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Welcome to the September Adviser query of the month and technical briefing, an update of recent technical developments for financial advisers for the period from 27 July 2025 to 26 August 2025.
In this edition, the Adviser query of the month looks at the advice areas affected by the increase to Centrelink’s deeming rates from 20 September 2025.
Question
In addition to the Centrelink income test calculations, are there any other areas that my client could be affected by the increase to the deeming rates?
Answer
As noted in this Technical Briefing, both the upper and lower deeming rates will be increasing by 0.5 per cent from 20 September 2025.
The deeming rates are used to help determine an individual’s income for Centrelink and, in some cases, Department of Veterans’ Affairs (DVA) purposes.
Importantly, an increase to an individual’s assessed income doesn’t always result in a reduction to their Centrelink or DVA entitlements. This could be because:
Some other financial planning areas affected by the change to the deeming rates include:
Access to the CSHC requires the individual to satisfy an income test. The income test includes the following two components:
The income test thresholds for the CSHC will be increasing from the 20th of September 2025 which will help offset any additional deemed income relating to the increased deeming rates.
The current and new CSHC income test thresholds are as follows:
| Current 20 Sep 2024 – 19 Sep 2025 | New 20 Sep 2025 – 19 Sep 2026 | |
Cut-out threshold - single | $99,025 | $101,105 | Thresholds increased by $639.60 for each dependent child of the individual |
Cut-out threshold - couple | $158,440 (combined) | $161,768 (combined) | |
Cut-out threshold - couple (illness separated) | $198,050 (combined) | $202,210 (combined) | |
Further information in relation to the CSHC can be found on page 88 of Macquarie’s Big Black Book.
* Deemed income from account based pensions is not included in the income test for Commonwealth Seniors Health Card (CSHC) where the pension commenced on or before 31 December 2014 provided the CSHC is held continuously from 31 December 2014.
The aged care means tested fees (including the Hotelling Supplement and Non-Clinical Care Contribution under the aged care reforms from 1 November 2025) include deemed income as calculated using Centrelink’s income test.
An increase to the deeming rates could result in a higher means tested fee.
A further consideration for the means tested fee income test is the inclusion of Centrelink and DVA benefits in some circumstances. Should a client’s Centrelink/DVA benefits reduce because of the higher deeming rates, the assessed income under the means tested fee income test will reduce accordingly.
Similar considerations apply for Home Care Packages (to be called Support at Home under the aged care reforms).
The Government has announced a 0.5 per cent increase to deeming rates from the 20th of September 2025.
In announcing the change, the Government has stated that they ‘…will now gradually return deeming rates to pre-pandemic settings - that is, to reflect rates of return that pensioners and other payment recipients can reasonably access on their investments.’
The current deeming rates have been in place since 1 May 2020 and were frozen for a number of years due to COVID-19 and the associated economic conditions.
The following table shows the current and future rates:
Status | Deeming threshold | Current - rate below deeming threshold | Current - rate above deeming threshold | New – rate below deeming threshold | New – rate above deeming threshold |
| Single | $64,200 | 0.25% | 2.25% | 0.75% | 2.75% |
| Couple | $106,200 | 0.25% | 2.25% | 0.75% | 2.75% |
Further information can be found here: Media release – Ministers for the Department of Social Services, Overview of deeming – including historical rates and Centrelink – 20 September 2025 rates and thresholds
On the 31st of July 2025 the Department of Health, Disability and Ageing (the ‘Department’) released the final draft of the Aged Care Rules 2025 (the ‘Rules’).
The Department has advised that the final draft of the Rules is not for consultation. Instead, they’ve been released to help the aged care industry prepare for the commencement of the Aged Care Act 2024 on 1 November 2025.
In addition, the Government introduced the Aged Care and Other Legislation Amendment Bill 2025 (the ‘Bill’) to Parliament in July 2025. The Bill passed the House of Representatives and is in the Senate at the time of writing.
As noted in last month’s update, the Government introduced the Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 to Parliament which would, amongst other things, make the following changes to HELP:
This Bill has passed both houses of Parliament and is now law.
Further information can be found here:
On the 7th of August 2025 Treasury released the following two consultations:
1. Guidance on best practice principles for superannuation retirement income solutions
According to the consultation document:
'The principles are intended to help trustees design and deliver a suite of high-quality retirement income solutions for members. Retirement income solutions are an integrated set of products, product settings, and services that align with the objectives of the Covenant. For trustees, this includes offering appropriate engagement and guidance services that empower members to make informed choices. This recognises the key role of trustees in promoting retirement outcomes through quality retirement offerings.
The principles are voluntary, designed to be read and implemented holistically. Trustees can adopt and implement the principles in the manner most appropriate to providing their members with high quality retirement income solutions and satisfying their obligations. There will be no additional compliance action associated with trustees’ adherence to these principles (compliance would only relate to existing legal or prudential obligations). However, trustees are ultimately responsible to their members and should be able to explain to members why a principle has not been adopted and implemented.
The principles complement and build on existing trustee obligations under the current legislative and regulatory framework. While the principles do not replace, override or vary a trustee’s obligations under existing laws, they are intended to be clear and practical guidance on how a trustee can adapt their retirement phase offering to the composition of a fund’s membership.’
This consultation closes on the 18th of September 2025.
2. Retirement Reporting Framework: Increasing transparency for members
According to the consultation document:
‘The Government is committed to reforming the retirement phase of superannuation so the system delivers a better retirement for more Australians. These reforms are about improving choice and empowering Australians to make the most of their retirement as they live longer and healthier lives.
The Retirement Reporting Framework (the Framework) canvassed in this paper will create further transparency in the retirement phase of superannuation with annual publications on fund offerings and members’ outcomes. Improved transparency will help drive continuous improvement across the super sector in the retirement phase, as well as helping retirees and those approaching retirement make informed decisions about how they manage their super.
The Framework will require Registrable Superannuation Entity Licensees (trustees) to report on a series of indicators on their products, services and offerings, as well as metrics on their members’ behaviour, to understand how trustees are driving improved retirement outcomes.
This paper is seeking views to inform the Government’s selection of the indicators and metrics that will create a meaningful reporting framework that will ultimately help drive transparency and improved retirement outcomes. It is important that there is as much of a focus from trustees on retirement outcomes for their members as there has been on high investment returns in the accumulation phase.’
This consultation closes on the 5th of September 2025,
On the 30th of July 2025 ASIC released a consultation paper requesting feedback on proposed changes to Regulatory Guide 181 Licensing: Management conflicts of interest. This guide was last updated in August 2004.
Managing conflicts of interest is an obligation of financial services businesses and this update is aimed at aligning the guidance with changes in the law and policy.
This consultation closes on the 5th of September 2025.
Further information can be found here
Due to the Payday Super reforms, the Small Business Superannuation Clearing House (SBSCH) will close on 1 July 2026.
In addition, the SBSCH will be closed to new users from 1 October 2025.
The ATO is encouraging existing users to start taking steps to move to an alternative option. Considerations include assessing current software and payroll systems which may include super functionality, looking at commercial clearing houses, other software providers and services offered by some super funds.
Further information can be found here:
On the 20th of August 2025 the ATO published guidance to assist super funds in preparing to receive and allocate New Payment Platform (NPP) payments (enabling near real-time transactions) through SuperStream starting 1 July 2026.
Super funds that want to opt-in and begin receiving these payments ahead of 1 July 2026 can do so by following the instructions outlined in the ATO's guidance.
Further information can be found here:
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