The government will continue to freeze social security deeming rates at their current levels boosting the income available to age pension recipients including those within an SMSF.
Treasurer Jim Chalmers announced the ongoing freeze of the lower deeming rate of 0.25 per cent and upper deeming rate of 2.25 per cent during his budget speech in parliament stating it will continue to 30 June 2025 and benefit more than 870,000 people including 450,000 age pensioners.
The budget papers added the freeze would support “age pensioners and other income support recipients who rely on income from deemed financial investments, as well as their payment, to manage cost of living pressures” and the measure builds on a similar move in the 2022-23 October budget that lifted the income threshold for the Commonwealth Seniors Health Card.
Colonial First State head of technical Craig Day the freeze on the rates, which have been in place since 1 May 2020, would be a benefit to some SMSF members who currently receive a pension.
“For SMSF members who are entitled to an age pension the freeze of rates is good news because their pension will not be impacted by higher income payments from their investments,” Day told selfmanagedsuper.
“In short, any payments under the income test will not be hit by changes in the deeming rates.
“This has been an area of concern for many advisers and their clients because the rates have been at historic low levels and in a cost of living crisis even an increase of half of the current rates would have an impact.”
