The amount of Age Pension that you are entitled to is determined by an Income Test and an Assets Test (assuming that you meet all other eligibility criteria).

The Assets Test is broadly all of your investment assets (this excludes your main residence).

The Income Test is based on all of your sources of income or ‘deemed’ income.

‘Deeming’ is the term used for the rate at which Centrelink assume certain investment assets earn an income – regardless of what they actually earn.

The Deeming rates for Age Pension assessment generally apply to all investment assets excluding an investment property, superannuation pensions and annuities.

Centrelink Income Assessment of Investment Properties

The income assessed for an investment property is the rent that you receive, less expenses relating to the property.

Centrelink Income Assessment of Pensions and Annuities

The gross value of the income received from a Pension or Annuity is reduced by a Deductible Amount. The net amount is then counted as income towards the Centrelink Income Test.

The Deductible Amount is basically calculated by dividing the purchase price of the Pension or Annuity by the term or life expectancy factor.

More information on the Centrelink Deductible Amount Formula.

More information on changes to Centrelink Deductible Amount as of 1 Jan 2015 – account based pensions

More information on changes to Centrelink Deductible Amount as of 1 Jan 2016 – defined benefit pensions

Deeming Rates for Age Pension Assessment

The Deeming rates for Age Pension assessment for most other investment assets are shown in the table below (as of 29 Jan 2014):


Single Deeming Rate
First $46 600 2% p.a.
Amount over $46 600 3.5% p.a.


Member of a Couple Deeming Rate
First $77 400 2% p.a.
Amount over $77 400 3.5% p.a.

For example, if you are a member of a couple and had $200,000 in cash and term deposits, the first $77,400 would be assumed to earn 2% p.a. ($1,548 p.a.) and the remaining $122,600 would be deemed to earn 3.5% p.a. ($4,291 p.a.). Combining these amounts, $5,839 income would be deemed to be earned from these investments for Centrelink Age Pension purposes.

If this $200,000 had in fact earned in excess of this amount, the excess would not be counted towards the Income Test assessment. Conversely, if your investments had earned less than this amount, Centrelink would still count the ‘deemed’ amount as part of the Income Test assessment.

Deeming Rates for Age Pension Exclusions

There are a few exclusions for deeming of investments under the Income Test.

These exclusions may include:

  • Where a financial investment has failed
  • Some superannuation investments where funds are fully preserved or inaccessible

If you believe that you have an asset that should be excluded from the deeming provisions, you should contact Centrelink. The best number for Age Pension recipients is 132 300 Mon- Fri 8am – 5pm.

If you would like anything clarified or have any further questions about the Deeming Rates for Age Pension Assessment or any other topics, please do not hesitate to leave a comment.

Chris Strano

Chris Strano created SuperGuy to help the average punter navigate through the complex and ever-changing super rules. It has since become one of Australia's leading digital super resources. Subscribe to SuperGuy's YouTube channel for the latest strategies to boost your super savings.

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