Deeming: how your savings are assessed
Services Australia assumes your financial assets earn a set rate — whether they do or not. Here is the math, with a worked example.
What deeming is
Deeming is how Services Australia works out the income from your financial assets — bank accounts, term deposits, shares, managed investments and superannuation once you reach Age Pension age. Instead of using your actual interest or dividends, it assumes your assets earn a set rate. Only the deemed amount counts under the income test: if your investments earn more than the deemed rate, the extra is not counted; if they earn less, the deemed amount is still counted.
Deeming exists to simplify assessment and to stop the system rewarding low-return holdings. It also means a pensioner with money in a low-interest account is assessed on income they never received — which is why deeming surprises retirees with large savings balances.
The rates from 20 September 2026
From 20 September 2026, the first $66,800 of a single person's financial investments is deemed to earn 1.75% a year, and anything above that is deemed to earn 3.75%. For a couple, the lower rate applies to the first $110,600 of combined financial investments. The deeming thresholds are adjusted each July, so these thresholds will move again.
Worked example
A single pensioner with $100,000 in financial assets: the first $66,800 is deemed at 1.75%, which is $1,169 a year; the remaining $33,200 is deemed at 3.75%, which is $1,245 a year. Total deemed income is $2,414 a year, or about $92.85 a fortnight. That is well under the $226 income free area, so deeming alone would not reduce this pensioner's pension — but it is added to all other income before the income test is applied.
The same $100,000 also counts under the assets test. The two tests run side by side, and Services Australia pays the lower result. Deeming only affects the income test side of the calculation.
Frequently asked questions
My term deposit pays 1%. Why am I assessed at 1.75% or 3.75%?
Because deeming does not use your actual return. Services Australia assumes a set rate on your financial assets regardless of what they really earn.
Does deeming apply to my superannuation?
Yes, once you reach Age Pension age — your super balance is deemed under the income test and counted under the assets test. Before pension age, super in the accumulation phase is generally not counted.
Do the deeming thresholds change?
Yes. The thresholds are adjusted each July, and the rates themselves are set by the government and change with market interest rates. Check the current thresholds on Services Australia's deeming page.
Official links
Verify every figure on this page at Services Australia: