Key technical updates – Autumn 2026
This article highlights upcoming changes to key social service payments as well as proposed reform affecting long-term wealth.
Age Pension changes
Higher inflation as captured by the Consumer Price Index (CPI) and the Pensioners and Beneficiaries Living Cost Index (PBLCI) will see a notable boost in pension payments. A summary of the changes (including both Pension Supplement and Energy Supplement payments) is highlighted below.
Estimated changes to the Age Pension fortnightly payment basis [1]
| Household type | Current rate | Estimated rates for 20 March | Estimated total per year |
| Single | $1,178.70 | $1,200.90 | $577.20 |
| Couple (each person) | $888.50 | $905.20 | $434.20 |
| Couple (combined) | $1,777.00 | $1,810.40 | $868.40 |
| Couple apart due to ill health | $1,178.70 | $1,200.90 | $577.20 |
Note that the above table are estimates currently with the official rates still to be announced on 20 March. In addition, these entitlements will have to be balanced for changes in other rates that may impact personal circumstances. For example, the updated deeming rates will likely reduce Age Pension entitlements as discussed further below.
Deeming rates
Deeming rates refer to the returns assumed for financial assets that you hold. Typical financial assets include [2]:
- Cash holdings (e.g. savings accounts or term deposits)
- Managed investment strategies
- Listed shares and securities such as Exchanged-Traded Funds (ETFs) or Listed Investment Companies (LICs).
The ATO applies these rates your asset values to approximate the income you were deemed to have earned and includes this in the Income Test for social security purposes. The upcoming changes are seen as better reflecting the returns that individuals can earn on “safe” assets such as cash given current interest rate levels with the RBA Cash rate at 3.85%.
Upcoming changes from 20 March versus current deeming rates
| Household type/asset amount | Current rates [3] | New rates from 20 March |
| Single person | ||
| First $64,200 | 0.75% | 1.25% |
| Amounts above $64,200 | 2.75% | 3.25% |
| Couple with at least one receiving a pension | ||
| First $106,200 | 0.75% | 1.25% |
| Amounts above $106,200 | 2.75% | 3.25% |
| Couple with neither receiving a pension | ||
| First $53,100 | 0.75% | 1.25% |
| Amounts above $53,100 | 2.75% | 3.25% |
Example: A couple, neither of whom receives a pension, holds $1,000,000 in financial assets, how much has their deemed income changed?
- Current calculation: 0.75% x ($53,100) + 2.75% x ($1,000,000-$53,100) = $26,438
- New calculation: 1.25% x ($53,100) + 3.25% x ($1,000,000-$53,100) = $31,438
The income they were deemed to have earned has risen, in this case by $5,000, which will reduce income support that they are entitled to. A similar outcome will be seen in any scenario where deemed income is part of the calculation for benefit entitlements.
Retirement Essentials has noted that homeowners with significant assets that are susceptible to the Income Test are likely to be affected, for example [4]:
- Single homeowners with savings from $215,000 to $340,000 could face a reduction to their Age Pension of up to ~$838 per year and
- Couple homeowners with savings of $370,000 to $495,000 could likewise see a reduction of up to $1,225 per year.
Mooted changes to capital gains taxation
The Federal government is also reportedly considering reform for capital gains taxation as part of its upcoming Budget announcement on May 12. The latest proposal looks to reduce the Capital Gains Tax discount of 50 per cent to a less generous 33 per cent rate. This reduction would increase tax liabilities but, importantly, be limited to housing investments only [5].
The proposal will not apply retrospectively i.e. purchases made prior to its implementation will enjoy the current discount. The thinking behind this reform is to reduce the attractiveness of housing as an investment vehicle and reduce competition for prospective homeowners looking for a place to live rather than an investment option.
This change is currently being explored by the government but there are no guarantees that this iteration will be the final version or, for that matter, that it will be legislated as public outcry may stifle the willingness to reform tax settings.
Footnotes
[1] ‘Age Pension increases on 20 March 2026’, Retirement Essentials (27 February 2026), Age Pension increases on 20 March 2026, (accessed 2 March 2026).
[2] ‘Deeming’, Services Australia, Deeming – Age Pension – Services Australia (accessed 9 March 2026).
[3] Same as above at 10.
[4] J. Duffield, ‘What the new deeming rates mean for your Age Pension’, Retirement Essentials (6 March 2026), What the new deeming rates mean for your Age Pension, (accessed 7 March 2026).
[5] P. Coorey, ‘Treasury examines 33pc CGT deduction’, Australian Financial Review (25 February 2026), Treasury considers cutting capital gains tax discount to 33 per cent to raise revenue, (accessed 26 February 2026).
