Pensioners could be thousands of dollars better off if the federal government goes ahead with changes to asset testing following pressure from seniors’ groups and the opposition.
Deeming rates for the pension, which are as high as 3.25 per cent depending on an individual’s circumstances, were last set in 2015.
Since then, the Reserve Bank of Australia has cut the official cash rate five times to a new record low of just one per cent.
Social Services Minister Anne Ruston has indicated the government is close to making a decision on whether or not to lower the deeming rate.
“(I) have sought some pretty detailed advice which I’m considering and I’m consulting with my other cabinet colleagues,” she told ABC radio on Monday.
“We will be making our decision imminently.”
While 75 per cent of pensioners aren’t impacted by deeming rates issues the minister acknowledged it was an important matter was for the remaining 25 per cent.
At the moment, for singles, the first $51,800 of financial assets is subject to a deeming rate of 1.75 per cent and anything over $51,800 is deemed to earn 3.25 per cent.
For a couple, of which at least one receives a pension, the first $86,200 of combined financial assets has a deeming rate of 1.75 per cent and anything over $86,200 is deemed to earn 3.25 per cent.
Labor social services spokeswoman Linda Burney wants immediate action, arguing pensioners could be up to $3875 a year better off if the rate was brought in line with interest rates.
“There are about 627,000 people affected by this,” she told the ABC.
“Pensioners are really angry about this. They are furious and they’ve got every right to feel that way.”