Understanding the hidden rules that affect your retirement income.
Deeming Rules: The Aussie Way to Calculate Your Pension
In Australia, the government uses 'deeming rules' to estimate your income from financial assets. This affects your pension eligibility and amount. Let's break it down!
What are Deeming Rules?
Deeming rules assume your financial assets earn a certain income, regardless of their actual performance. It's like the government is saying, "Hey, we know you've got some smart investments, but we'll just assume they're earning a certain rate."
How Do Deeming Rules Work?
- Eligible Assets: Bank accounts, term deposits, shares, and more.
- Deeming Rates: Two rates apply, depending on your asset value. As of Dec 2024:
- Singles: 0.25% for the first $60,400, then 2.25% for the rest.
- Couples: 0.25% for the first $100,200, then 2.25% for the rest.
- Deemed Income: The government calculates your deemed income based on these rates.
What's the Point?
Deeming rules affect your pension eligibility and amount. They help ensure everyone gets a fair go.
Tips and Tricks
- Calculate your deemed income.
- Check if you're eligible for a pension.
- Adjust your assets to optimize your pension.
- Consult a financial advisor if needed.
Remember
- Actual income doesn't matter; deemed income does.
- Some assets, like your home, are exempt.
- Deeming rates and asset limits may change, so stay updated!
For more info, visit the Services Australia website.
