No Age Pension rise in store for September indexation: CPSA

Font Size:

Age pensioners looking forward to the usual 20 September pension increase could be in for a shock, as the Combined Pensioners and Superannuants Association (CPSA) claims there will be no increase to the Age Pension at the next indexation.

This will mark the first time since 1931 that there will be no pension increase, says CPSA.

“Eighty-nine years ago, on 23 July 1931, the Age Pension was reduced from $104 to $91 a year as Australia tried to cope with what would go down in history as the Great Depression,” said CPSA in a statement.

“On 13 October of that year, the annual pension amount was again reduced, this time to $78.

“CPSA was founded in 1931 to fight those pension reductions.”

Since 1931, the Age Pension has been increased every time it was indexed. Pensions are indexed twice a year – on 20 March and 20 September – on the basis of inflation and wages.

While it is almost impossible for the pension to be reduced, it can stay the same.

And according to the CPSA, the pension is not going up at the next pension indexation.

That may mean the current payment rates will remain at $944.30 for singles and $1423.60 for couples combined per fortnight.

While the 20 September rates have not yet been made official, the CPSA believes a simple calculation shows that they will not change.

“The basis for indexation on 20 September will be the Pensioner Beneficiary Cost of Living Index (PBLCI), which is a special inflation rate for pensioners,” says CPSA.

“The PBLCI went up more than the Consumer Price Index (CPI). However, the PBLCI for the June 2020 quarter and the December 2019 quarter are the same: 115.7.

“The Pension Supplement is always indexed according to the CPI, while the Energy Supplement does not get indexed at all. So, both the Pension Supplement and the Energy Supplement stay the same as well.

“All this means that for the first time since 13 October 1931 the overall pension will not be increased.

“The average weekly wage, which is the third indexation option, is not much use these days. By law the single pension must at least be 25 per cent of the average weekly wage, which stands at $1498.20. This means that the average weekly wage must go up by $236.40 to $1734.60 before it becomes relevant to pension indexation again. This might take a while.

“The basic pension at the moment is 27.5 per cent of the average wage.”

The governor of the Reserve Bank of Australia, Philip Lowe, has already stated that the CPI should start to pick up during the September 2020 quarter, which means the Age Pension should also rise at the next indexation on 20 March 2021.

But that may provide little solace for pensioners doing it tough in the midst of a pandemic, including singles with the pension as their sole source of income.

“A lot of people will be quite upset about not getting an increase on 20 September. In the lead-up to any pension indexation in March and September, we get a lot of calls from single full rate pensioners keen to know how much the increase will be,” CPSA policy manager Paul Versteege told YourLifeChoices.

“It has been slim pickings for them for a number of years. Make no mistake, the majority of single full rate pensioners are widows and widowers. Their income dropped 40 per cent when their partner died. Pension poverty continues to be real.”

A spokesperson for Department of Social Services told YourLifeChoices: “No determination has been made for the September indexation.”

Are you surprised that there may be no pension increase on 20 September?

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

RELATED LINKS

Age Pension, deeming rates not realistic: poll finds

Pension and deeming rates must reflect reality, say members

Age Pension ‘generous’, says social services minister

‘It is a generous amount of money that taxpayers make available to older Australians.

Is the Age Pension under pressure?

The future of the Age Pension: Is the family home safe from assets tests?

Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

Contact:
LinkedIn
Email

80 Comments

Total Comments: 80
  1. 0
    0

    “Are you surprised that there may be no pension increase on 20 September?”

    Not at all, we have been conditioned to this possibility for some time as the CPI figures have shown a negative and as the pension is tied, inter alia, to this figure then no increase is an obvious outcome. I must say that the opening comments showing that pensions were actually reduced because of the Great Depression are misleading and may cause some concern. Was there really a need to show that considering that subsequent legislation has ruled out any chance of a reduction in the age pension?

    • 0
      0

      A pedantic correction suggested Horace, social security benefits (including the age pension) are indexed by the Pensioner and Beneficiary Living Cost Index (PBLCI) rather than CPI. Not that it makes any real difference, the CPI dropped 1.9% whereas the PBLCI only dropped 1.4%.

    • 0
      0

      Well, Eddy, if you read my comment again I have said that CPI is only a part of the indexation calculations. The indexation reflects the higher of CPI and a Pensioner and Beneficiary Living Cost Index. This is complicated as there is a minimum combined couples rate of 41.67%of MTAWE (with the singles benefit set at two-thirds of the couple’s rate). Effectively, the benefit is still linked to wages

    • 0
      0

      No, Horace I don’t think think that is right. The indexation reflects the higher of the Pensioner and Beneficiary Living Cost Index (PBLCI) and the MTAWE (Male Total Average Weekly Earnings), rather than the higher of CPI and the Pensioner and Beneficiary Living Cost Index.

  2. 0
    0

    Why am I not surprised? There is money x businesses, asylum seekers, dole bludgers, for Lebanon, and politicians, but not for those who need it the most!

    • 0
      0

      Totally agree. It’s not much but an extra $8-10 helps. Rental assistance needs to be increased. I pay $700 a fortnight

    • 0
      0

      Totally agreed mate is an insult …. ans as always said this Gov. will love to see all of us on a Box ….look Melbourne age care places …wowowow that is the beginning of our elimination like a gas chamber ….wowowowo what a bullshit

    • 0
      0

      Agree, Blinky.
      By the way the cost of Campbells tin can Chunky Beef & Veg thick soup just went up to $3.50 from $1.75, a 100% increase, at Coles. Many other shopping items have had their prices increased. So, watch, the CPI figures will be manipulated to show the lowest cost outcome…for the government and a false report to the public.

    • 0
      0

      Surprise, surprise, you’ve hit the nail right on the head. No money for dedicated true blue Aussie and those who have worked all their lives and paid taxes. Money only for those who contribute nothing to this country and lets not forget the world human termites who have infested these once beautiful country over the past few years.

    • 0
      0

      Surprise, surprise, you’ve hit the nail right on the head. No money for dedicated true blue Aussie and those who have worked all their lives and paid taxes. Money only for those who contribute nothing to this country and lets not forget the world human termites who have infested these once beautiful country over the past few years.

    • 0
      0

      Arvo,your comments are misleading.The soup can that you mention is usually $3.50 but is often on special at $1.75. As are many other products eg soft drinks,crumpets etc etc.I agree that prices are constantly increasing,but its the smaller increases that stay high concern me more (so my wallet tells me).

  3. 0
    0

    can’t complain,as a couple we got $3000,and if you were single got $1500,didn’t expect a pension rise this September

    • 0
      0

      What I am single pensioner where do u get $1500. I suppose the 2 $750. But dole get $500a fortnight every fortnight.

    • 0
      0

      Ueas Thommo wake up …. UR dreaming

    • 0
      0

      Joy Anne, I think his figure refers to the 2x govt stimulus payments totaling $1,500 for single pensioners.

    • 0
      0

      yes, thommo, we did, so maybe we can forgive no rise this time.
      Two of our kids lost their jobs one of which had had the virus. I worried for his mental health as he went into a depression. And, no, they did not get jobkeeper or jobseeker. They have some part time work again now but no pay for a some time.
      I just want us all to come out of this well and happy.
      The priority now is protecting everyone from the virus. There is not much to spend money on anyway apart from the basics.

    • 0
      0

      thommo. You are the perfect example on a stupid OLD non thinking dottery old fool! I have family that I know we will need to support because they’re not eligible for any of the handouts.
      You are typical of the “stuff you” I’m okay mentality that makes many of us sick!

    • 0
      0

      Rubbish Thommo — no way does a single pensioner get $1500 we get $944.30 A FORTHNIGHT1

  4. 0
    0

    Not surprised but gov got money for every country but their own ,absolutely disgraceful world grandstanding at cost of pensioners again.too right Blinky I agree

  5. 0
    0

    The cost of food and all household costs have gone up with Covid , the people receiving Covid payments called Job seeker , etc are receiving more than a pensioner couple , and over $500 p f more than single pension , how’s that reasonable?

    • 0
      0

      Yes it’s not reasonable.

    • 0
      0

      Pixii, you’ve really got your figures very wrong. The couple rate without rent assistance is $1,423.60 ($1,563.20 with rent assistance), the base rate of single Jobseeker (without covid payment) is $565.70 per fortnight.

      The current single Jobseeker (60+) allowance is $1,162 ,which is $218 per fortnight more than what I get on a single DSP, which pays the same as the single age pension.

      This extra $550 will be going down to $250 per fortnight when October comes, which will be around $80 per fortnight less than what I receive.

      So, where do you get these extraordinary figures in your post?

    • 0
      0

      pixii, would you exchange your pension rate for jobseeker permanently? Yep, you might have a win thru to September 24 but after?

  6. 0
    0

    They can’t afford to give pensioners an increase as it is imperative that the wealthy get their income tax cut.

  7. 0
    0

    And will the politicians take a pay cut? Not on your life. How many times this year has Parliament actually sat. Try googling it and you can’t find anything. I bet they’ll still get a nice pay rise snuck through by an “independent tribunal!!” and say thanks everybody like they always do. I’ve been very grateful for the $1500, not that it comes close to paying for my council rates on a very modest 3 bedroom home. I can only see a slippery downhill slope ahead though with all the cash they’ve splashed around on ill-conceived handouts. I know people on JobSeeker and JobKeeper who say they’ve never had it so good. Certainly a lot of people wouldn’t have survived without it but did the Government truly think it through – NO!

  8. 0
    0

    Overheard at my accountants office yesterday Receptionist to listener ” Get a job with the public service, they get a higher super contribution than private companies and if you get made redundant the pay out is better ” And there you have it. A massive public service that needs funding. Nothing left for anyone else including pensioners and the private sector.

  9. 0
    0

    Predictably the whingers will came flocking out at tthe mere thought of no increase. No matter that even earlier this year the derisory cries at the latest increase were as loud as ever, with complaints that the increase wouldn’t even buy a coffee. Frankly, pensioners have been disrupted the least, lives have not changed as much as most others in fact they may even be better off because of the two lots of $750 they have received. That is a minimum $1500 per person. And should it actually happen, the same prediction is that March would see the rise given as normal.

    Surely forgoing what is normally derided as ‘miserly’ for a frw months would not be such a big ask given the extras they have already received.

    • 0
      0

      The anticipated pension increase for Sept 2020 wasn’t going to be more than $6 per fortnight for single pensioners under the Liberal government. Ever, since Tony Abbott won the election the bi-annual pension increases had been halved compared to under Labor’s government payments. So, if there is anything to whinge about it is about the “mother-f#%kers ” in government for their contemptuous treatment of age pensioners. They are no different to the common thieves and corporate fraudsters.

    • 0
      0

      Right on Arvo — absolute magots the lot of them

    • 0
      0

      Arvo, Tony Abbott didn’t change anything. He wanted to have the pension rate tied to the PBLCI only and not to the MTAWE. He sent brochures to pensioners saying that pensions would go up every six months. This was true, but misleading, because he was touting a smaller increase by taking out the MTAWE component. But his legislation did not get through the Parliament, and pensions are still calculated using using both sets of figures. The increases were more under Labor because Julia Gillard increased the MTAWE component to about 28% (single rate) and because of the the introduction of the clean energy supplement in that period. Also perhaps because those were better economic times and both the PBLCI & MTAWE saw greater increases.

  10. 0
    0

    I must admit i get a bit upset at people who complain about not getting a rise, despite receiving the 2x $750each person (ie $3,000 for a couple) already as an extra this year. Anbd moaning about the Government sending A$4m to Lebanon is not going to help anybody ,(Are they aware that Beirut was almost totally blown apart recently and has been the subject of Terrorist strikes many, many, times).I do however agree that our pollies are lining their own pockets for the rest of their comfortable lives without blinking an eye. And i don’t like comments by the Aged Care Minister along the lines of ” the pension is very generous”. To whom?

Load More Comments

FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Entertainment

Jenny Eclair: 'Middle-aged women aren't invisible, they are just ignor

"I've had a lapse back into the menopause today," Jenny Eclair declares at the start of our interview. "I had...

Aged Care

Is your loved one in aged care during the pandemic? Here are seven ideas to make things easier if lockdown strikes again

Many families have faced the stress of having a loved one in aged care during this anxious time of COVID-19....

Health & Ageing

How The Midlife Method author keeps her health on track

In The Midlife Method, food and lifestyle writer Sam Rice explores why it is so much harder to lose weight...

Health

How to … tell if you're oversleeping and what to do

An adult needs between seven-and-a-half to nine hours of sleep each night. If you're consistently sleeping for longer than this...

Community

Hand in hand at London Zoo with a simian friend

YourLifeChoices' 91-year-old columnist Peter Leith recalls an encounter of the simian kind during a visit to London Zoo back in...

Podcast

Retirement Made Simple

In this interview with podcast host John Deeks, the 80-year-old offers pearls of wisdom on all matters retirement: the sea...

Uncategorized

The last blockbuster had an end of summer sleepover

Several months ago, the last Blockbuster store on Earth temporarily rebranded - as an extremely nostalgic Airbnb. A few lucky...

Australia

Best day trips from Melbourne

We've got more reasons than ever to embrace the adventures we can find in our own backyard and, luckily, Victoria...

LOADING MORE ARTICLE...