The Centrelink Pension Increase: 3 Things to Check

There’s good news heading your way on 20th September, but it comes with an asterisk.

More than 5.3 million Australians are getting a pay rise from Centrelink that day. It’s the twice-yearly indexation round, and it lifts the Age Pension, Disability Support Pension, Carer Payment, JobSeeker, Parenting Payment, Youth Allowance, ABSTUDY and Commonwealth Rent Assistance. The Government has put about $4 billion behind it.

You don’t need to apply. You don’t need to fill in a form. It just happens.

Here’s the asterisk: on exactly the same day, deeming rates go up too. And for some part-pensioners, that second change can eat a decent chunk of the first one.

Centrelink Pension Increase – The Good Bit

From 20th September 2026, the maximum Age Pension (including the Pension and Energy Supplements) rises to:

• Singles: $1,237.70 a fortnight — up $36.80
• Couples: $933.00 each, or $1,866.00 combined — up $55.60 combined

The Disability Support Pension and Carer Payment sit at the same maximum rates, so they move by the same amount.

JobSeeker climbs about 2% to $824.90 a fortnight, and Commonwealth Rent Assistance for a single person with no children lifts $4.40 to $223.80. Parenting Payment and Youth Allowance also get a nudge.

It’s the biggest pension indexation bump in a few years.

The Asterisk: What is Deeming?

Deeming is Centrelink’s polite fiction about your savings.

Rather than chase down what every one of your term deposits, savings accounts, managed funds and shares actually earned last year, Centrelink simply assumes a rate of return and assesses you on that. Your real returns don’t come into it.

Think of it like a rental appraisal on a house you’re not renting out. The agent says “this place would fetch $600 a week.” It doesn’t matter that it’s empty, that’s the number on the page.

Deeming works the same way. Centrelink decides what your money should be earning, and tests your pension against that figure.

Two rates apply:

• The lower rate covers your first $66,800 in financial assets (or $110,600 for a couple, combined)
• The upper rate applies to everything above that

From 20th September, both go up half a percentage point. The lower rate moves from 1.25% to 1.75%. The upper rate moves from 3.25% to 3.75%. The thresholds themselves aren’t changing.

Higher deeming rate means higher assumed income. Higher assumed income means a bigger reduction under the income test. Which means a smaller pension.

What That Looks Like in Real Money

Margaret is 71, single, owns her home in Wynnum, and has $250,000 sitting across a term deposit and an account-based pension.

Her assets are comfortably under the full-pension threshold, so the income test is what’s doing the work here.

Before 20 September, Centrelink deems her income at roughly $261 a fortnight. She’s allowed $226 before her pension starts reducing, so she’s $35 over, and loses about $17.56 a fortnight.

After 20 September, the same $250,000 is deemed at roughly $309 a fortnight. Now she’s $83 over the free area, and loses about $41.60 a fortnight.

So her pension increase is $36.80. Her deeming-driven reduction grows by about $24. Margaret is genuinely better off, but by around $12.76 a fortnight, not $36.80.

She keeps roughly a third of the increase she read about in the paper.

(Simplified and rounded, and Margaret isn’t real. Your own numbers depend on your assets, your relationship status, whether you own your home, and what else you’ve got going on.)

Three Things Worth Doing This Month

1. Check what your cash is actually earning. If Centrelink is deeming your savings at 3.75% and your bank is paying you 2.1%, you’re being assessed on money you never received. That’s a solvable problem and it’s the single most common one we see. COTA Australia has made exactly this point, arguing banks have a responsibility to pay pensioners more than the rate Services Australia assumes they’re earning.

2. Look at where your money is sitting, not just how much of it there is. Deeming applies to financial investments: savings, term deposits, shares, managed funds, account-based pensions. It doesn’t apply to your home, your car, or an investment property (though rental income is counted separately). Structure matters.

3. Read the Centrelink letter properly. You’ll get one. If the new figure isn’t what you expected, that’s usually the deeming change showing up, not a mistake. But it’s worth checking rather than assuming.

The Bottom Line

More money is more money, and 20th September will be a good day for millions of Australians. But “the pension going up $36.80” and “your pension going up $36.80” are two different sentences, and the gap between them is where the deeming rates live.

If you’re on a part pension, or you’re heading toward one in the next few years, this is a good moment to sit down and look at the whole picture rather than just the headline.

That’s the sort of thing we do all day. If you’d like a hand working out where you’ll land after 20th September, book a chat with the HPartners team — we’ll bring the calculator, you bring the questions.