Pension increase back on track…?

The fortnightly Age Pension payment will increase on 20 March 2021. How much will it be and is it enough?

Key Points

  • The fortnightly base rate for the aged pension will rise by $8.40 for singles to $952.70, and by $12.60 for couples to $1,436.20
  • Pensioners alone received $7 billion in stimulus payments over the past 12 months
  • The number of renters will likely increase, with home ownership among 65+ set to drop to 57% by 2056

Last September there was much consternation and disbelief from pensioners when the regular indexation of pension payments yielded a big zero.

With inflation and wages growth flatlining in response to the economic crisis brought by COVID-19, there was no increase in the pension, despite the cost of some essentials continuing to rise.

Fast forward to March 2021 and it would appear inflation and pensions are back on track for an increase. A relief to many concerned about the quality of their lives in retirement.

Chief Advocate Ian Henschke, explains our take on why the pension increase is not enough for those who rent on 9 News

How much are we talking?

The fortnightly base rate for the aged pension will rise by $8.40 for singles to $952.70, and by $12.60 for couples to $1,436.20. These rates include Pension Supplement and Energy Supplement which are payable to all pensioners in Australia.

It comes as the last $250 stimulus payment is due to drop into the bank accounts of five million Australians from March as part of the Federal Government's Economic Support program. According to Social Services Minister Senator Anne Rushton, "For pensioners alone those four payments over the last 12 months total $7 billion."

Many have used the extra money to purchase much needed goods and services, helping to keep the economy rolling and supporting a better standard of living.

The increase in the pension will be no different and this extra is welcomed.

Is it enough?

As the peak consumer body representing older Australians, National Seniors is acutely aware of the sentiments of older people.

You tell us time and again that the pension is not adequate.

That’s why we continue to call for an Independent Pension Tribunal to set the pension rate as part of our Fix Pension Poverty campaign.

It’s also why we continue to call for an increase in rent assistance, and have done so as part of our 2021 budget submission.

We know that renters are the ones doing it hardest. The final report from the Retirement Income Review made it clear that renters did not receive enough income to meet an acceptable standard of living.

The big issue is the ongoing cost of renting, which undermines capacity to purchase other essential goods and services. With a lack of affordable rental housing, including private, public and community housing, some older people will live in poverty.

In a country as wealthy as Australia, that seems wrong.

The idea that most older renters are bludgers, who haven’t worked hard enough to purchase their own home, needs to be challenged here. It's simply not true and is going to be a growing phenomenon in the future as house prices spiral upwards and home ownership rates tumble downwards.

Evidence suggests that home ownership will drop dramatically in the future. Grattan Institute modelling estimates the share of over 65s who own their home will fall from 76% today to 57% by 2056.

With home ownership crucial to wellbeing in retirement, that’s a real worry.

It’s another reason why we are also calling for better housing for older Australians, including stamp duty concessions for seniors and basic accessibility design features in new housing.

Join us to help our efforts.