With the start of 2026 in Australia, a significant change is taking place within social security schemes. As is the case every year, the government has once again updated Centrelink payments in March through indexation, ensuring that people’s financial stability is not eroded by the effects of inflation. Effective March 20, 2026, increases have been implemented across several major payment schemes, providing direct relief to millions of people.

However, alongside this relief comes another associated change—an increase in deeming rates. This particular change may impact the pension amounts received by some individuals. Therefore, it is crucial to understand how these two changes will affect your personal budget and future financial outlook.

Which Centrelink Payments Increased as of March 20, 2026?

The direct beneficiaries of this government decision will be those currently receiving payments under schemes such as the Age Pension, Disability Support Pension, and Carer Payment. Individuals receiving a pension at the single rate will now receive an additional amount of approximately $22.20 per fortnight.

Furthermore, increases have also been applied to several other payment schemes. These include:

• Commonwealth Rent Assistance
• JobSeeker Payment
• ABSTUDY (for individuals aged 22 years or older)
• Parenting Payment

These changes are set to benefit over 5 million people, including approximately 2.5 million age pensioners. This measure is particularly significant for those who rely on these payments to meet their daily living expenses.

What Are Deeming Rates, and Why Are They Important?

Deeming rates constitute a vital component of Australia’s pension system. When the government calculates your pension entitlement, it does not look solely at your actual income; it also factors in an estimated income (known as “deemed income”) derived from your assets.

This means that your savings, investments, shares, or other financial assets are assumed to be generating income at a specific, fixed rate—regardless of whether you are actually receiving that amount of income in reality. Deeming rates typically apply to the following:

• Bank savings and fixed deposits
• Investment funds
• Shares and securities
• Loans and other financial assets

The objective of this system is to stabilise pension payments and encourage individuals to invest.

What Changed in Deeming Rates in 2026?

During the COVID-19 pandemic, deeming rates were frozen to avoid placing additional financial pressure on individuals. However, effective March 20, 2026, these rates have been increased once again.

The new rates are as follows:

• A rate of 1.25% will now apply to assets up to the first $64,200 (previously 0.75%).
• A rate of 3.25% will apply to amounts exceeding this threshold (previously 2.75%).

The direct consequence of this may be an increase in your deemed income, which could result in a slight reduction in your pension amount.

Balancing Increased Pensions and Rising Deeming Rates

While the government has increased pensions and other payments on one hand, the rise in deeming rates on the other may result in some individuals receiving a lower pension. This represents an attempt to strike a balance; however, the impact may vary for each individual.

If you possess substantial financial assets, the increase in deeming rates will raise your deemed income, potentially leading to a reduction in your pension. Conversely, individuals with fewer assets may be able to receive the full benefit of the increased pension rates.

Who Needs to Pay Extra Attention?

If you hold savings, investments, or other financial assets, you should pay close attention to these changes. It is crucial that you understand how changes in deeming rates will affect your overall entitlements.

Specifically:

• Retirees whose income depends on a pension
• Individuals with significant investments or savings
• Families who rely partially on Centrelink payments

Should You Take Any Action?

In light of these changes, it is advisable to review your financial situation. If necessary, contact Centrelink or seek guidance from a financial advisor.

You can take the following steps:

• Assess your total assets and income.
• Understand how the new deeming rates will affect your payments.
• Update your budget to reflect these new changes.

Conclusion

The Centrelink payment increase of 2026 is a significant measure taken to protect millions of Australian citizens from the impact of inflation. However, due to the rise in deeming rates, not everyone may receive the full benefit of this increase equally.

Therefore, it is essential that you thoroughly understand these changes and adjust your financial plan accordingly. Accurate information and timely decision-making will help ensure your financial security in the future.

Ultimately, this change presents both relief and a challenge—it is now up to you to determine how you navigate it.

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