Government cuts pensioners' deeming rates

About one million Australians will receive up to $804 more a year when the government moves to change its income test for pensioners.

Treasurer Josh Frydenberg says the decision to cut deeming rates will cost about $600 million and help about 630,000 pensioners.

"We're strengthening the arm of around one million welfare recipients," he told ABC's Insiders program on Sunday.

Deeming rates are used to estimate how much some pensioners earn on their financial investments, including pensioners and nearly 350,000 people receiving other income-tested payments.