![\"Pensions](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/08\/d69543e98097d490a4ccce4c2f7ba414fc3f9e5d.jpeg\")
<\/p>\nBaby boomers\u2019 pensions will be reduced as the Albanese government ends a three-year freeze and adjusts rates used to calculate how much retirees can earn on their cash investments.<\/p>\n
Social Services Minister Tanya Plibersek quietly issued a statement on Tuesday afternoon, during the government\u2019s high-profile economic roundtable, to reveal the end of a policy put in place by the Morrison government during the start of the COVID pandemic.<\/p>\n
<\/p>\n
Pensions will fall as deeming rates are adjusted after more than five years of no movement. Credit: Greg Newington<\/p>\n
Under the change, the expected or \u201cdeemed\u201d return on investments held by age pensioners \u2013 including self-funded retirees \u2013 will be lifted from 0.25 per cent to 0.75 per cent.<\/p>\n
While the changes to individual age pensioner\u2019s payments will vary based on their financial assets, the move comes as interest rates on savings accounts fall and is likely to enrage seniors who fought against sluggishly high deeming rates in 2019.<\/p>\n
The three-year freeze came to an end on July 1, two months after the election.<\/p>\n
Deeming is the process used by the government to calculate a uniform return on financial investments, such as savings accounts and term deposits, to simplify income rates when calculating pensions. Instead of requiring pensioners to provide their actual earned income on financial investments, a deemed rate is applied.<\/p>\n
Current deeming rates, which Plibersek said had been kept \u201cartificially low\u201d since 2020, have remained well below real earnings from investments, inflating people\u2019s pension payments.<\/p>\n
She said the government kept this setting after the pandemic to \u201chelp shield age pensioners and other income-support recipients while the economy recovered\u201d.<\/p>\n
But bank deposit rates have lifted, largely in line with movements in the official cash rate, since the government put in place its deeming rate freeze.<\/p>\n","protected":false},"excerpt":{"rendered":"Baby boomers\u2019 pensions will be reduced as the Albanese government ends a three-year freeze and adjusts rates used…\n","protected":false},"author":2,"featured_media":80004,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185],"class_list":{"0":"post-80003","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/80003","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=80003"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/80003\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/80004"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=80003"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=80003"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=80003"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}