Pension increase as inflation bites
While pensioners will welcome the increase to the pension on 20 March, is this being applied often enough when inflation is running wild?
Key Points
- An increase to the Age Pension and other payments comes into effect 20 March 2023.
- National Seniors calls for the Age Pension to be adjusted every three months instead of six.
- We also continue to call for a fairer system that lets pensioners work without being financially penalised.
From 20 March 2023, the maximum rate of the single age pension will rise by $37.50 per fortnight, taking the single age pension from $1026.50 to $1064. For couples, the pension will increase by $56.40 per fortnight (taking their payment from $1547.60 to $1604).
Among other increases, the maximum rate of Commonwealth Rent Assistance for a single person without children will increase by $5.60 to $157.20 fortnight. JobSeeker, Parenting and ABSTUDY payments have also gone up, and some income and asset limits may change due to indexation.
The announcement is welcome relief, with regular indexation being a key means of ensuring income keeps up with rising living costs.
In welcoming the latest increase, National Seniors Australia has called for the system to be adapted to ensure pensioners are even better able to cope with periods of high inflation.
National Seniors Chief Advocate Ian Henschke said, “for pensioners struggling to cover necessities such as food, fuel, and electricity, how often is as important as how much”.
“Under the current system, pensions are adjusted every six months – in March and September – but this leaves recipients playing a costly game of catch-up when inflation is unusually high.”
“Pensioners will welcome the increase yet rightly worry there won’t be another rise in payment until September. They’ll have to wait six months and then play catch-up again.”
“Ideally, the Federal Government should index the pension every three months during times of high inflation to help those most vulnerable.”
“It is critical during times of high inflation that we adjust four times a year instead of two.”
National Seniors is also calling for a two-year trial for pensioners who want to work or are already working and want to increase their hours and income without penalty.
“We need a New Zealand-style system that eliminates Centrelink reporting and requires pensioners to pay an agreed rate of income tax,” Mr Henschke said.
“It's simple, fair, will help solve critical workforce shortages and boost the budget bottom line.”
“We will continue to fight for a system that improves people's lives. In our budget submission we have called on the government to index the pension quarterly during times of high inflation and to let pensioners work.”
“Both measures will boost confidence in the retirement system and grow the economy.”
