From 20 September 2026, the Australian Age Pension deeming rates are 1.75% on financial assets up to the relevant threshold and 3.75% on the portion above it. The threshold is $66,800 for a single pensioner and $110,600 for a pensioner couple. These are assumed rates used in the income test, not forecasts of what your investments actually earned.
This guide shows how to calculate indicative deemed income, how it is combined with other income, why the assets test can produce a different pension result, and how to check your circumstances in Services Australia’s Payment Finder.
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Current Age Pension deeming rates and thresholds
The Department of Social Services schedule effective from 20 September 2026 has two bands. The higher percentage applies only to the balance above the threshold; it is not applied to the entire account balance.
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| Situation | Amount covered by lower rate | Lower rate | Amount above threshold | Higher rate |
|---|---|---|---|---|
| Single pensioner | First $66,800 | 1.75% | Any balance over $66,800 | 3.75% |
| Pensioner couple | First $110,600 combined | 1.75% | Any combined balance over $110,600 | 3.75% |
The $110,600 couple threshold applies when one or both partners receive a pension. A couple who are not pensioners can be subject to different threshold treatment, so that situation should be checked against the current official table rather than assumed to be identical.
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These figures replaced the previous 1.25% and 3.25% rates on 20 September 2026. Guides or spreadsheets using the older percentages can materially understate deemed income.
What deeming means
Deeming is a social-security calculation method. Instead of using the precise interest, dividend or market return earned by each investment, Services Australia applies a prescribed income rate to assessable financial assets. Services Australia spokesperson Hank Jongen described it this way in an official column published on 1 April 2026: Deeming assumes that you receive a set rate of income from these investments.
The result is an annual deemed-income figure. It is then converted to a fortnightly amount for the pension income test. A poor investment return does not automatically reduce the deemed amount, and a return above the deeming rate does not automatically increase it.
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Use this sequence for an indicative calculation. It is not a formal entitlement determination because asset classification, relationship status and special rules can change the assessment.
- Identify assessable financial assets. Add the balances that are subject to deeming after applying any exclusion or special treatment that fits your circumstances.
- Choose the correct threshold. Use the single threshold or the pensioner-couple threshold. Do not use a couple threshold for a single claimant.
- Split the balance into two portions. The first portion runs from zero to the threshold. Only the remainder goes into the higher-rate band.
- Apply each percentage to its portion. Add the two results to obtain annual deemed income.
- Convert to a fortnightly figure. Divide the annual result by 26 when comparing it with fortnightly income-test amounts.
- Add other assessable income. Deemed income is one component of the income test, not the complete income figure.
The basic formula is:
(amount up to threshold × 1.75%) + (amount above threshold × 3.75%) = annual deemed income
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Worked example: single person with $100,000
For a single person with $100,000 in financial assets that are fully subject to deeming:
- The first $66,800 produces $1,169.00 a year ($66,800 × 1.75%).
- The remaining $33,200 produces $1,243.50 a year ($33,200 × 3.75%).
- Total indicative deemed income is $2,412.50 a year.
- That is approximately $92.79 per fortnight ($2,412.50 ÷ 26).
This illustration does not decide whether every dollar is assessable, whether another income stream has special treatment, or whether the assets test will produce a lower pension.
Additional examples
A single person with $50,000 of assessable financial assets remains entirely below the threshold. The indicative result is $875 a year, or about $33.65 per fortnight. No part of that balance is charged at 3.75%.
For a pensioner couple with $200,000 of combined assessable financial assets, the first $110,600 produces $1,935.50 a year and the remaining $89,400 produces $3,352.50. Combined deemed income is therefore $5,288 a year, or about $203.38 per fortnight. Services Australia then considers how the couple’s total assessable income is allocated under the applicable rules.
Which assets can be subject to deeming?
Common financial assets covered by deeming include:
- Bank and savings accounts.
- Term deposits.
- Listed shares and other listed securities.
- Managed investments.
- Loans and debentures.
- Some gifts, where social-security gifting rules still treat the value as assessable.
- Some income streams.
For people over Age Pension age, superannuation may be included as a financial asset. Income streams do not all receive identical treatment: the product type and its purchase or commencement date can matter. An annuity, pension product or other stream should therefore be checked against the specific income-stream guidance instead of automatically being processed under the ordinary two-rate formula.
The amount used for deeming can also differ from the amount you paid for an investment. Keep records of balances, ownership and commencement dates so Services Australia can apply the relevant assessment rules.
How deemed income changes the income-test result
After deemed income is added to other assessable income, the income test compares the total with an income-free area. Services Australia’s standard income-free areas, updated 20 September 2026, are:
| Household | Standard income-free area | Standard reduction above the free area |
|---|---|---|
| Single person | $226 per fortnight | 50 cents of pension for each excess dollar |
| Couple | $396 combined per fortnight | 25 cents of pension for each excess dollar for each member |
For example, if a single person’s total assessable income is $300 per fortnight, the excess over the $226 free area is $74. Under the standard taper, the income-test reduction is $37 per fortnight. Deemed income is included in the $300 only after its annual calculation has been converted to a comparable fortnightly amount.
Transitional-rate pensioners use different income-test taper arrangements. A work bonus or another special circumstance can also change the income counted. Do not apply the standard table to a transitional case or assume that employment income is treated exactly like investment income.
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Why the assets test can produce a different answer
Age Pension entitlement is assessed under both the income test and the assets test. Services Australia pays the lower rate produced by the two tests; either test can reduce the payment to zero. Deeming explains how financial assets contribute income for one test, but it does not by itself determine the final pension.
The assets-test result can depend on:
- Whether you are single or partnered.
- Whether you own your home.
- The value and legal ownership of assets.
- How a particular investment or income stream is classified.
- Whether a special exemption or assessment rule applies.
Consequently, two people with the same deemed income can receive different payments if their homeownership, relationship or wider asset position differs.
Using Services Australia’s calculator
Use Services Australia’s Payment Finder for an indicative personal estimate. Enter current information rather than relying on a calculator saved from an earlier rate period.
- Open Payment Finder and select the Age Pension estimate.
- Enter your relationship status and whether you are a homeowner.
- Report financial assets and other assets using the categories requested, rather than combining everything into one savings figure.
- Enter employment, pension, investment and other assessable income.
- Review the questions about superannuation, income streams, gifts and transitional arrangements.
- Submit the estimate and note separately the income-test and assets-test outcomes, if displayed.
The result is an estimate, not a decision or guarantee of payment. It depends on the information entered and on rules that may require documents or a specialist assessment. Recheck the rates and thresholds whenever the effective date changes.
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Couples, superannuation and income streams: checks before relying on a result
Couples
Use combined financial assets for the pensioner-couple threshold, then follow the calculator’s instructions for how income is attributed between partners. A change in relationship status can change both the threshold and the income-free area.
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Superannuation
Superannuation can be treated differently depending on age and circumstances. Once a person is over Age Pension age, it may be included as a deemed financial asset. Do not assume that an accumulation balance, a pension account and a super income stream are assessed in the same way.
Income streams
Check the official income-stream guidance for the product’s type and commencement or purchase date. Applying the ordinary deeming formula without that check can produce an incorrect estimate.
Common calculation mistakes
- Applying 3.75% to the whole balance: charge the higher rate only to the amount over the applicable threshold.
- Mixing annual and fortnightly units: annual deemed income must be divided by 26 before it is compared with fortnightly income-test figures.
- Using obsolete rates: the 1.25% and 3.25% schedule ended on 20 September 2026.
- Treating actual returns as deemed income: deeming uses a prescribed assumption, whether or not the investment achieved that return.
- Ignoring other income: deemed income is added to assessable income such as employment or investment income.
- Checking only the income test: the assets test can set a lower pension rate.
- Assuming every income stream is identical: product and commencement details can change treatment.
- Using the wrong household category: single, pensioner-couple and non-pensioner-couple rules are not interchangeable.
When to seek individual help
For straightforward balances, Payment Finder can provide a useful starting estimate. If you hold complex investments, multiple income streams, unusual gifting arrangements or transitional-rate entitlements, contact Services Australia’s Financial Information Service through the Older Australians Line. The service explains financial information and its social-security implications; it does not require choosing an investment product.
Have your account statements, investment ownership details, superannuation information, income-stream documents and relationship or homeownership details available. Those facts determine whether the indicative calculation matches the assessment Services Australia can make.
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