Around five million Australians will receive an increase in welfare payments from tomorrow. It’s the biggest pension indexation increase in 12 years.
While some are pleased with the increase, others say it’s a “drop in the ocean” following months of interest rate hikes, the highest inflation increases in decades and rising energy prices.
Age Pension rates from 20 September
From 20 September, singles’ maximum rate of pension will increase to $1026.50 a fortnight. Couples will receive $773.80 each, or $1547.60 for both.
That’s an increase of $38.90 per fortnight for singles and $58.80 for couples.
The Australia Institute senior economist Matt Grudnoff, who is also the co-author of the YourLifeChoices quarterly Retirement Affordability Index, suggests the pension increase provides false security.
Read: How to reapply for the Age Pension
“The large increase in the Age Pension is just compensating people for the higher prices of the things they buy,” he told YourLifeChoices.
“While it might be a big increase in the dollar value of the pension, it is not a big increase in its real value. It is not necessarily making pensioners better off.”
Pensioners can now also earn extra income without losing benefits
Age pensioners, veterans and disability pensioners will also be able to earn an extra $4000 a year without losing their benefits.
Up to $300 per fortnight is now exempt from the pension income test. That means they can earn up to $11,800 before penalties kick in – up from $7800 per year.
Around 450,000 pensioners could benefit. However, the measure is temporary and is set to end on 30 June 2023.
Read: Why the Age Pension is not keeping up
Pensioners not the only ones to ‘benefit’
JobSeeker payments and rent assistance will also get a boost. Increases to welfare payments, overall, will be the biggest in 30 years.
The indexation increase for JobSeeker ends up being less than $2 a day, rising from $46 to $48 per day.
“This leaves it well below the poverty line,” said Edwina MacDonald, acting chief executive for the Australian Council of Social Services (ACOSS).
How do real-life retirees feel about the pension increase?
While the pension increase will help ease some of the cost-of-living burden on older Aussies, the rate of payment is still playing catch-up with inflation.
“All I can say is that the current rate of inflation for every conceivable item and/or service available in Australia continues to climb, and so additional financial pressure keeps mounting up on our already struggling population, leading us towards the inevitable further lowering of our living standards,” said one YourLifeChoices member.
“It must be recognised that living expenses for those on fixed incomes like JobSeeker, and Disability and Age Pension, continue to be left behind.”
Read: Pension Supplement explained
The increase of 4 per cent is nowhere near enough to cover the cost of insurance and medical bills, says member SuzyQ.
“I just received my house/contents insurance renewal – [it] has gone up 16 per cent. My health insurance – up 7.5 per cent. Car insurance – up 12 per cent,” she said.
Another member, David Chapman, has a solution.
“The pension should be equivalent to the basic casual wage,” he said.
“Currently, that’s around $28 per hour. Paid at 38 hours per week (standard weekly working hours), that would be around $1064 per week for an individual, with no reduction for couples living together.
“This would alleviate much of the burden on pensioners’ cost of living. Otherwise, permit them to work as much as they like and earn as much as they can while making the pension tax-free.”
How would you ‘fix’ the pension? Is it enough to make ends meet? Why not share your opinion in the comments section below?
Totally agree with David Chapman’s idea – $28 per hour for 38 hours a week – HOWEVER – that would definitely raise the total payment by Government by double – and send the budget into spiral!! This extra $15 per fortnight payment to be received on the 20th September – is ridiculous! Fuel, food, insurance and rents, have all spiralled out of control, and with a fixed income – pensioners and those receiving the payments – CANNOT CATCH UP AT ALL AND SLIDE FURTHER INTO THE ABYSS!!
Just by allowing pensioners to work as much as they want, and earn whatever they can earn – would take a huge amount of pressure off the Federal budget! I know that Labor, Albanese, Bowen and the rest of the clowns don’t understand how a budget works, or how that would ease the Pension payments every fortnight, as it is too easy!!
Hi Peter, Great idea allowing pensioners to work to get extra dollars – but, how many people are prepared to employ an 82 year old ? not too many – believe me, so, us OLDIES are left behind – again. We understand that at our age we should be well in front, however – we didn’t get super to start our life off, but, we are comfortable – but that is all. No more trips away, just stay home and vegetate – anyone feel sorry for us? nope – didn’t think so.
It’s simple but the fat cats , the bureaucrats and the swasi economists at Centrelink will do nothing because they are operating on a formula constructed 60 years ago and added to like a house with illegal renovations carried out like a child with a mecano set.
This is how you do it.
Wipe the married pension, it is a joke and a disgrace and discrimatory against people in a relationship.
We should ask why the hell should being in a relationship be any different than any amount of people living together not in a relationship?
One pension, a single pension.
This gets rid of duplicity and simplifies the whole pension system.
Earnings should be treated the same as a wage and be tax free up and to the tax threshold when earning begins attracting tax and yes it should include your pension income, that is only fair.
Why have all these rules and crack head ideas because the government decides in some way because you receive a benefit you are some how regarded as an alien from another planet.
If I had the money I would take the government and Centrelink to court and fight their mindless aborrations to the death.
As I have posted before this increase still leaves pensioners behind the inflated living costs most of us are experiencing.
Couples fare particularly badly as we are discriminated against by being paid much less than a single person. The pension should be the same for everyone. Living arrangements should not be a factor.
i agree as there is nothing to stop 2 or more pensioners living in a shared house splitting bills etc ; know of family members who do this so i also know some who divorced legaly and then shared accommodation the wife lives under her maiden name being legal keeps social security scrutinising ;but they shouldnt need to do this as like single people they worked and paid taxes all their lives
If the pension rise is less than inflation, it will make very little difference to the average pensioner. Smoke and mirrors will not fool the aged. We know all the political cons. Time for a pensioners political voting block, the only way governments will take any notice.
It’s simple but the fat cats , the bureaucrats and the swasi economists at Centrelink will do nothing because they are operating on a formula constructed 60 years ago and added to like a house with illegal renovations carried out like a child with a mecano set.
This is how you do it.
Wipe the married pension, it is a joke and a disgrace and discrimatory against people in a relationship.
We should ask why the hell should being in a relationship be any different than any amount of people living together not in a relationship?
One pension, a single pension.
This gets rid of duplicity and simplifies the whole pension system.
Earnings should be treated the same as a wage and be tax free up and to the tax threshold when earning begins attracting tax and yes it should include your pension income, that is only fair.
Why have all these rules and crack head ideas because the government decides in some way because you receive a benefit you are some how regarded as an alien from another planet.
If I had the money I would take the government and Centrelink to court and fight their mindless aborrations to the death.
The whole thing is a scam. Politicians have had the answers given to them over and over, but keep reducing the livability for older Australians. It is clearly the plan to get rid of the old, the unwell, the ‘unproductive’ and push the money tied up in older Australian’s assets back into circulation. Dictators do this, but it shouldn’t be what we expect in Australia.