If you’re on the Age Pension or another Centrelink payment in Australia, the March 2026 update brought mixed news. While most people saw a small boost from indexation to help with rising costs, the simultaneous rise in deeming rates hit some harder than others. This created a “give with one hand, take with the other” situation for certain retirees. The main group feeling reductions right away? Part pensioners with significant financial assets like savings, shares, or investments. Full pensioners generally came out ahead, but those relying heavily on deemed income from assets often saw their payments drop or stay flat despite the base rate increase.
What Changed in the March 2026 Update?
The core change was the regular March indexation, effective from 20 March 2026, which lifts pension rates based on CPI, living costs, and wages. At the same time, deeming rates the assumed return on financial assets—went up too, reflecting higher interest rates.
New maximum full Age Pension rates (including supplements):
- Single: $1,200.90 per fortnight (up $22.20, or about $11.10 per week).
- Couple (each): $905.20 per fortnight (up $16.70 each, combined up $33.40).
Income and asset test cut-off points also rose slightly, which helped some part pensioners qualify for more or regain eligibility.
But deeming rates increased:
- Lower rate: 1.25% on the first $64,200 (singles) or $106,200 (couples combined).
- Upper rate: 3.25% on amounts above that (up from 0.75% and 2.75% previously).
This second hike in deeming (after one in late 2025) means more “deemed” income counts under the income test, reducing payments for those with assets.
- Part pensioners with modest assets might still gain overall from the indexation and higher thresholds.
- Those with larger financial holdings (say, over $200,000–$300,000+) often see the deeming rise outweigh the payment boost.
Who Will Lose Benefits First?
The people most likely to see reductions or the smallest gains are part-rate Age Pensioners with substantial financial assets. Deeming assumes your savings earn a set return even if actual interest is lower or higher, so when rates rise, Centrelink counts more income against you.
- Retirees with term deposits, shares, or managed funds in the hundreds of thousands get hit hardest—the extra deemed income can cut payments by $10–$50+ per fortnight or more, wiping out the indexation gain.
- Full pensioners (those under the lower asset/income thresholds) usually keep or increase their full amount without deeming impacts.
- Transitional rate pensioners (on older rules) might see changes too, but most move to current rates if better.
No one loses the pension entirely from this update unless assets already exceed cut-offs, but part pensioners near the edge feel it quickest. The government says deeming helps fairness, but critics call it a sneaky cut for asset-rich retirees.
Other Related Adjustments
Asset and income thresholds went up modestly in March, which can let some people get a bit more pension or qualify who were just over before.
- For example, higher cut-offs mean you can have more assets before payments reduce fully.
- Work Bonus and other supplements stay the same, helping employed pensioners.
- No major structural changes like age rises or new tests—just the usual indexation plus deeming tweak.
These balance things for some, but the deeming rise dominates for asset-heavy cases.
The 2026 pension updates deliver a welcome indexation boost for most, with singles up around $11 per week and couples seeing similar per-person gains. But the deeming rate increase means part pensioners with larger financial assets are the first to lose out their extra deemed income often reduces payments more than the base rise helps. Full pensioners and those with minimal savings generally benefit cleanly. It’s automatic no action needed but if your payment drops unexpectedly, check your myGov account or call Services Australia. These tweaks aim to match economic conditions, though they sting for some retirees more than others.
