Deeming rate cuts benefit Pearce pensioners

Christian Porter.

Christian Porter.

More than 7350 people in Pearce will benefit from a multimillion dollar boost across the next four years following the federal government's decision to cut deeming rates.

The changes will affect about 628,000 age pensioners and more than 455,000 people receiving other payments.

Federal Member for Pearce Christian Porter said the decision would make a difference to the lives of people in his electorate.

"It will mean more money in the pockets of older Australians," he said.

"While 75 per cent of aged pensioners are not affected by deeming this decision recognises that it is an important issue for those who are. The government has taken a sensible approach to supporting older Australians because we understand that pensioners have finely balanced finances."

Deeming is the method the Department of Veteran Affairs uses to calculate income from residents' financial assets.

The lower deeming rate will decrease from 1.75 per cent to 1 per cent for financial investments up to $51,800 for single pensioners and $86,200 for pensioner couples.

The upper deeming rate will be cut from 3.25 per cent to 3 per cent for balances over these amounts.

The decision will take effect from September in line with the regular indexation of the pension and will be backdated to July 1.