Deeming Rates 2026 Explained: 3 Ways to Restructure Your Assets and Reduce Deemed Income

by Jul 27, 2026Centrelink & Age Pension

In this guide

If your Age Pension payment dropped and you can’t work out why, deeming rates 2026 age pension rules are probably the reason. Centrelink doesn’t look at what your savings and investments actually earn.

Instead, it assumes you earn a fixed return, whether your money sits in a term deposit, a bank account, or shares.

This guide breaks down exactly how deeming rates 2026 age pension calculations work, what the current thresholds mean for Adelaide retirees, and three practical ways to restructure your assets and keep more of your pension.

What Are Deeming Rates 2026 and Why Do They Matter?

Centrelink uses deeming rates to estimate the income your financial assets generate, regardless of your real returns.

This system removes the need to track every bank statement and dividend payment. Instead, Services Australia applies a standard formula to your total financial assets and treats the result as “deemed income” under the Age Pension income test.

Here’s the catch. If your actual returns run higher than the deemed rate, Centrelink still only counts the deemed amount, so you benefit. But if your real returns sit below the deemed rate, as they often do with low-interest savings accounts, you lose out.

Centrelink still assumes you earned the higher deemed amount, and this pushes your assessed income up and your pension down.

This is exactly why so many Adelaide retirees see their pension shrink even when their bank balance barely moves. The deeming rates 2026 age pension formula doesn’t care what you actually earned; it only cares what the government assumes you earned.

Deeming Rates 2026: The Current Rates and Thresholds

Under the deeming rates 2026 age pension rules, Centrelink applies two tiers:

  • 1.25% on financial assets up to the lower threshold
  • 3.25% on financial assets above that threshold

These thresholds differ for singles and couples, and they apply to your combined financial assets, not just one account. Financial assets covered under deeming include:

  • Savings accounts and term deposits
  • Shares and managed funds
  • Superannuation balances (once you reach Age Pension age)
  • Account-based pensions and annuities

Centrelink adds up all your financial assets, applies 1.25% to the portion below the threshold, and 3.25% to everything above it. The total becomes your deemed income, which then feeds into the Age Pension income test alongside any other income you receive.

Understanding where your assets sit against these thresholds is the first step to managing your deeming rates 2026 age pension outcome.

Many retirees don’t realise how close they sit to the upper threshold until they see their payment drop.

Deeming Rates vs Real Investment Return: Why the Gap Hurts

Real investment returns fluctuate.

Term deposit rates rise and fall with the cash rate, share dividends vary year to year, and managed funds can swing with market conditions. Deeming rates don’t move with any of that.

Once Centrelink sets the deeming rates 2026 age pension figures, they apply uniformly across nearly every financial asset you hold, regardless of what each asset actually pays.

This mismatch creates a real problem for conservative savers. If you hold most of your money in a low-interest savings account earning less than 1.25%, Centrelink still assumes you’re earning the deemed rate on it.

If your assets sit above the upper threshold, Centrelink assumes a 3.25% return even if your actual portfolio return sits well below that.

The result: your assessed income can look far higher than your real income, and that gap directly reduces your fortnightly Age Pension payment.

This is the core reason deeming rates 2026 age pension changes catch so many retirees off guard, especially those who assume Centrelink simply checks their bank statements.

Three Ways to Restructure Your Assets and Reduce Deemed Income

You can’t opt out of deeming, but you can manage how your assets sit within the system. Here are three strategies worth discussing with a financial adviser who understands the deeming rates 2026 age pension framework.

1. Consider a Funeral Bond or Prepaid Funeral

Funeral bonds up to a set limit sit outside the assets test and outside deeming altogether.

Moving a portion of your savings into a funeral bond removes that amount from your deemed income calculation entirely, while covering a cost you’ll need to plan for regardless.

2. Review Your Home Improvements and Non-Financial Assets

Money spent on your principal home doesn’t count as a financial asset under deeming rules, because your home is exempt from the assets test.

Retirees sometimes redirect surplus savings into home renovations or maintenance, which reduces financial assets subject to deeming while improving where they live.

3. Rebalance Between Financial and Gifted or Structured Assets

Gifting has strict limits and timing rules, so this strategy needs careful planning around Centrelink’s gifting thresholds.

Done correctly, though, restructuring how assets are held, and when, can shift your position relative to the deeming rates 2026 age pension thresholds and reduce your assessed deemed income over time.

Each of these strategies interacts with other Centrelink rules, including the assets test, gifting rules, and home ownership status. Getting the order and timing wrong can create bigger problems than the one you’re trying to solve, so professional advice matters here.

Why Adelaide Retirees Need Local, Up-to-Date Advice

Age Pension rules change regularly, and the deeming rates 2026 age pension figures may be reviewed again as economic conditions shift.

Adelaide retirees managing superannuation, term deposits, and investment properties alongside the Age Pension face a particularly complex set of interactions between the income test and the assets test.

A generic online calculator can’t account for your full financial picture, your home equity, your super drawdown strategy, or your family’s gifting history.

Local advice matters because Centrelink assessments depend on the specific mix of assets you hold, not just headline deeming rates 2026 age pension figures published in a fact sheet.

Get Your Age Pension Strategy Reviewed

Deeming rates 2026 age pension rules affect nearly every retiree with savings, super, or investments, whether you realise it or not.

The good news is that with the right structure, you can often reduce your assessed deemed income and protect more of your pension.

Lincoln Wealth works with Adelaide retirees to review how deeming rates 2026 age pension calculations apply to their specific situation, and to build a practical plan around the assets test, income test, and gifting rules.

Waiting until your next Centrelink review often means losing months of pension you could have kept, so it pays to act early rather than after a payment drop arrives.

If your pension has dropped or you simply want clarity before it does, speak with the Centrelink Age Pension team at Lincoln Wealth for a tailored review of your assets and options.

Book a conversation today and find out exactly how deeming rates 2026 age pension rules apply to your savings, your super, and your long-term retirement plan.

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General Advice Warning: This article contains general information only and does not take into account your individual objectives, financial situation, or needs. Before making any financial decisions, you should consider whether the information is appropriate to your circumstances and seek personal financial advice. Nasser Zreika and Lincoln Wealth Advisers are Authorised Representatives of Synchron, AFS Licence No. 243313.