Some good news on the Centrelink front at last. We have watched as the interest rates drop but Centrelink deeming rates stayed static. With Term Deposits now paying less than 4% the deeming rate seemed out of touch and the Minister for Social Services has announced a reduction to the deeming rates reflecting those lower returns available to income support recipients from financial investments. 
From 4 November 2013 the deeming rates will be:
| Deeming rate | Single | Couple |
|---|---|---|
| 2% | First $46,600 | First $77,400 |
| 3.5% | Above $46,600 | Above $77,400 |
So deeming rates are now set to reflect returns on cash investments available to pensioners and other income support recipients. It recognises that many pensioners and social security recipients who also rely on own-source income have been adversely affected by the global economic downturn.
Means tested part rate income support recipients paid under the income test, with financial investments mainly in high interest savings accounts, term deposits, shares, bonds and managed investments, may receive an increase in their pension payments, to reflect the reduction in their assessable income. However after a solid year in the share and property markets do not be surprised if the effect is cancelled out or you actually receive a little less once Centrelink updates its values for your portfolio.
This change applies to both Centrelink and Department of Veterans’ Affairs means tested recipients.
For those managing money for relatives in Aged Care you may find the income-tested fees may have lower costs as a result of the new lower deeming rates.
As always if you have any comments please add them below or if you wish to discuss your position and strategies for Centrelink and/or Aged Care costs then please contact us for an appointment at our Castle Hill or Windsor office or call me direct on my mobile 0413 936 299.
Liam Shorte B.Bus SSA™ AFP
Financial Planner & SMSF Specialist Advisor™
Tel: 02 98941844, Mobile: 0413 936 299
PO Box 6002 BHBC, Baulkham Hills NSW 2153
5/15 Terminus St. Castle Hill NSW 2154
Corporate Authorised Representative of Viridian Select Pty Ltd ABN 41 621 447 345, AFSL 51572
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