Millions of Australians receiving Centrelink support will see payment adjustments from 20 March 2026, as the government implements its regular indexation update. Alongside the increase in pension rates, a shift in deeming rates will also take effect—an important detail that could influence how much some recipients ultimately receive.
The combined changes aim to balance cost-of-living pressures with broader economic conditions. Here’s a clear and updated breakdown of what’s changing and what it means for Age Pensioners, JobSeeker recipients, Disability Support Pension recipients, Carer Payment recipients, and others relying on income support.
What’s Changing in March 2026?
Centrelink payments are adjusted twice a year, in March and September, to reflect inflation and wage movements. From 20 March 2026, more than five million Australians will benefit from updated rates.
Those receiving the full single rate of the Age Pension, Disability Support Pension, or Carer Payment will receive an increase of approximately $22.20 per fortnight.
Other payments also rising include:
- JobSeeker Payment
- Commonwealth Rent Assistance
- Parenting Payment
- ABSTUDY (age 22 and over)
While the final indexed amounts vary depending on personal circumstances, the March adjustment is designed to help offset higher living costs, including housing, groceries, and utilities.
Understanding Deeming Rates
While the payment increase brings relief, the update to deeming rates is equally significant.
Deeming is the method Services Australia uses to estimate income from financial assets such as savings accounts, shares, managed funds, and term deposits. Instead of assessing actual returns, Centrelink applies set interest rates to calculate “deemed income.” That figure is then included in the income test to determine payment eligibility and rates.
Deeming rates were frozen at historically low levels during the pandemic to protect pensioners from market instability and falling returns. However, with higher interest rates now in place, the government is adjusting them upward.
New Deeming Rates from 20 March 2026
From 20 March 2026, deeming rates will rise by 0.5 percentage points.
The updated structure is as follows:
| Category | Asset Threshold | Previous Rate | New Rate (March 2026) |
|---|---|---|---|
| Singles | First $64,200 | 0.75% | 1.25% |
| Couples (combined) | First $106,200 | 0.75% | 1.25% |
| Singles & Couples | Above threshold | 2.75% | 3.25% |
Although these new rates remain below the Reserve Bank’s official cash rate of 3.85 percent and below some high-yield savings or superannuation returns, they represent the first significant shift in years.
Why the Timing Matters
For the first time, the Australian Government Actuary has reviewed the deeming rates and provided formal recommendations. The government has adopted that advice, aiming to ensure the income test better reflects current financial conditions.
Importantly, the increase in deeming rates has been introduced alongside the March indexation rise. This coordinated timing reduces the financial shock for recipients who may see a modest reduction due to higher deemed income.
National Seniors Australia described the move as measured and incremental, noting that gradual adjustments are preferable to sudden large increases.
Who Will Feel the Impact?
Approximately 771,000 income support recipients are affected by deemed income calculations.
Breakdown of affected groups:
- Around 460,000 Age Pensioners
- 96,000 JobSeeker recipients
- 62,000 Disability Support Pension recipients
- 57,000 Parenting Payment (Single) recipients
Those with little or no financial assets are unlikely to notice any reduction. However, pensioners with substantial savings, investment portfolios, or large cash holdings may see a small decrease in their fortnightly payment due to higher deemed income.
How It May Affect Your Budget
For many recipients, the $22.20 per fortnight increase will offset most or all of the impact from higher deeming rates. But individual outcomes depend on total financial assets and personal circumstances.
If you have significant savings or investments, it’s worth reviewing:
- Your total assessable financial assets
- How much income is deemed under the new rates
- Whether you are close to income test limits
Keeping your Centrelink asset details accurate and up to date is essential, as incorrect reporting can lead to overpayments or unexpected reductions.
You may also want to use Services Australia’s online payment calculators to estimate your revised entitlement after 20 March 2026.
What Happens Next?
The government has indicated that deeming rates will continue to be reviewed regularly in line with broader economic conditions. Future changes are expected to be gradual rather than abrupt.
The March 2026 update reflects a broader effort to maintain fairness in the social security system while responding to shifts in interest rates and inflation.
Advocacy groups continue to call for additional reforms, including:
- Greater exemptions for employment income under the Age Pension income test
- Expanded concessions for essential services
- Additional cost-of-living relief measures for older Australians
While the latest changes do not introduce new concessions, they represent an attempt to align pension assessments with real-world returns.
Practical Steps to Take Now
With the changes approaching, consider:
- Reviewing your financial asset balance
- Checking your upcoming Centrelink payment dates (especially around Easter public holidays)
- Updating asset details through myGov
- Speaking to a financial counsellor if unsure how the adjustments affect you
Being proactive can help avoid surprises once the new rates take effect.
Key Takeaways
- Centrelink payments increase from 20 March 2026 through regular indexation
- Full single-rate pensioners will receive about $22.20 extra per fortnight
- Deeming rates rise by 0.5 percentage points
- Higher deemed income may reduce payments for those with larger financial assets
- Around 771,000 income support recipients are affected
- The adjustment is gradual and timed alongside indexation to soften impact
The March 2026 changes bring both higher payments and revised income calculations. For most Australians receiving Centrelink support, the net outcome should be manageable. Still, reviewing your financial position now can ensure you’re prepared and fully informed before the updates take effect.