What will you receive?
A one-off lump sum advance
Australian recipients of a Disability Support Pension or a Carer Payment will receive assistance in two ways.
Firstly, a separate Clean Energy Advance will be paid to pensioners. This will amount to $250 for a single pensioner or $190 for each eligible member of a couple.
This payment is designed to cover the costs passed on by those top-500 polluting companies to which the carbon tax will be applied from 1 July 2012. This supplement will cover costs from 1 July 2012 to 20 March 2013 when pension increases will be applied.
It is worth noting that these payments will automatically be implemented by Centrelink of the Department of Veterans’ Affairs, you will not need to claim.
An ongoing increase in the pension
The second benefit is the increased pension rate as mentioned above. This assistance will be delivered as a new, permanent Clean Energy Supplement and will be paid in line with regular pension payments. This equates to an annual increase of up to $338 for a single pensioner and $255 for each eligible member of a couple. This payment will be indexed for CPI so it stays in line with general price increases and will 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 details are up-to-date
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 of the Department of Veterans’ Affairs and can be claimed by the recipient of the DSP or their carer if that is who 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 DSP, 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.