As we enter 2026, the economic situation for seniors aged 75 and over involves both opportunities and challenges. The Federal Government has implemented the usual March indexation, boosting fortnightly payments to help offset inflation. However, a major policy change regarding deeming rates has ended the previous freeze, creating a “pension warning” for those with lower to middle financial assets.
Understanding the Indexation Boost vs. Deeming Rate Increase
As of March 20, 2026, Age Pension rates have increased. Single pensioners will receive an additional $22.20 per fortnight, while couples will receive $33.40 more combined. Despite this cost-of-living adjustment, a 1.9% rise in the Consumer Price Index (CPI) for late 2025 and an increase in deeming rates have offset some of the benefits.
Deeming calculates income from financial assets for Centrelink purposes, regardless of actual earnings. The new 2026 rates are:
- Lower tier: 1.25%
- Upper tier: 3.25%
Higher deemed income may reduce your pension entitlement, especially if you hold substantial savings, stocks, or superannuation in the retirement phase.
2026 Thresholds and Part-Pension Calculations
Understanding asset and income thresholds is key. For a single homeowner aged 75+, assessable assets up to $321,500 allow full pension eligibility. Once you surpass the part-pension threshold, a tapering system reduces payments by $3 per $1,000 of excess assets.
These changes also affect eligibility for the Commonwealth Seniors Health Card (CSHC), which provides concessions on PBS medicines and utility bills. Higher deemed income may cause seniors to lose these benefits.
Age Pension Rates & Deeming Limits (Effective March 2026)
| Category | Full Pension | Deeming Rate (Lower) | Deeming Rate (Upper) |
|---|---|---|---|
| Single Person | $1,200.90 | 1.25% (up to $64,200) | 3.25% (over $64,200) |
| Couple (Each) | $905.20 | 1.25% (up to $106,200 combined) | 3.25% (over $106,200 combined) |
| Couple (Total) | $1,810.40 | — | — |
Over-75 Strategic Asset Management
2026 updates emphasize asset testing over income testing. Seniors may need to adjust financial strategies to avoid over-deeming. For instance, if your bank interest is 2.5% but Centrelink deems it at 3.25%, your pension may be reduced. Reassessing portfolios and aligning investments to the new deeming benchmarks is advised.
Support at Home reforms, replacing Home Care Packages, link pension eligibility directly to the amount you must self-fund for aged care. Every dollar counts when planning for future comfort and healthcare needs.
Why 2026 Matters for Retirees
The 2026 changes mark a shift from protective fiscal policies to stricter means-testing. Seniors aged 75+ can still benefit from the “work bonus,” earning up to $300 per fortnight without affecting pension payments. These updates highlight the importance of accurate asset reporting to Centrelink and careful financial planning for retirement.
Final Thoughts on Pension System Updates
While the March 2026 indexation is beneficial, the new deeming rate increases may offset these gains for many seniors. To maximize pension and concession eligibility, retirees should consider strategies such as gifting, downsizing, or reinvesting assets. Consulting Services Australia’s ‘Payment Finder’ or an aged care financial adviser is recommended for accurate planning and financial peace of mind.
FAQs
Q1 Will I need to do anything to receive the March 2026 increase?
No, the indexation increase is automatic. The adjusted amount will appear in your first full pay period after March 20, 2026.
Q2 Will my pension always be reduced with the higher deeming rates?
No. Only those impacted by the income test and higher deemed income will see reductions. Assets such as second homes may prevent any impact.
Q3 Will the Commonwealth Seniors Health Card (CSHC) limits change?
Yes. The income thresholds are updated, and higher deemed income may affect eligibility. Seniors should review their account-based pensions and bank balances to remain under limits.
