The Morrison Government has guaranteed the level of income payments for 900,000 Australians following the increase by the RBA to the cash rate.
A re-elected Morrison Government will guarantee the rate used to determine the income earned from financial assets will be frozen at today’s record low level for the next two years to ensure payments are not reduced as earnings increase from deposit accounts held by social security recipients.
The Prime Minister said about 450,000 Age Pensioners and 440,000 other payment recipients would benefit from greater certainty around their fortnightly social security payments because of the Government’s deeming rate freeze.
“This is another shield to help protect Australians from the cost of living pressures people could feel from an increase in interest rates,” the Prime Minister said.
“In addition to our indexation of social security payments, we will guarantee the rate of income for people who could otherwise see their social security income drop because of the increase in interest rates.
“Our strong economic plan is the reason why we can afford to provide cost of living relief for Australians when they need it most.
“This guarantee will be a welcome relief to Australians who rely on both the social security system and modest income from investments by ensuring their payment rates are locked in.
“This builds on our commitments to support Australians on low incomes. Since 2019, our Government has reduced the deeming rate on three occasions which has put hundreds of dollars back in the hands of pensioners and other payment recipients.”
Treasurer Josh Frydenberg said the Budget delivered the largest improvement to the bottom line in more than 70 years which was allowing the Coalition to invest in temporary, targeted and responsible cost of living measures.
“Global factors such as high oil prices due to Russia’s invasion of Ukraine and supply chain disruptions due to COVID are putting pressure on household budgets here at home,” the Treasurer said.
“This guarantee comes on top of our $250 cost of living payments, halving fuel excise, expanding access to the Commonwealth Senior’s Healthcare Card and cutting the price of Government subsidised medications.”
Minister for Families and Social Services Anne Ruston said deeming rates were used to determine the income of social security payment recipients who are earning money through financial investments such as savings accounts, term deposits, managed investments, listed shares and securities and some income streams.
“We are absolutely committed to backing in our older Australians to enjoy a happy and healthy retirement,” Minister Ruston said.
“The lower deeming rate will be frozen at 0.25 per cent for financial investments up to $53,600 for single pensioners and $89,000 for pensioner couples.
“The upper deeming rate will remain at 2.25 per cent on investment assets over the amount of $53,600 or $89,000 respectively.”