How changes to the Government Age Pension could affect you

While Age Pension payments increased on 20 September 2025, changes to deeming rates may reduce payments for some members.

7 October 2025

The Government made two important changes to the Age Pension on 20 September 2025:

• Age Pension payments increased because of indexation, which is when the Government raises payments in line with the cost of living (inflation) and wages.
• The deeming rates used to assess Age Pension eligibility also increased, which may reduce payments for some people (more on this term below).

While indexation means most people will see their payments go up, some may see a smaller increase – or even a decrease – depending on their income and assets.

At Brighter Super, we want to keep our members informed not only about superannuation, but also about other changes that may affect your retirement income.

These changes will increase Age Pension payments for many members in retirement, while the rise in deeming rates may decrease payments for some. Here’s what you need to know.

Age Pension payments going up

Every March and September, the Government reviews the Age Pension. Payments go up in line with the cost of living (inflation) and wages. This is called indexation.

From 20 September 2025:

• Single Age Pensioners, depending on their situation, will get up to $29.70 extra a fortnight, lifting their maximum fortnightly payment from $1,149.00 to $1,178.70.
• Couples (combined), depending on their situation, will get up to $44.80 extra a fortnight (that’s $22.40 each), lifting their maximum combined fortnightly payment from $1,732.20 to $1,777.00.

What this means for you

• If you receive the full Age Pension, you will get the full increase.
• If you receive a part Age Pension because your income or assets are above the prescribed limits, your fortnightly payment may go up by a smaller amount, or depending on your situation, it may even decrease (as explained below).

Deeming rates are changing

When calculating your Age Pension eligibility, the Government doesn’t check exactly how much money you earn from your savings, investments or superannuation. Instead, it assumes your money earns a set percentage of income. This is called deeming.

The amount calculated using deeming rates is known as your notional income – this is only an estimation and not what you actually receive. The more notional income the Government assumes you have, the less Age Pension you may be entitled to.

There are two deeming rates. The lower rate applies to the first portion of savings (up to $64,200 for singles and $106,200 for couples), recognising that small balances are often kept in accounts with lower returns. The higher rate applies to the rest of your savings, based on the assumption that larger balances are more likely to be invested in assets with higher potential returns.

From 20 September 2025, these rates will rise for the first time in over three years. During the COVID-19 pandemic, the Government froze deeming rates at a low level to help retirees.

• The lower deeming rate will rise from 0.25% to 0.75%.
• The higher deeming rate will rise from 2.25% to 2.75%.

For people on the full Age Pension, this change won’t reduce payments, as indexation will still increase their rate. For people with superannuation, savings or other investments, however, the higher deeming rates may reduce Age Pension payments.

For further information, visit:

• Department of Social Services media release: Changes to social security payments from 20 September 2025
• Services Australia: Deeming rules explained

How the Age Pension works with your super

When you reach Age Pension age – which is 67 years for anyone born on or after 1 January 1957 – Centrelink counts your superannuation when deciding if you can receive the Age Pension and how much. Your super is included in both the assets test and the income test.

For the assets test, your super balance is added to the value of your other assets, such as savings accounts, investments, and property (not including your family home). The more assets you have, the less Age Pension you may be entitled to.

For the income test, Centrelink doesn’t look at what your super actually earns or how much you withdraw from your account (if eligible). Instead, it applies the same deeming rates explained earlier – from 20 September 2025 that’s 0.75% on the first portion of savings and 2.75% on the rest. Even if your super delivers higher returns, or you take out more than this rate, it does not reduce your Age Pension.

If you have a partner, Centrelink looks at both of your super balances once you’ve each reached Age Pension age. Your combined super is included in both the income and assets tests, and the deeming rates are applied to the total amount. If your partner hasn’t yet reached Age Pension age, their super is not counted until they do.

If you haven’t yet reached Age Pension age, your super is not included in assets or income tests.

Understanding how super and deeming work together can help you plan your retirement income with more confidence.

We’re here to support your retirement journey

The Age Pension is designed as a safety net. It provides a basic level of income in retirement, but on its own it may not be enough for the lifestyle you want. Your superannuation can make a big difference by giving you more choice and comfort in retirement.

At Brighter Super, we’re here to help you make the most of your super balance, so it works alongside the Age Pension to support your future.

If you want to discuss how the Government’s changes might impact your retirement savings, call us on 1800 444 396. Our team of superannuation specialists and financial advisers are here to help you.