The Age Pension Went Up on 20 September. Here's Why Your Payment Might Not Have.

By Maria Anderson, P3 Financial Planning, Toowong. Last updated 29 September 2026.

If you get the Age Pension, you've probably seen the headlines: from 20 September 2026, the maximum rate rose by $36.80 a fortnight for singles and $27.80 each for couples.

The headlines mostly skip a second change that took effectthe same day: Centrelink's deeming rates also went up. For many part-pensioners, the higher deeming rates cancel out a large share of the increase.

Here's what changed, how the two changes interact, and what it looks like with real numbers.

What changed on 20 September 2026

Maximum Age Pension rates (including Pension Supplement and Energy Supplement):

Deeming rates:

This is the second deeming increase in 2026. The rates alsorose in March.

What is deeming, in plain English?

Centrelink doesn't look at what your savings and investments actually earn. Centrelink assumes they earn a set rate, the "deeming rate", and counts that assumed income under the Age Pension income test.

Deeming applies to:

• bank accounts and term deposits
• shares and managed funds
• superannuation once you reach Age Pension age (67)
• most account-based pensions started from 1 January 2015

Your deemed income is then added to any other income. If the total goes over the income free area, your pension reduces:

• Single: $226 a fortnight free area; above it, the pension drops 50 cents for every extra dollar.
• Couple: $396 a fortnight combined free area; above it, each partner's pension drops 25 cents for every extra dollar (50 cents between you).

Centrelink also runs the assets test and pays whichever test gives the lower pension. That's why a deeming rise can shrink yourincrease even when your assets haven't changed.

Worked example 1: a single homeowner

Margaret is 72, owns her home in Indooroopilly and has $200,000 in financial assets (term deposits and an account-based pension). She has no other income

• Assets test: $200,000 is well under the $333,000 full-pension threshold for a single homeowner, so she passes easily.
• Income test before 20 Sept: deemed income of about $198.62/fn, under the $226 free area. Full pension.
• Income test from 20 Sept: deemed income of about $237.08/fn, which is $11.08 over the free area. At 50 cents per dollar, her pension reduces by $5.54/fn.

Result: Margaret's pension rises by about $31.26 afortnight, not $36.80. Nothing about her money changed. Only Centrelink'sassumption about what it earns did.

Worked example 2: a homeowner couple

Peter and Alice are both over 67 and own their home in Kenmore. They have $450,000 in financial assets plus about $40,000 in carsand contents, which puts them just under the $499,000 couple assets-testthreshold.

• Before 20 Sept: deemed income of about $477/fn, $81 over the free area. Combined pension: about $1,769.69/fn.
• From 20 Sept: deemed income of about $564/fn, $168 over the free area. Combined pension: about $1,782.02/fn.

Result: their combined pension rises by about $12.33 a fortnight, compared with the $55.60 in the headlines. The deeming rise used up roughly three-quarters of the increase.

Both examples are simplified illustrations using the rates and thresholds in force from 20 September 2026. Real assessments dependon your full circumstances.

Three things people get wrong about this

1. "My pension went up, so I'm better off by theheadline amount."
Only if you're on the full pension and your deemed income stays under the free area. Part-pensioners assessed under the income test will usually see less.

2. "My bank only pays 1%, so Centrelink can't count more than that."
They can. Deeming ignores actual returns. If your cash earns less than the deeming rate, Centrelink still counts the higher deemed amount.

3. "The assets test is the one that matters."
For many retirees with a few hundred thousand in savings, the income test now sets their payment. As deeming rates rise, more people move from being assessed under the assets test to the income test. Knowing which test applies to you is the starting point for any planning.

What's worth reviewing now

We can't say what's right for your situation in a blog post.After an indexation like this, though, retirees commonly review with their adviser:

• which test (income or assets) is currently setting their pension
• how their financial assets are structured and how each is assessed
• whether their Centrelink records reflect current balances
• how any planned changes (gifting, downsizing, moving into aged care) would interact with the means tests

Frequently asked questions

How much is the Age Pension from 20 September 2026?
$1,237.70 a fortnight for a single person and $933.00 each for a couple($1,866.00 combined), including supplements.

What are the Centrelink deeming rates from 20 September 2026?
1.75% on the first $66,800 of financial assets for singles ($110,600 combinedfor couples), and 3.75% on anything above that.

How much can I earn before my Age Pension reduces?
The income free area is $226 a fortnight for singles and $396 a fortnight combined for couples. Deemed income from your investments counts toward this.

Why didn't my Age Pension go up by $36.80?
If you're a part-pensioner assessed under the income test, the rise in deemingrates on the same day increased your assessed income. That reduced part of the increase.

When is the next Age Pension increase?
Payment rates are reviewed on 20 March and 20 September each year, so the next scheduled indexation is 20 March 2027.

About P3 Financial Planning

‍P3 Financial Planning is a Toowong-based financial advice practice helpinr etirees and pre-retirees across Brisbane's western suburbs with retirement income strategies, Age Pension and Centrelink planning, aged care advice, superannuation and estate planning. Rated 5.0 stars on Google, we've advised 400+families over 20+ years.

General advice warning: This article contains general information only and does not take into account your personal objectives, financial situation or needs. Before acting on any information, consider it's appropriateness to your circumstances and seek personal financial advice. Figures are current as at 29 September 2026 and may change.

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