Deeming rates have risen again. From 20 September 2026 the lower deeming rate is 1.75% and the upper rate is 3.75%, up by half a percentage point from the 1.25% and 3.25% that applied from 20 March 2026. If you receive a part Age Pension or another income support payment and you are thinking about financing a car, this change matters, because deeming helps decide how much pension you actually receive, and your pension is part of the income a car lender assesses.
Here is what the change involves and how it feeds into your borrowing power.
What changed on 20 September 2026
Services Australia confirmed that deeming rates increased to 1.75% and 3.75% on 20 September 2026. That is the latest in a series of gradual half a percentage point steps. Deeming rates were frozen for several years during the pandemic, then lifted to 0.75% and 2.75% in September 2025 and to 1.25% and 3.25% in March 2026. The Minister for Social Services sets the rates, which are meant to reflect the returns people can reasonably earn on savings and investments.
The increase applies automatically. Services Australia recalculates deemed income for affected customers, so there is nothing you need to lodge.
What deeming actually is
Deeming is a set of rules that assumes your financial assets earn a set rate of return, regardless of what they actually earn. Financial assets include savings accounts, term deposits, shares, managed funds and money held in superannuation once you reach Age Pension age. Instead of tracking the real interest or dividends on each account, Services Australia applies the deeming rates to the total, and the resulting figure counts as income under the income test.
That matters because the income test is one of two tests, alongside the assets test, that set your payment. Whichever test produces the lower payment is the one that applies. If your payment is set by the income test, a higher deeming rate lifts your deemed income and can trim your payment slightly.
The new deeming thresholds
The rate that applies depends on how much you hold and your relationship status. From 20 September 2026:
- If you are single, the first $66,800 of your financial assets is deemed to earn 1.75%, and anything above that is deemed to earn 3.75%.
- If you are a member of a couple and at least one of you receives a pension, the first $110,600 of your combined financial assets is deemed at 1.75%, with the balance deemed at 3.75%.
- If you are a member of a couple and neither of you receives a pension, the first $55,300 of each person's share is deemed at 1.75%, with the balance at 3.75%.
Any real return you earn above the deemed amount does not count as income, which is one reason the rules exist.
How this flows through to your car loan
A car lender does not apply deeming. What a lender looks at is the income that actually lands in your account, and for many older borrowers that includes an Age Pension payment. If a higher deeming rate reduces your part pension, the income you can show on a car loan application falls by the same amount.
For most pensioners the effect is small or nil. If your payment is set by the assets test rather than the income test, a change in deemed income does not move your pension at all. If your financial assets are modest and sit largely under the lower threshold, the half a percentage point rise adds only a little deemed income. The borrowers most likely to notice are part pensioners with larger balances above the threshold, where the extra deemed income tapers the payment down.
You can get a feel for how a change in income affects repayments by running the numbers through our car loan calculators before you apply.
How lenders treat pension and investment income
Pension income can be perfectly acceptable to a car lender, but the way it is treated varies. Some lenders accept the Age Pension and other regular Centrelink payments as income, others limit how much of it they will count, and some require it to be combined with income such as employment or a self funded retirement stream. Investment income from shares or a term deposit may also count where it is regular and documented.
Because policies differ, it is worth seeing where your income profile fits before you commit. Our guide to comparing car loan rates and the lender directory set out how different providers position their products, and if you already have a loan, it can be worth reviewing whether refinancing suits your current circumstances.
What this means if you are on a part pension
If you receive a part pension and want to finance a car, a few practical points follow from the change:
- Check your latest income statement. After 20 September 2026 your deemed income, and possibly your payment, may have shifted, and the figure a lender wants is your current payment.
- Have your documents ready. Lenders generally ask for a recent Centrelink income statement and bank statements that show the payment arriving.
- Look at the whole picture. Deemed income is only one input, because your living costs, other debts and the size of the loan all feed into serviceability.
This is general information rather than financial advice. It is meant to help you understand how a Centrelink change can reach a car loan application.
Where this sits in the bigger picture
The deeming increase landed on the same day as the regular indexation of pension payments on 20 September 2026, so some pensioners will see their base rate rise even as deemed income edges up. The two changes can move in different directions, and the net effect depends on your individual mix of assets and income. Similar income questions apply to anyone on a fixed payment, which is why it helps to understand how much you can borrow on an average income as well. For anyone planning a vehicle purchase, the sensible step is to work from your actual current payment figure rather than last quarter's, and to compare lenders that suit your income profile.
