About five million older Australians will receive a ‘pay rise’ from next week with the twice-yearly indexing of the Age Pension delivering a significant boost.
The 2.1 per cent increase in the pension and other Centrelink benefits is the largest in almost a decade, according to social services minister Anne Ruston.
From 20 March, a full single age pensioner will receive $987.60 a fortnight – an extra $20.10 – while a couple will receive $1488.80 a fortnight – an extra $30.20.
Assets test thresholds will also increase, meaning retirees who were previously ineligible to receive a pension may now be able to receive at least a part pension and part pensioners may be in line to receive additional support.
For single homeowners, the limit has been lifted by $6750 to $599,750; for couples, the limit has increased by $10,000 to $901,500.
Fortnightly maximum rent assistance will increase to $145.80 for singles and up to $193.62 for families and the Jobseeker payment will rise by $13.20 to $629.50 per fortnight for a single person without children.
Senator Ruston said the pension increase was “the largest increase since 2013” and would cost the government an extra $2.2 billion per year.
“This is putting money in the pockets of all Australians who rely on our social security system and, in particular, older Australians,” she said.
However, she conceded that “cost-of-living pressures are real”, with skyrocketing fuel prices driving up inflation.
She said the government used “a specific calculation to increase pensions” that took into account the “actual expenses of senior Australians”.
“It [the calculation] gives a higher weighting to fuel and transport costs in recognition of their significance to pensioners, which helps ensure the rate of the Age Pension maintains senior Australians’ purchasing power.”
With a federal election tipped to be held on 14 May, opposition leader Anthony Albanese was quick to respond to the adequacy of the rate rise, saying it would not keep pace with the rising cost of living and that pensioners were “doing it really tough”.
“This government is so out of touch that they’re prepared to spin out there saying how well off pensioners are going to be,” he said. “When they get to the supermarket to buy products, they find that everything’s gone up.
“The rise in the pension will not keep up with the costs of living.”
He also said the government had failed to acknowledge that the previous biggest rise in 2013 had occurred under a Labor government.
National Seniors Australia chief advocate Ian Henschke said the increase acknowledged rising inflation and living costs, but continued to pressure the government to exempt work income from the income test.
“In Australia, only 2.9 per cent of age pensioners work compared to 24.8 per cent in New Zealand,” he said.
“Pensioners in New Zealand simply work and pay tax without being penalised with the loss of their pension payments.
“Changing the income test would not be a burden on the Budget. Quite the opposite. It would boost GDP and government tax revenue. [Pensioners] would go from being seen as a liability to an asset.”
Mr Henschke also said there was “a desperate need” to focus on Commonwealth Rent Assistance, saying renters were the most likely to be living in pension poverty.
Tribeca Financial CEO Ryan Watson told The Australian that increases in food, fuel and other everyday items meant “a 2 per cent pension increase just simply doesn’t cut it” for many people.
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