Deeming Rate Changes & Centrelink Impacts for Aged Care Clients – What You Need to Know
As of 20 September 2025, Centrelink made its latest round of deeming rate changes and threshold indexation — and while some full pensioners got a welcome boost, others may feel the sting of reduced entitlements.
These changes aren’t one-size-fits-all, and the impact is especially important for aged care clients, many of whom are assessed as non-homeowners.
Let’s unpack what this means for you or your loved one receiving aged care, and how we can soften the blow.
Who’s Better Off – And Who’s Not?
According to recent modelling, here’s how the changes are playing out:
🟢 Positive Impacts
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Single full pensioners: up to +$772/year
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Couple full pensioners: up to +$1,165/year
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Couple homeowners: no negative impacts — indexation outweighs deeming increases
🔴 Negative Impacts
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Single homeowners with assets between $309,250–$324,000:
Pension reductions of up to -$37/year -
Single non-homeowners with assets between $309,250–$637,250:
Pension reductions of up to -$790/year -
Couple non-homeowners with assets between $521,500–$786,000:
Pension reductions of up to -$770/yearAge pension threshold cross ove…
💡 Note: Most aged care clients are assessed as non-homeowners, so these asset bands are crucial when reviewing your strategy.
Why This Matters for Aged Care Planning
When supporting a loved one in residential aged care, even a small drop in Age Pension can tip the balance in cash flow — especially when it’s funding daily care fees, DAPs or other living costs.
This is where structuring the right mix of assets and income becomes key to preserving entitlements.
How to Respond: Lifetime Income Streams & Strategy Zones
One way to reduce the impact of deeming is by investing part of the client’s portfolio into a lifetime annuity, which benefits from concessional Centrelink treatment.
According to Challenger’s latest modelling:
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Only 60% of the purchase price is counted under the assets test until age 85
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After that, only 30% is assessed
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60% of annuity payments are assessed under the income test
That’s equivalent to a Centrelink-effective return of up to 3.12% p.a., depending on personal circumstances
Challenger Age Pension Strategy…
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TACS Tip: Understand Your Strategy Zone
Using the “strategy zones” cheat sheet from Challenger, here’s where lifetime annuities might help aged care clients qualify for more pension:
| Client Type | Asset Range (Where an Annuity May Help) |
|---|---|
| Single Non-Homeowner | $650,000–$1,050,000 |
| Couple Non-Homeowner | $800,000–$1,450,000 |
| Single Homeowner | $350,000–$800,000 |
| Couple Homeowner | $500,000–$1,200,000 |
These zones reflect where a shift in asset structure (like using a downsizer contribution + lifetime income) could enhance outcomes
Challenger Age Pension Strategy
Final Thoughts
This latest round of Centrelink updates is a reminder that aged care advice is never “set and forget.”
With changes to deeming, thresholds, and funding rules happening regularly, staying flexible and informed is essential.
At Trusted Aged Care Services, we’ll help you:
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Reassess your Age Pension eligibility
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Model the impact of deeming and asset shifts
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Explore lifetime income strategies to help reduce Centrelink assessment
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Ensure your aged care plan remains sustainable and stress-free
📞 Get in touch today if you’re concerned about these changes or just want to double-check your strategy.