Key points
Rising inflation will see a dramatic increase in government payments, affecting 4.7 million Australians, more than half of which are pensioners.
The maximum rate for the single Aged Pension will increase by $38.90 per fortnight. For couples, it will increase by $58.80.
With ongoing inflation expected, there is a question of whether the increases are frequent enough.
Age pensioners are set to receive the largest indexation rise in 12 years to help ease the rising cost of living pressures.
From 20 September, the maximum rate of the single-age pension will increase by $38.90 per fortnight from $987.60 to $1026.50.
For couples, the pension will increase by $58.80 per fortnight, taking their payment from $1488.80 to $1547.60 combined.
Payments will also increase for other payment recipients.
The Disability Support Pension and Carer Payment will also rise by $38.90 a fortnight for singles and $58.80 a fortnight for couples.
Some income and asset limits will also change due to indexation to ensure people are not disadvantaged.
The new figures, which include the pension and energy supplements, are set to benefit more than 4.7 million Australians, including those on JobSeeker Payment, Parenting Payment and ABSTUDY allowances.
They follow the Federal Government’s announcement at the Jobs and Skills Summit that recipients of the Age Pension and Service Pension would be able to earn up to $4000 this financial year without losing any payment.
Social Services Minister Amanda Rishworth said it was the biggest indexation increase in 12 years for pensioners and more than 30 years for those receiving allowances.
The increase comes as inflation continues to track rapidly upwards.
This year, inflation rose 1.8 per cent in the June quarter and 6.1 per cent annually, according to the Australian Bureau of Statistics.
³Ô¹ÏÍøÕ¾ Seniors Australia welcomes the new payment rates that will take effect from 20 September 2022.
Given how quickly living costs are increasing, the government should consider indexing pension payments more frequently.
Indexation only occurs twice a year, on 20 March and 20 September. But there is a valid argument for a trigger that allows the government to increase pensions in June or December if CPI is unusually high.
“Waiting for a pension increase when living costs have been high for six months doesn’t make a lot of economic sense,” said ³Ô¹ÏÍøÕ¾ Seniors, Chief Advocate Ian Henschke. “Government should ensure that pensioners and other social security payment recipients are not being left behind because indexation is applied too infrequently.”
“We would like to see the government consider the idea of indexing payments in June or December when inflation is extremely high.” Mr Henschke said.
