Older Aussies howl down adequacy of expected Age Pension increase

Old woman counting her money

Last week, YourLifeChoices ran a story on predicted Age Pension increases for the March indexation and it’s fair to say many of our members had some strong opinions about the forecast. 

To recap, the Age Pension is indexed twice a year, in March and September, based on whichever is higher of the consumer price index (CPI) or the Pensioner and Beneficiary Living Cost Index (PBLCI), a cost-of-living index calculated by the Australian Bureau of Statistics (ABS) specifically for people on welfare payments.

The ABS announced its cost-of-living indexes last week and as a result, expert analysis predicted an increase of just under 2 per cent for the 20 March indexation.

That represents about $18 per fortnight for singles and $27 per fortnight for couples. 

In comparison, in the last indexation on 20 September 2023, the maximum full Age Pension increased by $32.70 per fortnight for a single person and by $24.70 for each member of a couple per fortnight.

YourLifeChoices has previously examined if the CPI is still a good measure of living costs.

We found even the government is ambivalent about the CPI’s accuracy for measuring household costs, saying: “The CPI is often used to measure changes in the cost of living, but it is not an ideal indicator of this.”

Fallen behind

YourLifeChoices member David agreed. 

“CPI is no longer a measure of real cost of living – it hasn’t been near right since changes to its calculation in 1998.

“The ABS has admitted at several inquiries into CPI indexed pensions and how they have fallen behind massively, that the CPI was not a measure of the increase in the cost of living, simply a fudge factor to indicate how the economy is travelling.”

Many YourLifeChoices readers weighed in with their current struggles living on the Age Pension, the cost of living and opinions about the expected increase. 

Reader Steve Quigley simply said the indexation data was “wrong”.

“We own our house, yet our costs are still climbing – insurance, fuel, power, food etc,” Mr Quigley wrote.

“This government is killing our economy. What good are tax cuts to pensioners then we get a pittance of an increase?”

Extreme weather

Mr Quigley has a point about insurance. According to official data, insurance premiums are rising at a rate not seen for two decades on the back of extreme weather events. 

YourLifeChoices member Robert says there might be a simple solution to the issue of indexation not matching reality.

“It is time, in fact, it is now necessary to do away with the Age Pension and replace it with a universal pension,” Robert wrote.

It would seem the increase in the Age Pension isn’t based on the increases that are occurring now. (It), never reflects the reality of the continual rise of the cost of living expenses.

“A universal pension does away with the hardship that most of us now have to endure.”

Reader ‘OzJames70’ also took issue with the expected pension increase.

“Who are these people calculating a 2 per cent increase kidding?” he wrote.

He said his insurance had gone up 50 per cent, grocery items had doubled in price for the same item in three years, increasing fuel and car and home maintenance and health services were “priced beyond reach”.

Readers also took issue with any government relief being quickly negated by price rises. 

Increase in costs

Reader Ronloby says the CPI will never be enough for pensioners. 

“Rent is up 40 per cent, insurance up 25 per cent, fuel is up and down like a yo-yo and food on the table costs, well, who knows?”

Sue Baily said the energy relief allowance and Rent Assistance went nowhere near covering the increase in costs.

“I have a budget that can’t cope with any increase, as I have no ‘wriggle room’. No wonder it’s called the ‘rental squeeze’.”

Are you suffering from a cost-of-living squeeze? How do you think the Age Pension should be indexed?

Also read: How many assets can you have and still be eligible for the Age Pension

Written by Jan Fisher

Accomplished journalist, feature writer and sub-editor with impressive knowledge of the retirement landscape, including retirement income, issues that affect Australians planning and living in retirement, and answering YLC members' Age Pension and Centrelink questions. She has also developed a passion for travel and lifestyle writing and is fast becoming a supermarket savings 'guru'.

25 Comments

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  1. The government simply doesn’t care. If there was any level of care, the pension age would not have increased above 65. I am nearly 66, I am not being considered for employment by advertisers and need to manage on the lower Jobseeker payment while spending some of what I receive to meet mutual obligations. I am sure I am not a solitary occupant in that boat. At the same time millions of dollars appear to be given to fund the war in the Middle East. The government will spend money on anyone but Australians.
    A side note. Many of the people approaching retirement in the next few years will not have the level of super to support them that future generations will have. Compulsory super has not been in existence for all of their working life for many. If people have received super all their work life, it was based on a much lower income at a lower percentage of income.

    • Get where you are coming from. Went through this for years, applying for hundreds of jobs only to be rejected due to age and during this time unable to add to super, so hit pension date with little pension due to most of my working life spent before compulsory super.

    • Many years ago, someone told me that if you are over 50 and find yourself out of work, you may never get a meaningful job again. I was skeptical at the time but, sadly, this has become true for many. Even professionally qualified people can only hope for work as a call centre operator or stacking shelves at Bunnings once you’re in your late 50s or early 60s. This means that for many, by the time they are eligible for the pension, super and savings are badly depleted.

  2. What a pittance. $18 doesn’t cover milk & bread for the fortnight. My car insurance is just this month gone from $43 month to $72 a month for a 2004 little car not worth$3000. The insurance on my transportable home was… last month $59. The company Apia will not insure us anymore and getting quotes have been like anywhere from $150 a month to $250 month …. for an insured amount f $180,000. I’ve been battling to pay these i the last year, let alone the new costs, fuel & food. Outings are non existent & clothes are from fiends or the Op shop ( tripled in prices).
    They sit in their mansions receiving huge salaries plus perks & think it’s ok to “generously ” hand us $18 a fortnight.

    • I recently decided that I can live without a car because I calculated that without the rising cost of fuel, insurance, registration/licence, and servicing I’d save close to $3000 per year. I have free public transport, a bicycle for short trips and if I occasionally use an Uber or have to rent a car, it’s well within my budget.

  3. Council Rates up 5%, Food and groceries up anything from 5% to 60% depending on the item, Insurance, which I no longer can afford so don’t have up another 40%, Fuel costs jump about so hard to say exactly but certainly up, tyres for the car up 30%, beer up 10%, and the CPI is up 2% hahahah lol get real.

  4. When are the government going to realise that people on the pension deserve a decent life we have worked to make sure we would have a decent life but it’s getting to the stage that this is just an absolute joke!! We still have to pay our rent/ mortgage sure our cars/furniture etc but we don’t even get a liveable amount!! Maybe the politicians should try living on our money and not the wages they get plus perks they would never be able to. It’s all a ridiculous cituation that needs fixing immediately for pensions life it’s a sad nasty thing to have to live on a pension sadly!!! N

    • They did in 1908. Successive governments have stolen and misappropriated the funds and are trying to eliminate the aged pension. Meanwhile they have protected their pensions.

    • don’t vote in next election. All pensioners should send a message by not voting for any of them. you don’t have to vote you know but guess what everyone will but not me mate.

  5. Be grateful you live in a country where there is welfare in the form of an age pension for those who for whatever reason need to be on it.
    I’ve travelled to many countries around the world where there is absolutely nothing from the Government for such people.

    • The govt and bureaucrats have absolutely no idea, about the real cost of living, and simply don’t care about pensioners. Time for them to get real, get their snouts out of the trough, and pay pensioners a fair rate, not just a token amount.

  6. it seem sonly the single parents and the unemployed get anywhere near the correct CPI Last increments pensioners received %3.2
    The unemployed %6
    Single parents %15 this has happened 5 times in the last 3 years where pensioners received the lowest payment and the next payments in MARCH is no different
    it looks like the unemployed are being rewarded a further $57 for doing nothing
    single parents are getting over $150 for having children they are too lazy to support and getting rewarded for that
    THISIS BASED ON WHAT I HAVE READ ON THE INTERNET AND FROM CONFIRMATION ON THE LAST INCREASE THAT AMANDA RISHTON WILL NOT ANSWER HER PREJIDUS TO THE AGED PEOPLE OF THIS COUBTRY by not treating all people with the same increases
    After all everyone pays the same bills unless you are unemployed or a single parent who gets subsidised rent DO NOT PAY COUNCIL RATES OR HOUSE INSURANCE
    DO NOT NEED A CAR BECAUSE NON OF THEM ARE DOING ANYTHING FOR SOCIETY OR THEMSELVES EXCEPT TAKING PAYMENTS FOR DOING NOTHING AND HAVING CHILDREN THEY CANNOT AFFORD
    .live with the parent
    share the house with someone else
    t

    • I could find nothing you said that was not true Mitchell, well read all comments and all true. so will say this The government wants all us older people on a age pension DEAD just think how much money they are going to save when we are all DEAD. they wont have to give out our discounts for chemist’s prescriptions’ medical, car Rego and a few more, yep they will save heaps of money, money that we paid our taxes on when we all worked. its going to leave lots more money for the young ones who dont want to work. and yes there is genuine young ones out there looking for work I do know this, but there is a hell of a lot I myself know who are not looking for work and have no intentions of working, and they even have social housing? plus the ones who do have social housing end up with a house full of none workers all on benefits, very cheap rent? so us poor older people are the losers, but wont be long!! we are all struggling to EAT! so will DIE of starvation, make our Government very happy. wont it!!!

  7. I realize that a lot of people are doing it tough, but the super guarantee has been with us for over thirty years now and surely those people must have realized at some stage what the guarantee was for, and that it was never going to be enough to carry you thru retirement and that you were meant to co contribute as well. For the first ten years i was living in NZ so no super but when i came home i hammered it with a vengeance only to find out i now only get half a pension, when those on the same money as me get the full amount even tho they saved nothing themselves.
    I am absolutely sure that admin costs on the aged pension are way above any savings they might make simply giving the same pension to everyone, those that saved would be better off and quite rightly so. With the exception of those with disabilities etc who may need extra consideration.

  8. It becomes abundantly clearer every day that the Government simply does not want seniors around – all the costs of Aged Care, Pensions, Health Care, etc. I am a solo on the Aged Pension and 2 years ago, at age 69, I started a casual job to simply be able to pay the bills, certainly not to live some luxurious lifestyle. But the costs of daily necessities, not luxuries, is just outstripping any income. The so-called work bonus has proved to be a stunt – it is clearly promoted as ‘yearly’ – NOT so. When I started my job, I received the maximum bonus – when that was eaten up, my pension immediately began to decrease. It is NOT per calendar year. It is NOT per financial year. It is NOT annual upon your commencement date. I was told it would only start accruing if I WASN’T working. So I’m giving up my little job. Back to living really in poverty.
    My only saving grace is that I own my own home – small, but comfortable, suits me, most certainly would not suit the current crop of youngies. Whilst I was working permanently, I put as much money into home maintenance and requirements as I could, so I do have minimal maintenance, thank heavens. I have bought an e-trike that has been an absolute saver. I live 2kms from the shops, so I use this, more than my car (which I need to keep). Insurances are just a rort – my car renewal wanted an increase of 122%, house was 68%. So I had to hunt around to get better, which is now an annual occurrence. Insurances and rates eat up nearly half my pension alone. I live in a very low risk area, but still, premiums rise due to ‘world wide disaster events’. Why should my insurance increase due to people who whose to buy homes on flood plains?
    $18 a fortnight increase is laughable.

  9. We are now paying over $40,000 a year in rent. Why do we not find somewhere else ? Because nothing else exists. We hardly use the aircon and lights are all power reduction bulbs. Luckily we don’t each much. At some stage my super will exhaust then we are in a big hole.

  10. As a journalist maybe you can find out from AMANDA RISHTON why she is looking after single parents better than people who actually worked all their lives and in my case 56 years which included 9 years in the defence force WHY HAS SHE AND THE PERSON BEFORE HER PUT DOLE PEOPLE AND SINGLE PARENTS AHEAD OF PENSIONERS AND CARERS AND THE DISABLED
    The last increases in welfare for the 5th time in a row saw pensioners get %3.2 while unemployed got %6 and single parents got %15
    I MIGHT ALSO TELL YOU THAT ACCORDING TO STATISTICS %92 of single parents are female and %8 are other WHY ARE THE ELDERLY DISCRIMINATED AGAINST
    I am sure if politicians pay rates left people out of the pay rises their would be angry politicians especially if the reason was that only polititians that do not lie will be the only ones getting the pay rise
    THEN NONE OF THEM WOULD GET A PAY RISE.

  11. no but i would be getting a job instead of jobseeker but as i am in my seventies that is not possible IF I had a choice i would spread my legs and go on a su=ingle parents pension where i would not have to work for 14 years per child and get paid more than pensioers who deserve to be treated at leasr=t the same if not better ‘
    AFTER ALL I WORKED AND PAID TAXES FOR 55 YEARS
    HOW MANY SINGLE PARENTS CAN SAY THAT
    THE UNEMPLOYED SHOULD NOT BE REWARDED WITH HIGHER BENEFITS EVERY 6 MONTHS MORE THAN PENSIONERS BECAUSE THEY {THE PROFFESSIONAL BLUDGERS]HAVE CONTRIBUTED NOTHING TO SOCIETY TO DESERVE HIGHER INCREASES THAN PENSIONERS
    CENTRELINC SHOULD INVESTGATE HOW MANY OF BOTH THE UNEMPLOYED AND SINGLE PARENTS SHARE COSTS WITH LIVE IN BOARDERS AND FATHERS OR MOTHERS OF CHILGREN ON PENSIONS

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