If the treasury modelling is correct, and prices rise by 0.7 percent, with a supplement of 1.7 percent you should have an extra three or four dollars in your pocket each week, starting July 2012. But there is one reason why this may not happen.
What will you receive?
A one-off lump sum advance
Australian recipients of the pension will receive assistance in two ways.
Firstly, as an upfront payment, called a Clean Energy Advance, delivered during May and June 2012.
This is a one-off payment of $250 for singles and $190 for each eligible couple member, to recipients of the full – and part - pension.
It is designed to assist with extra costs which will be applied by the top-500 polluting companies from July1 2012. It is a supplement to cover the costs from July1 2012 to March 2013 when increased pension rates will apply.
You do not have to apply for this advance – you will receive it automatically if your contact details are up to date.
An ongoing increase in the pension
The second benefit is the increased pension rate as mentioned above. This is assistance which equals a 1.7 per cent increase - $338 for singles and $255 for each eligible member of a couple – per year. This increase is called a Clean Energy Supplement and will be paid from 20 March 2013. It will be indexed for CPI so it stays in line with general price increases. It is to be paid in addition to the existing Pension Supplement.
As with the advance, you do not have to apply for this increase – you will receive it automatically if your contact details are up to date.
Veterans will receive assistance through service pensions and other payments such as disability pensions and war widow/widower pensions.
For those with higher energy bills due to a reliance on medical equipment, an Annual Essential Medical Equipment Payment of $140 can also be claimed. This will be paid through Centrelink or the Department of Veterans’ Affairs and can be claimed by whoever incurs the cost.
To be eligible, you must meet the relevant medical criteria and hold a relevant concession card.
This payment must be claimed for and will not automatically be paid.
What extra costs can you expect?
Prices are expected to rise by about 0.7 per cent, starting July 1 2012. For those on a single Age Pension, this means about $270 per year. This is to be covered by the $338 supplement (and advance for the first nine months).
Will you be better off?
If the treasury modelling is correct, and prices rise by 0.7 percent, with a supplement of 1.7 percent you should have an extra three or four dollars in your pocket each week, starting July 2012.
But there is one reason why this may not happen.
Most pensioner households spend a higher percentage of their income (2.6 per cent compared to 1.7 per cent for working families) on the things that will be affected the most – their power bills. So how much better of you will be really depends upon how much of your income goes on power.
What no government or financial modeller can predict is variables such as floods or drought and external economic factors, such as oil prices, wars and terrorist attacks, which all can have a huge affect on the prices of goods and services in Australia. The fact that the supplement is indexed for CPI should go some way toward nullifying major price hikes.
To find more about your individual situation, visit the Federal Government’s online estimator at www.cleanenergyfuture.gov.au.
Or ask us your question – as always, we are here to help.
Download this article as a PDF
- The Carbon Tax: What’s in it for aged care residents
- The Carbon Tax: What’s in it for carers and people with disability
- The Carbon Tax: What’s in it for self-funded retirees
- Carbon tax explained
Join YOURLifeChoices, it’s free
- Receive our daily enewsletter
- Enter competitions
- Comment on articles