Older Australians to receive $8.40 pension increase from March 20

The rates for 2.6 million age pensioners as well as 750,000 people on the disability support pension and 295,000 carer payment recipients will increase by $8.40 a fortnight to $952.70 for singles, and $12.60 a fortnight to $1,436.20 for couples combined. These rates include pension supplement and energy supplement.

In addition the base rates for the 1.4 million people on jobseeker payment and 244,000 parenting payment single recipients will also increase.

The rate for jobseeker payment for recipients aged 22 and over without children will increase by $5.10 a fortnight to $579.60 for singles, and $4.60 a fortnight to $523.30 for each member of a couple including the energy supplement.

Rent assistance has also increased slightly and there are increases to a range of income and assets test limits. Read more here.

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Families and Social Services Minister Anne Ruston said that the increases would help recipients keep up with changes in living costs.

"Indexation is one of the regular mechanisms we have built in to our social security safety net to make sure rates reflect the prices payment recipients see at the supermarket and at the bowser," Ms Ruston said.

Pensions and allowances are traditionally adjusted in March and September and are linked to the higher of either the Consumer Price Index which measures changes in the prices paid for a fixed basket of goods and services, or the Pensioner and Beneficiary Living Cost Index - which measures the effect of price changes on the out-of-pocket living expenses of households whose main source of income is government payments. They are then benchmarked against the Male Total Average Weekly Earnings.

Pensions last rose in March 2020 by $10.20 per fortnight for singles and $7.70 for each member of a couple excluding supplements.

There was no increase in September as the pandemic had decimated the economy in the six months prior with consumer prices falling by 1.9 per cent in the June quarter, taking annual inflation to minus 0.3 per cent.

Many pensioners will already this month have received their final $250 economic support payment in their bank accounts introduced by the government to stimulate the economy during the pandemic.

Seniors' advocacy groups have been lobbying for an overall increase in the age pension for some time, citing the high rate of pension poverty - it is estimated that one-in-three over-65s live below the poverty line.

The Retirement Income Review report released in November noted many retirees, in particular those who rent, are in severe financial stress.

The age pension has become a prime target for federal budget savings, with an ageing population and the overall cost used to justify cutting the number of people receiving the pension.

The age at which people can receive a pension has been steadily increasing to its current 66 years and will increase in July 2021 to 66 years and six months and to 67 years in July 2023.

Many part-pensioners have also lost access to the welfare payments due to changes to assets tests, while others have become ineligible for a pensioner concession card.

Combined Pensioners and Superannuants spokesman Paul Versteege said "Pension indexation of the Age Pension and JobSeeker has produced a small increase in March. It won't be until wages start to go up strongly that we can expect more substantial pension rises."