The 2026 Australian Budget has brought noticeable changes to Centrelink payments, especially for pensioners, retirees and income‑support recipients.
These changes were introduced as part of the Government’s effort to help people manage rising living costs while updating the way financial assets are counted in payment calculations. The key focus areas include higher payment rates, updated deeming rates, revised income tests and adjustments to eligibility thresholds.
Understanding these changes is crucial for Australians who rely on Centrelink support, including Age Pension, JobSeeker, Disability Support Pension and other allowances. The impact varies depending on individual circumstances, particularly income and financial assets.
Key 2026 Centrelink Payment Changes
| Change Category | Detail | Expected Impact |
|---|---|---|
| Higher Payment Rates | Many Centrelink payments were increased to keep up with cost of living. | Recipients receive higher fortnightly amounts. |
| Updated Deeming Rates | Deeming rates on financial assets rose to 1.25% (lower tier) and 3.25% (upper tier) from 20 March 2026. | May reduce part‑pension payments for those with sizable savings. |
| Income Test Adjustments | Income thresholds and limits are updated in line with economic conditions. | Some recipients may see more or less support depending on income. |
| Asset Test Thresholds | Asset limits for pensions and allowances adjusted. | Eligibility for full or part payments may change. |
| Compliance & Reporting Requirements | Stronger reporting expectations to ensure correct entitlements. | Non‑reporting can lead to delays or suspension. |
Higher Centrelink Payments in 2026
One of the most important outcomes of the 2026 Budget is higher payment rates for many Centrelink benefits. This includes increases to Age Pension and other social security payments to help recipients manage inflation and rising daily expenses.
These increases generally occur through indexation, which adjusts payment rates based on changes in the cost of living and wage growth.
For older Australians, the Age Pension received a noticeable fortnightly increase in 2025, and these rates are carried forward into early 2026. These higher payment amounts aim to give recipients more financial breathing room amidst ongoing cost pressures.
Updated Deeming Rates and What They Mean
A major technical change in 2026 is the increase in deeming rates. Centrelink uses deeming to assess income from financial assets, such as savings accounts, term deposits, managed funds and shares. Instead of using actual earnings, Centrelink applies standard deeming rates to estimate income for income tests.
From 20 March 2026, the new deeming rates are:
- Lower tier deemed rate: 1.25%, applied to financial assets up to threshold.
- Upper tier deemed rate: 3.25%, applied to funds above the threshold.
These changes mean that people with larger savings may have higher deemed income, potentially reducing their part‑pension or payment amount. Conversely, pensioners with modest financial assets may continue to benefit primarily from payment indexation.
Income and Assets Tests
Centrelink evaluates eligibility and payment levels using both income tests and assets tests. The income test counts income from various sources, including deemed income, and compares it to allowable limits.
The assets test looks at the value of assets like property, investments and cash, then assesses eligibility based on set limits. Changes in these tests in 2026 reflect updated thresholds intended to maintain fairness and target support.
Asset thresholds differ depending on whether a person is single or part of a couple, and whether they own a home. Updated thresholds can affect whether someone receives a full pension, part pension or no payment.
How These Changes Affect You
People receiving Centrelink support should take these steps:
- Review your financial information on MyGov to ensure Centrelink has accurate data on savings and assets.
- Check the new payment rates and deeming rates that apply to your situation.
- Understand your income and asset test results for potential changes in entitlement.
- Respond promptly to any compliance notices to avoid suspension of payments.
The Centrelink 2026 Budget changes bring a mix of payment increases and technical adjustments to the social security system.
While most recipients will benefit from higher payment rates through indexation, the updated deeming rates and revised eligibility tests may affect entitlement for those with larger financial assets.
Being informed about how these changes work can help you better manage your financial situation and ensure you receive the correct support.
Frequently Asked Questions
Will Centrelink payments increase in 2026?
Yes. Most Centrelink payments, including Age Pension and other key allowances, received higher rates to reflect cost‑of‑living adjustments.
How do updated deeming rates affect my Centrelink payment?
Updated deeming rates are used to estimate income from financial assets. A higher deemed income can reduce part‑pension amounts for people with significant savings.
What should I do if I’m unsure about how changes affect me?
Review your payment details, ensure financial information is up to date with Centrelink, and check how income and asset tests apply to your situation.