Another income boost for age pensioners

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Deeming rates have been cut for the second time in less than 12 months as the federal government moves to further stimulate a sorry economy savaged by the coronavirus.

Along with a $750 one-off payment to pensioners and those on JobSeeker and Carer’s Allowances, deeming rates have been reduced after the latest rounds of Reserve Bank cuts to official interest rates.

The lower deeming rate has been reduced from 1.75 per cent to one per cent for financial investments up to $51,800 for single pensioners and $86,200 for pensioner couples, and the upper deeming rate has been reduced from 3.25 per cent to three per cent for balances over those amounts.

Official interest rates now sit at 0.5 per cent and the best bank deposit rates on offer are 2.25 per cent.

Treasurer Josh Frydenberg announced the cuts yesterday as part of a package that will cost the government $17.6 billion.

“In addition to the stimulus package, the government is lowering the deeming rates at a cost of $600 million, to reflect the recent changes in interest rates,” Mr Frydenberg said.

“Both the lower and the higher deeming rates will be reduced by half a percentage point, benefitting around 900,000 Australians, including 560,000 aged pensioners.”

The stimulus package was announced as the World Health Organisation declared the coronavirus a global pandemic.

“These are challenging times, but the Australian people and the Australian economy are up to this challenge,” Mr Frydenberg said.

“Our economy has continued to grow and our economy remains resilient.

“The genesis of this economic shock was outside of our control but our response is not, and our disciplined and careful budget and economic management over the last six years has put us in a position that we now have the fiscal flexibility, we now have the financial firepower to respond to this shock.”

In other news affecting Centrelink customers, income streams including Newstart, Sickness, Wife Pension and Bereavement Allowances will be axed next week, with the majority of those welfare recipients to be transferred onto JobSeeker payments.

The JobSeeker payment will be the main income support from 20 March for eligible Australians who are at least 22 years of age but under Age Pension age.

A spokesperson for Services Australia – formerly known as the Department of Human Services – said the changes were “part of the government’s commitment to making Australia’s welfare system simpler and fairer”.

The JobSeeker payment and the Widow, Partner and Sickness Allowances will increase marginally from 20 March, from $604.70 per fortnight for singles aged 60 or over (after nine months) to $612 per fortnight, and from $504.70 per fortnight to $510.80 per fortnight for each member of a couple.

The JobSeeker payment, previously known as Newstart, has been the subject of fierce criticism over in recent years and labelled totally inadequate as a means of support for anyone seeking work.

Services Australia says that about 7834 Wife Pension recipients were expected to be affected by the changes, half of whom would transfer to JobSeeker payments, while the remainder would move to other payments, including the Age Pension and Carer’s Allowance.

“Wife pensioners who transfer to JobSeeker payment will not have mutual obligations until after they attend a transition interview with Services Australia, where it will be determined whether an exemption is appropriate,” a department spokesperson said.

Sickness and Bereavement Allowance recipients will not be able to make new claims after 20 March.

All those on the payments will continue receiving funding until their exemption or bereavement period expires, the spokesperson said.

“Where a person’s partner dies on or after 20 March 2020, they will be able to claim bereavement support through the new JobSeeker payment or Youth Allowance, depending on their age,” she said.

“Bereaved partners will be exempt from waiting periods and mutual obligation requirements for the period of bereavement. Bereaved partners will receive an upfront lump sum payment in addition to their first fortnight’s entitlement based on their circumstances.

“Services Australia has written directly to all affected recipients advising of the upcoming changes and has information available on its website and telephone lines.”

Australian Council of Social Services CEO Cassandra Goldie told InDaily she wanted to ensure those who needed income support understood that they could still access payments.

“A key concern is that people won’t know that there is an allowance for bereavement or an allowance for illness once the payment becomes known as the ‘JobSeeker payment’,” she said.

“We urge the government to ensure that there is clear, easy-to-access information out there for people who need these payments.

“We also urge the government to review take-up of these payments over time to detect if there has been a decline in claims, and quickly address any decline.”

Are you relieved that deeming rates have been cut but concerned that the 20 March changes will make allowances difficult to access?

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Written by Janelle Ward

75 Comments

Total Comments: 75
  1. 0
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    Who the hell has spare money for deeming rates….. increase the damn pension so you can live modestly instead of scrounging all the time.

    Another Scotty from Marketing furphy to the oldest

    • 0
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      Grow up Panos. Juvenile regurgitation of Labor epithets is puerile and futile.

    • 0
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      panos is right, this LNP bunch in government are a bunch of scrooges, during GFC they objected to Rudd’s $900 cash handouts claiming they could do it better in other different ways…BUT they they didn’t object in 2012 to parliamentary wage increase of $45,000 in one year for themselves…shameless bastards…
      It will be interesting how they will manage this economic crisis in Australia due to the global Coronavirus. So far they are doing what Labor would’ve done more generously.

    • 0
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      Agree Panos…..many of us don’t have more than the lowest $base deeming rate & if don’t, we should get a higher OAP than those who have imho, unless own $3M+ home when Bendigo Bank’s Homesafe plan can easily give ’em more than enough spending money + still leave a couple of $M to their kids. Okeydokey – do your worse, vilify me all u like, I don’t give a damn.

  2. 0
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    At least it is something. So much more to do to fix the economy. But with global health turmoil, it is unlikely to happen.

  3. 0
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    Typical Government. They think a change of names solve everything. Talk about simple; don’t you think old age pension, widows pension and unemployment benefits was simple enough?

  4. 0
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    Amazing! Holders of Oldies Cards that do not get the pension becuse the mongrels moved the goalposts, actually might get a handout. I have yet to see the money – waiting….
    A new benefit name, but they failed to name it the Poverty Payment. A person could not live on it alone.
    Deeming? 3%? I wonder how my super will perform this year. Actually the drop did not affect me too much, as I am not trading shares day to day, or even month to month. It will all go back up again. Hopefully, most of us on super live on dividends not on trading gains.

    I am not at all frightened by this Coronavirus. The virus is just as bad as the usual flu, and is similar to another C-virus we call the common cold. You get a cold for a day or so, then get over it. If you are in a weakened state, then take the normal precautions you would to avoid the flu. If you caught the flu, the risk is similar. Am I deluded, or is this something of a beat-up and a panic?

    • 0
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      That fine Janus BUT if you are not well and HAVE to attend hospitals and such it is not a thing you are keen to do and this government have no leadership — and it is well over time that they stopped all unnecessary crowded places and stopped them till this virus has died out
      All these politicians disgust me they are getting paid so so much for WHAT!? NOTHING but lining their and their friend’s pockets

    • 0
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      Janus the big difference is there is no vaccine. You might be fine but could easily spread it to others who may die.

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      If just 3% of Australians (population 24million) caught Coronavirus and 1.5% of those affected died that would be 10,800 deaths and not acceptable to many. More catch it, then it’s catastrophic!

    • 0
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      Viruses are DNA strands and very difficult to build a vaccine against. there is a theory extant that adapting to viruses such as this via bodily defense mechanism actually contributes to genetic adaptation. Anyway – take normal precautions – not much else you can do unless you stay at home forever.

    • 0
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      Sundays- The population of Australia in 2020 is around 26 million. Depending on how many catch the coronavirus the global average trend of deaths is around 3.4% of total infected. So far the death rate in Australia is averaging at 2.38% of those infected. Don’t measure against the population, measure the death rate against those infected.

    • 0
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      Arvo thanks for the.update. 3.4 % of those infected would be extremely high if the virus was left unchecked. NSW chief medical officer estimates 1.5 million people in nsw alone will be infected. If 3.4% of those resulted in deaths it would be catastrophic

    • 0
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      Corona virus may lead to viral pneumonia. Related bacterial infections can be treated with antibiotics. The reason you are unlikely to die from seasonal flu is that you are vaccinated which assists your immune system to fight the flu. There’s no vaccine for Covid19 so you could succumb to viral pneumonia. I’m at risk due to age and a lung condition. Stay safe everyone.

    • 0
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      Thanks for all of those responses.

      i just recall that every year, normal flu (whatever that is) takes over 650,000 people – every year! – so we all should do this same thing? – every year? We all get the flu injections, but this is only good for last year’s flu, not the current one.

      Yes it is tragic, and dangerous for many of us oldies. if you read the stats by WHO and other various authorities, the ACTUAL death rate will be similar to “normal” flu, after this all blows over.

      So, call me a fool, but I am not stocking up on toilet paper, any more than I normally would. I do have an advantage that I live in a remote and forgotten part of the world some call Tasmania. City folk – be on your guard.

      Best of luck.

    • 0
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      This is NOT THE FLU!
      THIS DISEASE CAUSES PNEUMATIC WITH ACCOMPANYING FIBROSIS AND SEVERE DIFFICULTIES WITH BREATHING, VERY PAINFUL COUGHING AND PAINFUL THROAT AND AIRWAYS AND MUCH FATIGUE!
      I have had pneumonia twice and well familiar with its experience so have been vaccinated for pneumonia but does not cover all types but lasts for 5 years.
      Asthmatics have much difficulty with breathing and require oxygen during hospitalization. Those with weak hearts also require hospitalization as with diabetes and especially the elderly and immunology compromised.

  5. 0
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    I don’t Know you people get free handouts every week from the Government because you can’t pay your own way and you still whine this is why normal people keep away from you.

  6. 0
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    Widow payment will increase “for each member of a couple ” —!!??

  7. 0
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    Deeming rate cuts are something but not nearly enough. The first $50,000 should not be included in deeming. That would be a big help and a realistic help to most pensioners. After that, the way the interest rates presley are, it should be no more than one to one and a half percent. A lot of people, desperate to make ends meet feel forced to take what little money they have and invest it in shares, due to the very low interest rates and the ridiculous deeming rate. How has that worked out lately !!! Thanks to the Coronavirus and other world wide events, they have virtually lost everything, in the last couple of weeks. Thank you Australian Government. Whether it be Liberal or Labour no difference. Aways seemingly looking after those who can work (and a large number of those choose not to) and leaving the elderly and vulnerable out to dry. Now they’re throwing billions and billions of dollars at the problem, a very small portion of which goes to lowering deeming rates. And they call themselves economists, where did they get their degrees ???, A lucky dip in a Kellogg’s Corn Fakes packet perhaps. Cheers Jacka.

    • 0
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      You are correct in many ways there. short term throwing of money is a stop-gap – but the failures (if you want to use that word) are in the current system.

    • 0
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      If you do not want the first $50k included in deeming keep the stuff in one of those old fashioned Arnotts bisquit tins, keep the wheevils away from the notes and you’ll be sweet.

    • 0
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      deeming rate should match the cash rate, anything above is highway robbery

  8. 0
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    This mob also give with one hand and take more away with the other

    • 0
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      Note the name change to Australian Services, taking out the ‘Human’ component completely

    • 0
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      Services is more adaptable to suit conditions/circumstances – they can arrange trains to the showers at the gulags, for instance – a much more encompassing title without ‘Human’ in it… more inclusive so to speak.

      Sort of an indication that the government seeks to use a Dr Mengele type of clinical approach.. hmmm..

    • 0
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      mentioning Mengele and saying hmmm – maybe the good doctor Joseph would just maybe have the development of a Corona vaccine in hand. He was evil but capable!!

    • 0
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      And the other mob just takes and takes and calls it something else and then buys everything on the never never plan

  9. 0
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    Even above says best bank interest rate is only 2.25%. I help and assist my elderly aunt with her financial matters. Merely for an example –
    Using the amount of $350,000 merely as an example –

    Under previous deeming rate, if you had $350,000, Centrelink would deem interest amount of $10598.
    Under new deeming rates – amount would be $9464.
    Wow! – so huge gain of $1134.

    If you can find a bank offering 2.25% – you would get $7875 – a loss of $1589 from the new deeming rate.

    My aunt’s bank (she is very old school, sticks with bank she has always been with) – the best she can get is 1.25%. So on $350,000 – Interest would be $4375.
    So would be $5,089 WORSE OFF than the new deeming rate. That’s nearly $100 a week.

    Deeming rate is too high.

    • 0
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      Yes – my mate just got 1.40% on a $100’000 investment for 12 months in a minor state bank, so deeming should be maximum 1.5%.

    • 0
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      Yes at rates of 1.75% and 3.25% the annual deeming on $350k is 10598.

      At rates of 1% and 3% it is 9464, as you stated.

      From May1 the rates will be 0.5% and 2.5% resulting in a deeming rate of $7714.

      So, the first saving is $1134 plus the 2nd saving (9464-7714) is 1750, giving a total of $2884.

      So, you would need 2.2% from the bank to match the 7714.

      Still almost impossible though.

    • 0
      0

      Yes at rates of 1.75% and 3.25% the annual deeming on $350k is 10598.

      At rates of 1% and 3% it is 9464, as you stated.

      From May1 the rates will be 0.5% and 2.5% resulting in a deeming rate of $7714.

      So, the first saving is $1134 plus the 2nd saving (9464-7714) is 1750, giving a total of $2884.

      So, you would need 2.2% from the bank to match the 7714.

      Still almost impossible though.

  10. 0
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    What about self-funded retirees with low income cards but no Commonwealth Card? I am 65 but won’t be eligible for the age pension for another couple of years as my savings are above the eligibility rate. My pension fund has taken a 20% nosedive since the markets have been affected by this damn coronavirus panic. I rent in the private sector and do not claim any benefits and am living on my draw down pension fund, yet penalised for renting but those retirees with million dollar homes can get a full/part pension and as Commonwealth Card Holders a $750 cash handout too. Quite frankly, It stinks.

    • 0
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      You aren’t eligible for the Age Pension at 65 anyway. It’s 66 at the moment and rising to 67. When you reach pension age, you can review your situation and may indeed qualify for a part pension.

    • 0
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      I am aware of that….my comment was a generalisation for all other self funded retirees on a low income but not eligible for the CC and age pension. We all just fall through the cracks. As an aside we (husband and self) are not eligible for the age pension until we are 68 because we have not had 10 qualifying years, despite living in Australia and paying full tax (4 years on a 457 visa) before we got PR and citizenship. In effect the first 4 years don’t count. We have lived here and paid full tax for 12 years but have to wait another two years before becoming eligible for any part pension. Husband had to retire early (self funded, no benefits) due to cancer.

    • 0
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      Yorkie, I’m sorry for your husband’s illness. From personal experience I understand the terrible toll it has. However, your expectations of what Australia should provide you are too high. We don’t have a universal pension and people either qualify or they don’t. The pensioners living in million dollar homes may have bought them cheap many years ago. On the Pension, many are struggling to get by and are fully deserving of $750 cash in my opinion. They are doing it tough and do not have the same access to cash and other investments you do.

    • 0
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      I do not have any expectations of what AUSTRALIA should provide other than to be treated fairly and equally to everyone else, but as I see it the eligibility criteria for the age pension discriminates against renters. Our cash/assets are probably way below people who own million dollar homes, in other words their actual wealth is in their home values. We have saved for a comfortable retirement but when it comes to claiming the age pension will be penalised for not having bought a home. Others like ourselves have saved but are discriminated against because we are deemed to be cash rich, which is not entirely the case when you take into account the pension fund has to cover rent and other expenses for the rest of our lives. We do not own a home and are not millionaires, but many people who own million dollar homes are (on paper)….and it is that algorithm which is unfair in my opinion. The only difference to having cash or investments versus having your money in a home is accessibility. Two couples could have the same amount of cash in the bank/pension fund but a homeowner is wealthier because of the value of their home. One couple could get the pension (despite the value of their home) and the other doesn’t because they rent and that doesn’t seem fair or equitable to me.

    • 0
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      You cant make a fair comparison by looking at the end result. Most people paid interest to buy a home often struggling when rates rose dramatically. Also there were no tax deductions. Plus there are ongoing costs of running a home not applicable to renters. A persons home cannot easily be converted cash. Renters are allowed to have more assets than home owners to adjust for these factors. I believe the family home should.continue to be exempt.from the asset test. When considering a pension it helps to work within existing rules

    • 0
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      Yorkie – this is the way things are here in Australia, you do not have the qualifying years and for some reason you want to have the cash not a home. So live with it. Been here 50 years this year and I am still being deemed. Do not like that but that is the way here. Should probably buy a more expensive house and get the full pension. Our place is valued at $400’000 and you carry on about million dollar houses. If you cannot handle our system please go back where the system is more to your liking, you seem to have been out of Australia more than in at any rate.

    • 0
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      Oh well thanks for that Mariner. That’s a typical Aussie response and hostile to one who has contributed a great deal to this country since we emigrated and integrated fully almost 13 years ago. We worked hard, played by the rules and paid our full taxes but in your eyes we will always be classed as immigrants. My original comment was about the $750 being handed out to those who are in receipt of a Commonwealth Card and the unfairness of not affording the same privilege to those holding Low Income Cards, despite plenty of CC holders living in million dollar homes. People like you and ‘Sunday’s’ have immediately jumped on the fact we are immigrants and as such should ‘suck it up’. Fair do’s, but we are not bludgers like some who have come to this country who cause trouble and live on benefits AND we share the same values as most hard working Aussies, but my argument is that not everyone here is equal. You have made that very clear, but you and ‘Sunday’s’ are missing my point entirely. I am sure the lower paid (on low/minimum wage) are stoked to be having their taxes used to give to millionaire homeowners a cash bonus of $750 so that they can chuck another lobster on their gold plated barbie. Yeah right cobber…and ‘Go back to where you came from is so lame’…mate!

    • 0
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      You do not have the qualifying number of years here, because you were obviously living and working elsewhere for the larger part of your working life. If you are from the UK you would be qualified for their pension, and if you worked for 10 years or more you get a full pension – don’t know about other countries, but I imagine some pay pensions overseas. So when you do qualify for the Australian benefits, you could be getting paid by 2 countries.

    • 0
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      Tango18…if you read my previous comments you will see that I am well aware of the 10 year eligibility rules…we have lived and worked here for 13 years. Any pension sourced from overseas is assessed and classed as income and taken away from any Aussie pension you may be entitled to claim. I also stated that we are self funded retirees and we do NOT get any State benefits. My original point was about the $750 bonus being paid to people who hold Commonwealth Seniors Health Card who own million dollar homes, yet those who only have Low Income Health Cards will not be afforded the same privilege. In my opinion million dollar home owners shouldn’t be getting extra handouts from the Government when people in receipt of Low Income Health Cards are exempt. The clue is in ‘Low Income’.

    • 0
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      Most Low Income Health card holders are also in receipt of Centrelink benefits including Family Tax Benefit and will qualify for the $750. I also know it is not Asset tested, so those not on Centrelink may be living in expensive homes, or like you have Super. My sympathy is for full pensioners and those struggling on Newstart. My parents were migrants and their attitude so far from yours!

    • 0
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      Hey ‘ Sunday’s’ don’t try and diss me….I am for the downtrodden. That’s my point and that’s the trouble with making comments on an open forum when people don’t read properly and misconstrue what’s been stated. Its people like you that get passive aggressive and twist everything coming back on every point. You don’t know me, so please, stop harassing me. You’ve made your point and there is no need to be insulting.

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