Treasurer Josh Frydenberg says the federal government will change the deeming rate for pensioners by the end of 2019, and that over 25 per cent of pension recipients will be better off as a result. Shadow social services minister Linda Burney says a change in the deeming rate is urgently needed, and that cutting it by 1.25% would see pensioners $3,875 a year better off. The deeming rate has not been changed since 2015, while cutting it by 1.25% would reduce the Budget bottom line of at least $1 billion. From The AFR:
The current deeming rate means the first $51,800 of financial assets, for singles, is subject to a deeming rate of 1.75 per cent and anything over $51,800 is deemed to earn 3.25 per cent.
When the deeming rate is reduced it is equivalent to saying the pensioner is earning less on their private assets and needs more welfare to live.
