The latest Consumer Price Index (CPI) figures for the June quarter indicate the Age Pension rate should increase by at least 2.2 per cent in the September indexation.
The CPI recorded a drop this quarter, with the nation’s headline inflation rate dropping from 7 to 6 per cent. This is good news for consumer prices and cost of living. However, it implies the 20 September 2023 Age Pension increase may be smaller than anticipated.
For a single pensioner, a 2.2 per cent increase denotes a rise of $23 per fortnight for a total of $1087. For couples, the increase would be $35, totalling $1639 per fortnight.
This would be a considerable drop in the rate of increase, down from 3.7 per cent in March – a rate deemed inadequate by advocates and economists.
The Combined Pensioners and Superannuants Association (CPSA) says the likely increase reflects an ongoing downward trend.
“The rate of inflation is now trending down. This will inevitably mean that pension increases after the September 2023 indexation will be smaller,” the CPSA says.
“While that may seem like bad news, it also means that prices will not have been increasing as much as they have been.”
The Age Pension, along with other government payments, are indexed twice per year on 20 March and 20 September.
The final rate of indexation for the Age Pension is not yet finalised, but will be announced in the next month.
Minister for social services Amanda Rishworth, told the ABC’s Insiders program the September increase would likely be the final cost-of-living relief measure implemented this year.
“The changes we’re making – whether it’s to Rent Assistance, JobSeeker – are structural changes,” she said.
“They’re ongoing increases that will be applied. So when you talk about the surplus from last year, that’s a very different circumstance to the reforms that we’ve made which are ongoing and structural.
“We have calibrated these to be responsible to help people who are doing it tough.”
How is Age Pension indexation calculated?
The Age Pension is adjusted in line with inflation twice each year, in March and September.
The rate of increase is based on three figures: the CPI, the Pensioner and Beneficiary Living Cost Increase (PBLCI) and the Male Total Average Weekly Earnings (MTAWE).
The CPI is a measure of the increase in price of a general ‘basket’ of goods and services that the average household regularly purchases.
The PBLCI works in a similar way, but the basket of goods has been selected to be more representative of what somebody living on the pension would be buying.
At indexation time, Centrelink compares the CPI and the PBLCI, then applies whichever yields the highest pension increase.
The rate is then compared to the MTAWE and adjusted to ensure that rates don’t fall behind community living standards.
Do you think a 2.2 per cent increase is enough? Or should the government be doing more to help older Aussies doing it tough? Let us know what you think in the comments section below.
Also read: Is Age Pension indexation about to go monthly?
I don’t think 2.2% is anywhere near enough increase on our Age Pension, after years of price increases, basic life living rent food petrol etc. price increases mortgage interest rates increases. I think we need a lot more to catch up with all these increases. I am very grateful for Age pension but our needs are not enough to survive.
makes me mad, most of us have worked and paid taxes to get a lousy $23 pf. while jobseekers some have never worked in their life are going to get $50 or more
I am not happy with that. I have disabled partner and we are still paying a mortgage.I am his carer.I have to work two days a week. When I report my income to Centrelink they took money from my partner. And I don’t know what to do? I hope it will be good to have rules if an old person is working. I am 72 years old, do not take money from my partner.
But don’t forget Albo said he would look after the pensioners when he got into government, and yet they haven’t got 1 cent more than they would have if there hadn’t been a change of government. If anything, they have tightened up the eligibility rules for getting the pension.
Is obvious that the Gov. wants us to be so dependable of the system that throw peanuts to keep us in anguish. inflation will go down but goods prices are not, two weeks ago I purchased Wollies brand cherios at $2.60 for 500 grs a week later it cost $2.90 and today is $3.00 and other products as well went up so if the inflation is going down how is that the prices keep going up? I don’t know what indicators or variables they used to say the inflation is down when the prices keep going up. Pensioners are victims of discrimination because of their age, for said just one reason, please don’t look on the other side or don’t be a blind eye in this case.
Pensioners will better off if they received each person not matter if is single or couple the same rate, because couples expend double of their needs, the only probably will be the rent but, the rest is always double the costs instead of one shower is two showers, instead of one cup of rice is two cups of rice, instead of two slices of bread is 4 slice of bread, etc, etc. Pensioners cannot be in the same considerations as the other recipients, we are in disadvantage. $1000 each a fortnight regardless of if you are single or couple will give these people a better quality of life.
If the government wanted to give all pensioners a ‘real’ increase in pension rates, then the paltry 41.76% of Male Total Average Weekly Earnings should be ‘increased’ to at least 50%, and the single rate would be able to stay the same at 66.33% of the couple rate, which makes the actual percentage around 27.7%, which makes we singles the lowest paid anywhere in this country, not including those on Job Seeker.
Yes, it’s too low, and doesn’t take into account that rental assistance if you are eligible for it is not a realistic amount, never mind all the other costs which still seem to be increasing.
I would like the pensions to be indexed quarterly.
We always miss out of 9 months of inflation before we get a rise.
CPI calculation Jan 1 to June 30 and then we wait nearly 3 months (Sept 20) before we get it.
Quarterly calculations are easily done.
Jan 1 to Mar 31 get the rise first pay in April.
April 1 to June 30 get the rise first pay in July.
July 1 to Sept 30 get the rise first pay in October.
Oct 1 to Dec 31 get the rise first pay in January.
If there is no rise or loss in the Cpi the pension stays the same.
We would all be better off but still behind but it is better than waiting nine months.
In the last 12 months rents has risen anything from 15-30% depending on your demographics with many unfortunate souls having their leases terminated or not being offered another lease. Woolies basic bread has gone from $1.60 to $2.70 Aldi 750 ml. virgin olive oil has risen $4.95 to $7.29 weet bix large has risen $5 to $6 while milk has remained stable (because dairy farmers are so screwed) the cost of cheeses and spreads are basically off the menu. Have you bought vegemite or peanut butter lately ? get ready to recalibrate the budget. On the top of all that the price of 91 unleaded has jumped 40% condeming most pensioners to find something else to do on weekends going for a drive is now kinda like an after thought. Most Politicians and high earning bureaucrats are immune to these sort of cost of living increases. 2.2% ? I think I would offer it back to them as a gift.
It makes no sense – they say that they that they measure the increase against what pensioner’s mostly buy??? Well it’s sure as hell a lot more than 2.2%
We buy fuel/ food/ clothes/ eat out – and we definitely use the health system a lot more. None of those are sitting at 2.2% more like 10%.
It’s really quite insulting to say that! – much better to say the truth, which is “this is what we think we can get away with!”
A bit if honesty even if if it’s not going to be what we want to hear would be refreshing.
Nobody believes the smoke and mirrors anymore and it just serves to increase the divide between government and it’s people!