DATE OF ISSUE: 12 SEPTEMBER 1997
DEEMING RATE REDUCTION
Purpose |
The purpose of this departmental instruction is to provide information on the new deeming rates. |
Background |
On 15 August 1997, the Minister for Social Security announced that the deeming rates used to assess income from financial investments would drop by one per cent. These rates would apply from the first payday after 20 September 1997. Under s46J of the Veterans' Entitlements Act 1986, the Minister for Social Security's determination automatically applies to Veterans' Affairs pensioners. |
Process |
While the Minister for Social Security has monitored interest rates on an ongoing basis, any changes in rates now coincide with the March and September pension indexation increases. |
New Rates |
The new deeming rates will be 3 per cent on the first $30,400 of financial investments for a single pensioner and the first $50,600 for a pensioner couple. For financial investment balances above these amounts, the new deeming rate will be 5 per cent. Single pensioners can continue to have up to $64,160 in financial investments and couples up to $111,760 and still receive the maximum rate of pension. The deemed income on these amounts is equivalent to the 'income free areas' of $100 per fortnight for a single pensioner and $176 for pensioner couples respectively. |
Who will be affected |
These rate changes should not affect Income Support pensioners who receive the maximum rate of pension. In many cases, pensioners receiving less than the maximum rate of pension should receive a pension increase from pension payday 25 September 1997. |
Effective date |
This change will take effect from 20 September 1997. Any changes in pension rates will thus apply from the next DVA payday - 25 September 1997. |
Advices |
Department of Veterans' Affairs has sent advices to all Income Support pensioners receiving less than maximum rate pensions in September 1997. (DI C42/97 refers.) Business Delivery Section will advise State Offices when the standard letters templates that reflect the new deeming rates have been updated. |
Publicity |
DVA will publicise these changes by the following means: |
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Press release: The Minister for Social Security issued a press release on 15 August announcing this change. |
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Newspapers: DVA and DSS will commence a joint print advertisement campaign in the period immediately prior to the change on 20 September. These advertisements will target regional, suburban, ethnic and older peoples' press as well as SBS Radio. Pensioners will be advised to contact their local Veterans' Affairs office only if they require further information. |
Contact officer |
For further information, please contact Peter Read on (06) 289 6426 or |
Authorised by |
R J HAY BRANCH HEAD INCOME SUPPORT |