Amanda Hardy Lai

Amanda has worked in the financial services industry since 1998 and has been providing financial advice since 2006. Her career has been driven by a commitment to ensuring the highest standards of financial advice and client care. To book a consultation with Amanda click here.
Deeming explained: Three things you didn’t know

Deeming explained: Three things you didn’t know

Deeming is central to how Centrelink calculates Age Pension entitlements, but it’s often misunderstood. Whether your investments earn less (or more) than expected, deeming assumes a standard rate of return – which can affect your pension. Here are three things many retirees don’t know.

1. Centrelink looks at your total balance, not actual earnings
Many think Age Pension assessment will be based on what their bank or super actually pays, or what they are drawing down from their Account-Based Pension (ABP). Instead, Centrelink applies ‘deeming’ rates to financial assets, regardless of real returns.

From 20 September 2025, the lower deeming rate will be 0.75% (on up to $64,200 for singles or $106,200 for couples combined). Anything above that will be deemed to earn 2.75%. (Centrelink announcement). If your assessed income is already affecting your entitlement, this change could reduce your fortnightly payments.

2. Cash for a new home isn’t immune
If you’ve sold your principal home and are holding the proceeds for your next one, those funds are exempt from the assets test for up to 24 months (or 36 with valid delays). But what’s less known is that all that money is still counted under the income test and deemed at the lower rate.

With the deeming rate rising in September, this could now reduce your Age Pension. For example:

$800,000 from a home sale was previously deemed at 0.25%, generating about $2,000 a year in deemed income.
From 20 September 2025, the lower rate rises to 0.75%, increasing deemed income to roughly $6,000 a year.
Under the income test, this could reduce fortnightly Age Pension payments by around $76 while the money sits in the bank until the purchase of a new home is settled.
Whether the income test affects you depends upon which test – assets or income – produces the lower payment. This matters especially for retirees who are still working or have a spouse under Age Pension age earning income.

3. You can be under the asset limit and still get less than the full Age Pension
Even below the Age Pension asset limit, the income test can reduce payments. Take Greg, a single homeowner with $300,000 in financial assets and $20,000 of personal assets. He qualifies for the full rate under the asset test, but deeming changes the picture. Under the previous rates, his deemed income was $5,466 per year, keeping him below the income test threshold for a full Age Pension.

From 20 September 2025, deeming rates rose to:

0.75% on the first $64,200
2.75% on the remainder
Greg’s total deemed income under the new rates will be about $6,966 per year, or $268 per fortnight. The ‘free area’ is $5,668 per year, or $218 per fortnight; then $50 above it reduces the pension by 50 cents per dollar.

With previous deeming rates: Greg gets the full single Age Pension – $1,179 per fortnight, or $30,646.20 per year.

With increased deeming rates: The income test reduces his pension by $25 per fortnight ($650 per year), bringing it down to $1,154 per fortnight, or about $29,997 per year.

So even though Greg is comfortably under the current asset threshold, the change in deeming rates could see his Age Pension trimmed.

Rental income and Your Age Pension: Understanding the rules

Rental income and Your Age Pension: Understanding the rules

Owning an investment property can be a great way to boost your retirement income. And about one in five Australian households owns a property beyond their main home (ABS, 2019–20). So this is something many retirees are juggling when it comes to thinking about retirement.

Here’s the tricky part: Centrelink doesn’t treat rental income the same way the Australian Tax Office (ATO) does. Many people assume the deductions they claim on their tax return – depreciation, borrowing costs, or renovations – will reduce their Age Pension income assessment. That’s not the case, and it can lead to surprises.

Let’s go through the essentials so you can see clearly what counts, what deductions are allowed, and how to avoid negative impacts on your Age Pension.

What counts as rental income?

Centrelink classifies rental income as rent from investment properties or land. Income from boarders or lodgers is assessed separately.

What deductions are allowed?

Centrelink is more selective than the ATO. You can deduct:

Agent’s fees

Repairs and maintenance

Land and water rates

Loan interest (where the loan was obtained to purchase the rental property)

But you cannot deduct:

Capital depreciation

Special building write-offs

Construction costs

Loan establishment fees

Tip: If your property runs at a loss, Centrelink treats the income as zero. You also cannot offset losses from one property against income from another.

Gifting and the Age Pension: What you need to know

Gifting and the Age Pension: What you need to know

Many people like to help family members financially. While gifting can be a meaningful way to support loved ones, it can also have unintended consequences for current or future  Age Pension entitlements. Centrelink has strict rules on how much you can give away without affecting your payments, and exceeding those limits can reduce your entitlement for up to five years.

This article explains how the rules work, what the gifting ‘free areas’ are, and uses an example to show how gifts can stack up over time.

The gifting rules refresher

Centrelink applies deprivation provisions when you give away assets or income for less than market value or don’t receive any consideration in return. If how much you gift is more than the allowed free amount, the excess is treated as if you still had it. This means it continues to count for your assets test, and deeming rules apply, so that income is also assessed on the excess. The key point is that even though you no longer have the money, Centrelink will still count it as a deprived asset for five years from the date of the gift.

How much can you gift?

The free areas are the same for singles and couples:

Up to ten thousand dollars in one financial year.

A maximum of $30,000 over a rolling five-year period, with no more than $10,000 in any single year.

If you gift more than this, the excess is treated a