COTA Australia welcomes today’s Age Pension indexation increase and notes the Government’s decision to stage increases to deeming rates – a move which, while not without concern, will give older Australians greater certainty to plan and budget.
COTA Australia Chief Executive Officer Patricia Sparrow said September’s increase of $29.70 a fortnight for a single Age Pensioner will help pensioners keep up with rising household costs.
“The idea that all older Australians are wealthy is a myth. In reality, over one in four live in poverty. For those struggling with skyrocketing costs, an extra $29.70 a fortnight will bring real relief,” said Ms Sparrow. This is one of the largest increases to the aged pension over recent years. However, Ms Sparrow said the changes to deeming rates – after years of the rates being frozen to support people through the COVID pandemic and recovery – will no doubt come as a shock to some older Australians.
“Any decrease in fixed incomes is difficult for people to manage,” Ms Sparrow said. “However, staging the changes and coupling the introduction of the change with one of the largest pension increases in the past 60 years should offset the impact for many pensioners.
“Older people have told us that they want visibility of the government’s intentions to give them the opportunity to forecast and plan ahead. The staged approach to the deeming changes and the announcement ahead of its impact shows that the Minister has been listening.
“The Government has stated that the changes to the deeming rate will reflect rates of return that pensioners and other payment recipients can reasonably access on their investments.
“We’ll now be watching closely to make sure the Government’s statement – that deeming reflects what people can actually earn – is delivered in practice, not just in theory.”
Ms Sparrow said that COTA will also be watching closely to ensure the government’s methodology for setting future deeming rates works for all older Australians – including those who are not digitally connected to online savings accounts.
“The Government says deeming will gradually return to levels pensioners can reasonably access, with independent advice from the Australian Government Actuary. That’s welcome, but it’s crucial the methodology is designed to work for everyone. Deeming rates must reflect what people can actually get from their bank, not just headline online rates, and we look forward to engaging with the Actuary to ensure real over the counter banking products are properly represented.”
Ms Sparrow said COTA is reminding pensioners that many banks already offer “deeming accounts” which guarantee returns that match the Government’s deeming rates – and that in some cases, better returns may be available elsewhere.
“Pensioners shouldn’t assume their bank is giving them the best deal. Many banks do offer special ‘deeming accounts’ that match the Government’s deeming rate, but in some cases you can find products that deliver even higher returns.
“We’re urging people to call their bank today, check what they’re earning, and make sure their savings are working as hard as they can.”
Changes from 20 September 2025
Deeming:
• The threshold will rise to $64,200 (single) and $106,200 (couple combined).
• The deeming rate will increase 0.5% from today’s levels to 0.75% below the threshold and 2.75% above the threshold from 20 September 2025.
Pension:
• The maximum rate of age pension increases on 20 September 2025 with indexation by $29.70/ fortnight for a single and $22.40 a fortnight for a couple (each) on the full pension.
• Pension Disqualifying Income levels: various (single resident: $59.40/ft)
• Pension Disqualifying Asset levels: various ($10k – $20k increase)
Commonwealth Seniors Health Card:
• From 20 September 2025, singles with taxable income below $101,105 and couples with combined income below $161,768 may be eligible for a Commonwealth Seniors Health Card (CSHC).
COTA’s advice to older Australians – call your bank today
• Don’t let your bank short-change you – call today and check your rate.
• Ask whether your everyday or savings account pays you at least the government deemed rate of interest.
• If it doesn’t, ask your bank if they have an account that does pay at least that amount or if there’s better rate they can offer you.
• Consider moving funds to products that meet or exceed the deemed rate if suitable for your circumstances.
Media contact: Alana Mew, 0419 929 722, [email protected]