The Federal Opposition is calling on the Turnbull Government to review deeming rates, which can effect pensioners and self-funded retirees.
Deeming rates are supposed to be a practical way for government to estimate the interest and dividend income earned by retirees on their assets. It’s applied to term deposits, share portfolios, bank accounts and a range of other investments.
Member for Macquarie, Susan Templeman, said that low interest rates mean the deeming rate urgently needs reviewing.
“Despite the fact that interest rates are currently at record low levels of 1.5%, the Government is insisting on leaving deeming rates artificially high at 3.25%,” Ms Templeman said.
“This means that people applying for a pension or part-pension are estimated by Centrelink to have an interest-based income much higher than they actually do.
“A single person, with $60,000 in the bank, might only be earning around 2% interest on their savings. But the Government assumes they are earning a rate 68% higher than that.
“It’s completely unfair, and it means may people in the Hawkesbury are excluded from accessing a pension or part-pension. And that means, they don’t have those extra few dollars to spend in our local community.
“No one wants to see older people forced into higher risk investments in order to get a return that more closely matches the deeming rate.
Ms Templeman said the Coalition Government has a poor track record in looking after retired people.
“Right now, they are trying to stop elderly people from receiving their pension if they go back to their place of birth, for example Malta, for more than 6 weeks.
Currently, pensioners can stay overseas for 26 weeks and receive their full pension. Following that time, the pension is reduced to a rate that depends on the number of years they have worked in Australia.
Under the Turnbull Government’s changes, from 1 January 2017 pensioners will have their pension cut after just six weeks.
This cut will hurt pensioners from overseas who want to return to their country of origin to visit their family and loved ones, which is probably something.
“In every single budget they have tried to cut the pension; they’re increasing the retirement age to 70; they’ve tried to change pension indexation.
“We should never forget that pretty much every dollar a part-pensioner or pensioner receives goes back into the economy – and most of it into local businesses.
“So it’s important for us all that pensioners’ assets are treated fairly.”
If you have any questions about old age pensions, contact Susan Templeman, Member for Macquarie P 45738222 or Susan.templeman. [email protected]