Kaye Fallick

Kaye is a retirement commentator and coach, with 25 years’ experience writing about retirement income. She has authored two books on life stage changes – Get a New Life and What Next? – and enjoys regular radio and podcast appearances. Her favourite mission is to offer plain English explanations of complex rules so that all retirees can benefit. She is based in Melbourne but enjoys escaping to Italy whenever possible.
Deeming rates frozen to 2025

Deeming rates frozen to 2025

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The biggest win for retirees in this year’s Federal Budget was the decision to freeze deeming rates until 30 June 2025. We reported on this in our Budget 2024-25 wrap, but wanted to take time to further explain this for those who are not quite sure how deeming rates work or those who have yet to encounter them in their retirement journey. This brief explainer has been prepared to bring you up to speed as quickly and easily as possible.

What are deeming rates?

Deeming rates are used to calculate the money that Centrelink assumes you earn on your financial assets. Remember, the means test for the Age Pension is based upon both an income and an assets test. If you have financial assets (this excludes the family home, car, caravans and boats etc) they will be deemed to earn income. In the real world (i.e. investment market returns) you may currently be earning 5% on money invested in a fixed term bank account. But Centrelink cannot input and manage every separate earning rate for every retiree. So it has a ‘deemed’ rate that is applied across the board to the financial assets of those seeking an Age Pension or perhaps a Commonwealth Seniors Health Card. The current deeming rate is applied to all financial assets and the resulting earnings are then added to any other income you may receive in order to calculate your eligibility.

How Age Pension will change on 1 July

How Age Pension will change on 1 July

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Regular scheduled changes to the Age Pension will occur on 1 July. There are other changes as well which will have an impact on retirees and their income over the next 12 months. Here’s our end of financial year checklist to help you plan ahead. Spoiler alert: we do not yet know the extent of all these changes – some as noted are yet to be announced. But forewarned is forearmed, so keep an eye on your inbox as we fill in the gaps in what is happening in the next financial year.

How super is taxed: Are you paying too much?

How super is taxed: Are you paying too much?

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With the approach of the end of the financial year (EOFY) there’s a lot going on. Many retirees are watching and waiting to learn of any 1 July changes to deeming rates which have been frozen since July 2022. It’s anybody’s guess what will happen next, but higher deeming rates could mean the loss of Age Pension entitlements for those who have only just qualified with little margin to move on means testing.

One aspect of the EOFY that is often overlooked is tax rates on super. That’s because there is a common misconception that most retirees simply don’t pay tax. That’s not correct; many do. And how this form of tax is paid is really interesting. Read on to learn more about the ways that you are being taxed and if there is an easier way of reducing this impost. 

Tax on super depends upon many variables. There are the two major ones – whether your fund is in accumulation (saving) or decumulation (spending) mode. But there are other factors at play, including your contributions, your investments and the way that you withdraw your savings.