Federal Member for Bendigo Lisa Chesters has called on the Liberal Government to urgently review the pension deeming rates, which are leaving Central Victorian pensioners out of pocket.
“Last week, the Reserve Bank cut the cash rate to a record low of 1.25 per cent, yet the Government’s deeming rates for the purposes of testing income for the pension remain as high as 3.25 per cent,” Ms Chesters said.
“It is clear that the deeming rates no longer reflect the actual return that many pensioners are able to earn on their savings.”
Almost 70 per cent of residents over the age of 65 in Bendigo receive the Age Pension.
It has been over four years since the Government last adjusted the deeming rates.
In this time, the cash rate has fallen from 2.25 per cent to a record low of 1.25 per cent today. Standard term deposit rates are now two per cent or less.
And yet, the Government’s deeming rates hold steady at 3.35 per cent.
“Higher deeming rates mean it’s assumed pensioners are earning more off their interest than they actually are,” Ms Chesters said.
“This could be affecting payment amounts or even access to the pension altogether.
“By refusing to review its deeming rates for adjustment, the Government is short-changing pensioners.”
Bendigo pensioner Ruth Hosking says she’s concerned pensioners are being ignored.
“It’s not that complicated, if the cash rate is cut, deeming rates should be reduced also.”
“It’s alarming that pensioners are not being treated fairly.”