the thresholds for higher rates have increased slightly.

Let's refresh our knowledge of the deeming rules that determine the income that Centrelink applies to pensioners' financial assets. The rates for a couple are 3% on the first $75,600 and 4.5% on the balance. For a single pensioner the first $45,400 is assessed at 3%, and the balance at 4.5%. The assets that are subject to deeming include bank accounts, shares and managed funds, debentures, superannuation when the owner has reached pensionable age, and deprived assets such as excess gifts.

For example, if a couple of pensionable age had financial assets totalling $375,600, the income from these would be deemed by Centrelink to be $15,758 made up of 3% on the first $75,600 ($2,268) and 4.5% on $280,000 ($13,500).

These rates apply irrespective of the amount actually earned on investments, so pensioners can gain an advantage if they can get safe returns that are higher than the deeming rates. …

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