Politics

Coalition pledges to freeze deeming rate to buffer pensioners from interest shock


Opposition treasury spokesman Jim Chalmers savaged the Prime Minister, saying his economic credibility was “completely shredded.“

“This interest rate decision today will have a big impact on the household budgets of millions of Australians,” Chalmers said in Canberra.

According to the government, the freeze will benefit about 450,000 age pensioners, and 440,000 other pension recipients, with the deeming rate for financial investments up to $53,600 for single pensioners, and $89,000 for pensioner couples, to be kept at 0.25 per cent.

The upper rate, which applies to singles and couples over those income thresholds, will stay at 2.25 per cent.

The government has reduced the deeming rate on multiple occasions since 2019.

The pitch for the grey vote follows a growing election stoush over aged care, with Labor being attacked by the Coalition over a pledge to guarantee care from qualified nurses in aged care homes 24 hours a day, after the latter questioned how the party would deliver on the promise.

The Coalition is promising to freeze the deeming rate

[ffx_callout title=”What%20is%20deeming%3F” body=”%3Cul%3E%3Cli%3EDeeming%20is%20a%20set%20of%20rules%20used%20to%20work%20out%20the%20income%20created%20from%20financial%20assets.%3C%2Fli%3E%3Cli%3EIt%20assumes%20these%20assets%20earn%20a%20set%20rate%20of%20income%2C%20no%20matter%20what%20they%20really%20earn.%3C%2Fli%3E%3Cli%3EThe%20main%20types%20of%20financial%20assets%20include%20savings%20accounts%20and%20term%20deposits%2C%20managed%20investments%20and%20listed%20shares.%3C%2Fli%3E%3Cli%3EDeemed%20income%20is%20then%20included%20in%20the%20income%20test%20when%20people%20apply%20for%20a%20pension.%3C%2Fli%3E%3Cli%3EThe%20income%20test%20is%20used%20to%20work%20out%20how%20much%20the%20government%20will%20pay.%3C%2Fli%3E%3C%2Ful%3E” /]



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