In a press conference on Wednesday, Mr Frydenberg said the current deeming rates of 1% and 3% are under very serious consideration and conceded that times were tough for depositors.

"We are now having another look at the deeming rate," Mr Frydenberg said. 

"That change that we introduced - announced last year was around $600 million in terms of its cost.

"But we do recognise that both depositors and also borrowers are affected here by the changing interest rates."

Interest rates have been cut eight times since 2015, but deeming rates have only been cut twice in that time, most recently in July of last year. 

The government has been accused of hypocrisy for calling on the banks to pass on interest rate cuts in full but not passing on the cuts to pensioners. 

National Seniors Australia Chief Ian Henschke told Savings.com.au that the government not passing on this cut essentially amounted to wage theft. 

"But I can tell you that if that was a private company doing that, their behavior would be seen as unconscionable," Mr Henschke said.  

"And also, if it was a private company doing that to their wage and salary earners, which in a way pensioners are, you'd be saying that you were involved in wage theft because they're actually taking money from people by not passing that on."

deeming

Source: National Seniors Australia 

Mr Henshke called for immediate action to lower deeming rates and said the government was balancing the budget on the backs of pensioners. 

“The top rate needs to be lower by at least 1.5% and the lower by 0.5%,” he said. 

“And to suggest older Australians “have a suite of investment options” flies in the face of reality when hundreds of billions of dollars have just been wiped from the share market.”

Mr Henshke pointed to the fact that the best savings account and term deposits rates only just exceeded 2%, well below the high deeming rate of 3%. 

Want to earn a fixed interest rate on your cash? The table below features term deposits with some of the highest interest rates on the market for a six-month term.

Provider

At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]5000$product[$field["value"]]$product[$field["value"]]More details
  • Easy online application
  • Interest can be paid to other institutions
  • Maturity alert by email and phone

Term Deposit - 6 months

  • Easy online application
  • Interest can be paid to other institutions
  • Maturity alert by email and phone
At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]10001$product[$field["value"]]$product[$field["value"]]More details
  • $1,000 minimum deposit
  • Easy online application
  • Let your money work for you

Term Deposit - 7 months

  • $1,000 minimum deposit
  • Easy online application
  • Let your money work for you
At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]5000$product[$field["value"]]$product[$field["value"]]More details
  • Guaranteed rate of return
  • Manage your term deposit online
  • Choose your own term - Options range from one month to five years

Term Deposit - 6 months

  • Guaranteed rate of return
  • Manage your term deposit online
  • Choose your own term - Options range from one month to five years
Annually, Semi-Annually, At Maturity, Monthly$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]5000$product[$field["value"]]$product[$field["value"]]More details

Term Deposit - 6 months

    At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]25000$product[$field["value"]]$product[$field["value"]]More details

    Term Investment ($25k-$100k) - 6 months

      At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]500031$product[$field["value"]]$product[$field["value"]]More details

      TDs Premier Investment ($5k - $250k) - 6 months

        Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]500031$product[$field["value"]]$product[$field["value"]]More details

        Term Deposit ($5000-$999999) - 6 months

          Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]25000031$product[$field["value"]]$product[$field["value"]]More details

          Term Deposit ($250k+) - 6 Months

            At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100031$product[$field["value"]]$product[$field["value"]]More details

            Term Deposit ($1000+) - 6 months

              Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100031$product[$field["value"]]$product[$field["value"]]More details

              Term Deposit ($1000+) - 6 months

                Annually, At Maturity, Monthly$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]1000031$product[$field["value"]]$product[$field["value"]]More details

                Term Deposit ($10000+) - 6 months

                  Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]1000031$product[$field["value"]]$product[$field["value"]]More details

                  Term Deposit - 6 months

                    Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]50007$product[$field["value"]]$product[$field["value"]]More details

                    Term Deposit - 6 Months

                      Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100031$product[$field["value"]]$product[$field["value"]]More details

                      Term Deposit - 6 months

                        At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]500031$product[$field["value"]]$product[$field["value"]]More details

                        Term Deposit - 6 months

                          At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]2500031$product[$field["value"]]$product[$field["value"]]More details

                          Term Deposit ($25k-$5m) - 6 months

                            At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]500000$product[$field["value"]]$product[$field["value"]]More details

                            Fixed Term Deposit ($500000+) - 6 months

                              At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]10007$product[$field["value"]]$product[$field["value"]]More details

                              Term Deposit ($1k-$1m) - 6 months

                                At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]250000$product[$field["value"]]$product[$field["value"]]More details

                                Fixed Term Deposit ($250000-$500000) - 6 months

                                  Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]50031$product[$field["value"]]$product[$field["value"]]More details

                                  Term Deposit ($500-$19999) - 6 months

                                    Important Information and Comparison Rate Warning

                                    All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of April 18, 2024. View disclaimer.

                                    Calls for an independent body to set deeming rates 

                                    Mr Henschke told Savings.com.au the pension and deeming rate system was in desperate need of an overhaul, with the government failing tens of thousands of pensioners.

                                    "I believe that we should have a system where people can work if they wish to work, particularly those that want to work, shouldn't lose their pension entitlements for working," he said. 

                                    "I think we really have to rethink this whole idea of what the pension is because it was created at a time when most people owned their own homeAnd so therefore, the majority of people were able to get by on a pension.

                                    "But now when you've got so many people entering pension age range, particularly women, we know that one in four Australian pensioners are living below the poverty line."

                                    He called for an independent body to control the pension and how deeming rates are set, to stop the government from propping up the budget on the backs of the vulnerable elderly population. 

                                    "We should have an independent body set deeming rates for a start, and the second thing is we should have an independent body calculate what the pension is," he said. 

                                    "And it may well be that the pension needs to be different from state to state, depending on things such as the cost of rental housing in cities."