Superannuation Deeming Rates

The superannuation deeming rates refer to the income rate that your superannuation or pension savings are assumed to earn for Centrelink, DVA, or aged care purposes.

Your retirement savings will either be in superannuation ‘accumulation’ phase or superannuation ‘pension’ phase.

Either way, both your accumulation account and non-defined benefit pension account will be deemed to earn a specific rate of income for ‘income test‘ and ‘aged care means tested fee’ purposes.

However, there are some exceptions.

What are the Superannuation Deeming Rates?

At time of writing, the deeming rates that apply to your superannuation savings are as follows:

If you are a single person, your superannuation is deemed to earn 1.75% p.a. on the first $50,200 of the balance and 3.25% p.a. on any amount above.

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If you are a member of a couple, the first $83,400 of you and your partner’s combined assets is deemed to earn 1.75% p.a. and 3.25% p.a. on any amount above.

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Superannuation Deeming Rates Example

Example 1

A 68 year old single person with $200,000 in a superannuation accumulation account will be deemed to earn $5,747 p.a., calculated as follows:

Superannuation Balance Deeming Rate (%) Deemed Amount ($)
First $50 200 1.75% p.a. $878.50
Next $149 800 3.25% p.a. $4868.50
Deeming on $200 000 Balance $5747

Example 2

A couple, both aged 70, have account based pension balances of $400,000 and $300,000, respectively. These income streams commenced on 1 July 2016. Their pension balances will be deemed to earn $21,499 p.a., calculated as follows:

Superannuation Balance Deeming Rate (%) Deemed Amount ($)
First $83 400 1.75% p.a. $1459.50
Next $616 600 3.25% p.a. $20039.50
Deeming on $700 000 Balance $21499


What if I Earn More On My Superannuation than the Deeming Rates?

It doesn’t matter whether you earn more or less than the superannuation deeming rates. The amount your superannuation actually earns is irrelevant.

For income assessment purposes, only the deeming rates will apply.

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So, in the example above, had the 68 year old single person actually earned $15,000 on their superannuation balance throughout the year, equating to 7.5% p.a., they would still only be assessed as earning $5,747 p.a. as calculated above for Centrelink, Department of Veteran Affairs (DVA) and Aged Care purposes.

Superannuation Deeming Rates Exceptions

There are two exceptions to having your superannuation savings assessed under the deeming rates.

Firstly, if your superannuation savings are preserved (e.g. inaccessible in an accumulation account because you have not yet met a superannuation condition of release), the balance will generally be exempt from assessment under the ‘assets test’ and will not be deemed to earn an income under the ‘income test’ for social security and aged care purposes.


Secondly, if you commenced your superannuation allocated/account based pension prior to 1 January 2015 and were in receipt of a social security payment or allowance on 1 January 2015, the asset value will be assessed under the ‘assets test’; however the income will be assessed using the Centrelink Deductible Amount Method.

The Centrelink Deductible Amount Method is a calculation based on when you started your pension and what your life expectancy (relevant number)was at that time, to determine your pension deductible amount. This deductible amount then reduces the assessment of the actual income you are receiving from your pension. The Deductible Amount Method still applies to some other forms of income streams, such as annuities. Defined benefit income streams may also include a deductible amount.


How Are Deeming Rates Determined

Deeming rates are set by the minister of social security based on investments and reasonable earning rates available to individuals at any given time.

How Is Deemed Income Applied?

Calculated deemed income on your superannuation is added to other types of income, including deeming on non-superannuation financial assets, to determine how much income will be applied under income test assessment.

Chris Strano

Hi, I hope you enjoyed reading this article. If you want my team and I to help with your retirement planning, click here. If you prefer a DIY approach, then check out the SuperGuy HUB. Thanks for stopping by - Chris.

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  1. Craig O'Loughlin

    Great info..
    I understand it doesn’t matter what your allocated pension earns, the deeming rates apply, is it the same for how much you draw as a pension..

    E.g if i draw $25,000 a year from my allocated pension is this irrelevant for Centrelink because the deeming rates apply?

    • Chris Strano

      Thanks Craig! Yes, generally you are correct. Any income withdrawn from an allocated pension is irrelevant, provided the pension is not a grandfathered pension. A grandfathered pension is a pension commenced prior to 1 Jan 2015, where the recipient has been in receipt of social security benefits continuously since such time.
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      What is a Grandfathered Pension?
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