Age Pension and supplements set to increase this month

More than five million Australians have received welcome news with an increase to their social security payments from 20 March when indexation takes effect.

The increases are welcome news after the government decreed that there would be no increase in September due to the pandemic. It was the first time in 23 years that the twice-yearly indexation was abandoned.

Minister for families and social services Anne Ruston said the March increases would help recipients keep up with changes in living costs, although key voices including National Senior and the Australian Council of Social Service (ACOSS) beg to differ.

“Indexation is one of the regular mechanisms we have built into our social security safety net to make sure rates reflect the prices payment recipients see at the supermarket and at the bowser,” said Senator Ruston.

Read more: Calls for deeming rate cuts

The increase comes on top of the additional support the federal government has provided through the pandemic, with $250 stimulus payments being delivered this month to age pensioners and other welfare recipients who qualify.

“The fourth and final Economic Support Payment started being paid on 1 March – delivering an extra $250 to over five million Australians,” Senator Ruston said.

“For pensioners alone, those four payments over the last 12 months total $7 billion.

“Between these Economic Support Payments and the latest indexation, we are delivering more support to Australians who need it most.”

Read more: Older Aussies falling through the cracks

The rates for 2.6 million age pensioners as well as 750,000 people on the Disability Support Pension and 295,000 Carer Payment recipients will increase by $8.40 a fortnight to $952.70 for singles, and $12.60 a fortnight to $1436.20 for couples combined. These rates include the Pension Supplement and Energy Supplement, which are payable to all pensioners in Australia.

In addition, the base rates for the 1.4 million JobSeeker Payment recipients and 244,000 Parenting Payment Single recipients will also increase.

The rate for the JobSeeker Payment for recipients aged 22 and over without children will increase by $5.10 a fortnight to $579.60 for singles, and $4.60 a fortnight to $523.30 for each member of a couple including the Energy Supplement.

Rent Assistance and other supplementary payments will also increase. In addition, increases to a range of income and assets test limits mean that recipients will be able to have higher income and assets before their payment is affected.

Read more: Government toying with major reform to Centrelink payments

Pending the passage of legislation, the rate of JobSeeker Payment, Parenting Payment and other working age payments will increase again on 1 April 2021, boosting the rate by an extra $50 a fortnight.

ACOSS says the rate is still inadequate and is lobbying senators to amend a bill before parliament to be more generous.

National Seniors’ chief advocate Ian Henschke also says the pension increase is not sufficient.

“This increase is not enough to fix pension poverty for those who are renting,” he said.

“About one in four Australians who are on the pension don’t own their own home and about one in four pensioners live in poverty.

“That’s why, when we set a hot housing market and an overheated rental market around Australia, a small increase to the pension is not going to help those people who are renting.”

Full details of the new Age Pension rates and thresholds will be available in our afternoon eNews.

Are you satisfied with the adjusted rates? Will the increase make a meaningful difference for your standard of living?

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Janelle Ward
Janelle Ward
Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.
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