More than 1 million Australians will benefit from a multimillion-dollar boost across the next four years after a decision to cut deeming rates.

The changes will benefit about 628,000 age pensioners and more than 455,000 people receiving other payments, and are on top of sweeping tax reforms already passed by the Government.

Under the new rates age pensioners whose income is assessed using deeming will receive up to $40.50 a fortnight for couples, $1053 extra a year, and $31 a fortnight for singles, $804 a year.

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

The lower deeming rate will decrease from 1.75 per cent to 1.0 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 3.0 per cent for balances over these amounts.

This decision to put more money into the pockets of our seniors stands in stark contrast to policies the Labor Party took to the last election, which would have seen more money ripped away from seniors.

The Government has taken a sensible approach to supporting older Australians because we understand that pensioners have finely balanced finances. It will mean more money in the pockets of older Australians.

Only our Federal Government listens to and acts on the reasonable concerns expressed by older Australians who receive a part pension. 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.

Changes to the deeming rate will also benefit people receiving other income-tested payments including the Disability Support Pension and Carer Payment, and income support allowances and supplements such as the Parenting Payment and Newstart.