Another rate cut, another pay cut for pensioners

Deeming rates are used to calculate the earnings on a range of investments by pensioners.

The more you are deemed to have earned the less pension you get and this is applied to a range of pensions and benefits including the Age Pension, which affects hundreds of thousands of Australians.

Australia’s peak consumer group for older Australians says falling interest rates on term deposits coupled with high deeming rates are hitting the country’s most vulnerable people.

National Seniors Chief Advocate, Ian Henschke says when it comes to the government’s deeming rates “enough is enough”.

“We’re calling for immediate action to lower deeming rates,” Mr Henschke said.

“The top rate needs to be lower by at least 1.5% and the lower by 0.5%.”

As the cash rate has dropped, the higher deeming rate of 3% on savings over $51,800 is now double the typical return on a term deposit.

Mr Henschke says this is costing pensioners but boosting the government’s budget.

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