If you’re eligible for income support from the Australian Government, you need to know that your super and retirement savings could affect your payments.

Centrelink and the Department of Veterans’ Affairs (DVA) use ‘deeming’ rules to work out the income from your financial investments.

The balance of your RI Allocated Pension, RI Term Allocated Pension or Transition to Retirement Pension account may be taken into consideration. This would affect the income test, which means you could see a reduction in your income support payments.

Here’s your guide to deeming rules and how they could affect you.

Deeming: what your assets are ‘deemed’ to earn

Services Australia explains that deeming assumes your financial investments earn a certain amount of income, regardless of how much income they actually earn.

They list the main types of financial investments which could be assessed under deeming:

• Savings accounts and term deposits
• Managed investments, loans and debentures (which are fixed interest investments that pay interest)
• Listed shares and securities
• Some income streams (such as our RI Allocated Pension, RI Term Allocated Pension and Transition to Retirement Pension)

Any deemed income is added to your other income, which is then assessed under the income test. This test is used with the assets test to work out what support you may be entitled to. You can earn up to certain limits without reducing your payments.

Deeming might apply to your retirement or super account

Centrelink and the DVA changed the way they assess income from retirement account-based income streams from 1 January 2015.

This means:

• If you opened your RI Allocated Pension, RI Term Allocated Pension or Transition to Retirement Pension before 1 January 2015

  On 31 December 2014, if you had an RI Allocated Pension, RI Term Allocated Pension or Transition to Retirement Pension and you were receiving income support, the deeming rules don’t apply. Your account will continue to be assessed under the previous income test.

  However, if you had one of these accounts but you stopped receiving income support on or after 1 January 2015, your account will be subject to deeming rules.

• If you open a new RI Allocated Pension or Transition to Retirement Pension on or after 1 January 2015

  Your RI Allocated Pension or Transition to Retirement Pension account will be subject to deeming rules.

If you also have an accumulation super account, such as our GESB Super or West State Super, this also might affect the income or assets test. For more information, please visit the Services Australia or DVA website.

Check which deeming rates might apply to you

For the latest rates, please see the Services Australia website.

The deeming rates and thresholds change

The deeming rates are set by the Minister for Social Services. According to the Services Australia, these change from time to time to reflect returns on financial investments. The thresholds, or values, at which the higher deeming rate begins to apply are indexed in line with the Consumer Price Index (CPI) in July each year.

Find out more

For more information on deeming and how it could affect your payments, please visit the Services Australia website. If you need more help, you can also call Centrelink’s Financial Information Service on 13 23 00 between 8am and 5pm AEST, Monday to Friday. They can arrange an interview for you to discuss you options free of charge.

If you are preparing for retirement, we offer a range of tools and resources to help you, including our Retirement planning calculator and retirement planning seminars and webinars.