What it means for pensioners
Written on the 8 May 2020 by Arrow
Federal Government's second support package announced March 22, flicked the switch to more income support for retirees.
Retirees affected by falling superannuation balances and deeming rates out of line with historically low interest rates have been offered some reprieve.
In addition to the cut in pension deeming rates announced in the first stimulus package, the Government has cut deeming rates by a further 0.25 percentage points.
Deeming rates are the amount the Government 'deems' pensioners earn on their investments to determine eligibility for the Age Pension and other entitlements, even if that rate is lower than they actually earn.
This move will bring deeming rates closer in line with the interest rates pensioners are receiving on their bank deposits, especially those with lower balances.
From 1 May 2020, deeming rates will fall to 0.25 per cent on investments up to $51,800 for singles and $86,200 for couples. A rate of 2.25 per cent will apply to amounts above these thresholds.