{"menuItems":[{"label":"How does deeming work?","anchorName":"#how-does-deeming-work"},{"label":"What is a deeming account?","anchorName":"#what-is-a-deeming-account"},{"label":"What are the types of deeming accounts?","anchorName":"#what-are-the-types-of-deeming-accounts"},{"label":"Information you might find helpful","anchorName":"#information-you-might-find-helpful"},{"label":"Who is eligible for a deeming account?","anchorName":"#who-is-eligible-for-a-deeming-account"},{"label":"How to apply for a deeming account","anchorName":"#how-to-apply-for-a-deeming-account"}]}
How does deeming work?
Deeming is a key part of the pension system. Deeming is used to work out an assumed income created from your financial assets. The main type of financial assets are:
Savings accounts and term deposits
Managed investments, loans and debentures
Listed shares and securities
Some income streams
Some gifts you make
Services Australia will include any deemed income in calculating pension payments. Deeming rules are in place to give retirees an incentive to invest savings to generate more retirement income.
What is a deeming account?
Deeming accounts are bank accounts for over 55s and pensioners. They should return interest in line with the government's set deeming rates, and this income is what is used to calculate pension payments.
The deeming rate is the expected rate of return from different financial investments based on the amount invested. If the financial investment pays more than the deeming rate, the extra income is not assessed by the government and pension payments stay the same. Deeming rules are in place to give retirees an incentive to invest savings to generate more retirement income.
Deeming rates change every couple of years. They are much lower now than in the past, reflecting the record low interest rates. A lower deeming rate means more money for pensioners.
What are the deeming rates?
There are 2 deeming rates. They depend on your specific circumstances.
For financial investments up to $53,600 in value for singles; up to $89,000 combined for couples with at least 1 pension; and up to $44,500 in value per person for couples with no pension.
0.25%
For financial investments above $53,600 in value for singles; above $89,000 combined for couples with at least 1 pension; and above $44,500 in value per person for couples with no pension.
Monthly fees. Deeming bank accounts are made for retirees. They’re mostly fee free. Some accounts give a number of free transactions such as ATM withdrawals every month. Other accounts waive transaction fees altogether. Fees may apply for telephone banking transactions, transactions at a branch and overseas transactions.
Interest rate. These accounts can have a tiered interest rate loosely linked to the government deeming rate.
Account access. Funds are available at call. You can withdraw money from this account in person or electronically whenever you wish.
Commissions or fees. Compare the commission and fee structures of different trading platforms. Some brokers can charge a little extra for specific trades.
Trading options. What options are on offer for different types of trade, for example placing and timeframe rules.
Tools and support. Educational resources and 24-hour customer service are key features.
Account fees vary according to the account type. Pensioner savings accounts and term deposits are generally fee free whereas share trading accounts can attract a commission.
This depends on the financial investment. You can expect savings accounts and term deposits to return around the lower deeming threshold. Term deposits for retirees can return an above deeming rate for some investment terms. Share trading can return well above the upper deeming threshold.
APRA has published a list of authorised deposit-taking institutions offering retirement savings accounts.
An income stream from a superannuation fund in the pension phase. You can apply for an income stream after you've retired to access your super money.
A payment from the Department of Social Services, for example the aged pension. This is not the same as your superannuation pension, which is your own money.
The aged pension is means tested. The government looks at your income and your assets to determine if you qualify for the aged pension or not.
You can apply for a deeming account if you're over 55 and you're claiming a government pension. These accounts are investment products, there is no credit check. As well as meeting pension or age eligibility requirements, you’re also asked to provide identification such as your driver's licence and Medicare card.
Check the product's terms for a full list of application requirements before you open an account.
Be over the age of 55
Receive a government pension: age, disability, service or carers pension
Have an Australian residential address
What documentation or paperwork will I need before applying?
You can research, compare and apply for different deeming accounts online. As a new customer you can verify your identity online in most cases too. You may be asked to fax or email a copy of your ID and in some cases you may need to visit a branch to verify your identity with the account provider.
Current state or territory driver's licence or proof of age card
Medicare card
Tax file number
SMSF details if applicable
How to apply for a deeming account
Follow the links on this page to apply for one of the accounts in our comparison tables. You’ll be redirected to the account provider’s website where you’ll able to complete a secure online application in 10 minutes.
Once you’ve submitted your application for a deeming account, you’ll be contacted by the account provider on the email you provided about the next steps. You may need to provide further identification. Once your identity has been verified you’re free to make a deposit into the investment account.
Rebecca Pike is Finder's senior writer for money. She joined Finder after almost four years writing for business publications in the mortgage and finance industry, including three years as editor of Mortgage Professional Australia. She regularly appears as a money expert on programs like Sunrise and Today, as well as across radio and newspapers. She also holds an ASIC-recognised Tier 1 Generic Knowledge certification.
If business banking fees are having a negative impact on your business’s bottom line, we have everything you need to know to avoid those unnecessary costs.
The deeming account is only available to people who are over 55 and are claiming a government pension. I’m afraid that having a concession card will not qualify you to open such an account. Nevertheless, you may consider seeing other bank accounts to compare your options. On the page, is a comparison table you can use to see which account suits you. When you are ready, you may then click on the “Go to Site” button to be redirected to the bank’s website where you can proceed with your application or get in touch with their representatives for further assistance.
When you file your income tax return at the end of each financial year, you need to declare all your sources of income including the interest earned on your savings account.
Thanks for your question. The asset value thresholds which are used to determine deeming rates, are adjusted annually on the 1st of July. Note however that the actual deeming rate may change periodically.
I am on age pension.I do share trading with some gains and losses.
1. am I required to report this to centrelink
2. how is this to be reported and when
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Important information about this website
finder.com.au is one of Australia's leading comparison websites. We are committed to our readers and stands by our editorial principles
We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labeling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
We make money by featuring products on our site. Compensation received from the providers featured on our site can influence which products we write about as well as where and how products appear on our page, but the order or placement of these products does not influence our assessment or opinions of them, nor is it an endorsement or recommendation for them.
Products marked as 'Top Pick', 'Promoted' or 'Advertisement' are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product. You can learn more about how we make money.
When products are grouped in a table or list, the order in which they are initially sorted may be influenced by a range of factors including price, fees and discounts; commercial partnerships; product features; and brand popularity. We provide tools so you can sort and filter these lists to highlight features that matter to you.
Please note that the information published on our site should not be construed as personal advice and does not consider your personal needs and circumstances. While our site will provide you with factual information and general advice to help you make better decisions, it isn't a substitute for professional advice. You should consider whether the products or services featured on our site are appropriate for your needs. If you're unsure about anything, seek professional advice before you apply for any product or commit to any plan and read any disclosure documents (such as any Target Market Determination (TMD) and/or Product Disclosure Statement (PDS)) issued by the provider before making a decision.
Providing or obtaining an estimated insurance quote through us does not guarantee you can get the insurance. Acceptance by insurance companies is based on things like occupation, health and lifestyle. By providing you with the ability to apply for a credit card or loan, we are not guaranteeing that your application will be approved. Your application for credit products is subject to the Provider's terms and conditions as well as their application and lending criteria.
Please read our website terms of use and privacy policy for more information about our services and our approach to privacy.
Can I open a deeming account as I don’t receive a pension but have a concession card
Hi,
Thanks for your inquiry.
The deeming account is only available to people who are over 55 and are claiming a government pension. I’m afraid that having a concession card will not qualify you to open such an account. Nevertheless, you may consider seeing other bank accounts to compare your options. On the page, is a comparison table you can use to see which account suits you. When you are ready, you may then click on the “Go to Site” button to be redirected to the bank’s website where you can proceed with your application or get in touch with their representatives for further assistance.
Hope this helps.
Cheers,
May
If i have a pensioner savings account does the ATO take a percentage of the interest that i earn yearly, if so why.
Hi Lynn,
Thanks for your question.
When you file your income tax return at the end of each financial year, you need to declare all your sources of income including the interest earned on your savings account.
Cheers,
Anndy
When will the deeming rates used by Centrelink for 2016 be reassessed?
Hi Wendy,
Thanks for your question. The asset value thresholds which are used to determine deeming rates, are adjusted annually on the 1st of July. Note however that the actual deeming rate may change periodically.
I hope this helps.
Clarizza
I am on age pension.I do share trading with some gains and losses.
1. am I required to report this to centrelink
2. how is this to be reported and when
Hi Ken,
Thanks for your question.
You are required to report to Centrelink if you receive income from those shares. This could include dividends.
You may refer to Services Australia’s employment income reporting for information on how and when to report your income. I’d recommend that you contact Centrelink directly to confirm if you need to report dividends.
Cheers,
Shirley