Age pension payments set to rise, but is it enough?

The Federal Government announced this week that 5 million Australians will benefit from the largest increase in social security payments in almost a decade as the cost of living skyrockets.

Although the move was welcomed by some, is it enough to cover the rising cost of living, and will those on the age pension be any better off following the payment increase?

Under the announcement, those receiving the Age Pension, Disability Support Pension and Carer Payment will, from March 20, receive an extra $20.10 a fortnight for singles to $987.60 and by $30.20 a fortnight for couples combined to $1,488.80. Asset test limits have also been increased which will allow more senior Australians to access a part pension.

Minister for Families and Social Services Anne Ruston said the increase was “the largest increase since 2013.”

“Pensioners will see a 2.1 per cent increase to their payments,” she said.

“This is putting money in the pockets of all Australians who rely on our social security system and, in particular, older Australians,” she said.

Senator Ruston said the increases had taken into account “the actual expenses of senior Australians.”

“It gives us a higher weighting to fuel and transport costs in recognition of their significance to pensioners, which helps ensure the rate of the age pension maintains senior Australians’ purchasing power in the economy,” she said.

Almost 5 million Australians will benefit from a boost to their social security payments from 20 March to help them keep up with the changes in the cost of living. Pensioners will see a 2.1 per cent increase to their payments from 20 May – the largest increase since 2013. pic.twitter.com/FsY0DZxenc

— Anne Ruston (@Anne_Ruston) March 14, 2022

Although millions of Australians are set to have a little extra money in their pocket, Opposition Leader Anthony Albanese slammed the announcement, telling reporters “the rise in the pension will not keep up with the costs of living.”

“This government is so out of touch that they’re prepared to spin out there saying how well pensioners are going to be off,” he said.

“When they get to the supermarket to buy products they find that everything‘s gone up.

“Pensioners are doing it really tough at the moment.”

Labor has a plan for cheaper child care, cheaper power bills and more secure, well-paid jobs. pic.twitter.com/QmzidtVDz1

— Anthony Albanese (@AlboMP) March 16, 2022

Our Starts at 60 readers appear to agree with the Opposition Leader, with many labelling the increase a “joke” that is “hardly enough to buy a loaf of bread.”

Fran Spears believes she will be “worse off”, citing the cost of rent as a major financial hurdle.

“Even with that rise, including the huge rent assistance amount of $3.00 I will be worse off in May when my rent increase takes place than I am now,” she said.

Jane Dellar thinks “it will take more than that to keep up with the cost of living!!”

Irene Logan believes the increase “should be at least $50 a week to keep up with rising prices and accommodation increases.”

Vivyenne Rego considers the increase a “joke” claiming that as a pensioner half her payment is “already gone in petrol before food increase even touched.”

Irene Murtagh questioned whether politicians would be happy with such a meager pay increase.

“Big deal! Just found out by news broadcast, as a couple we will get, each, $3.75 per week increase. Hardly enough to buy a loaf of bread! I wonder if the Polly’s would be happy if their next increase was only $3.75 a week?” she said.

Advocacy organisation National Seniors Australia welcomed the increase in the Age Pension, Carer Payment and Disability Support Pension rates but agrees more reform is needed “to ensure the retirement income system is simpler and fairer”, including an independent tribunal to “set the rate for the pension and pension supplements to stop it becoming a political football”

National Seniors Australia Chief Advocate Ian Henschk has also called on the government to exempt work income from the income test.

“In Australia, only 2.9 per cent of aged pensioners work compared to 24.8 per cent in New Zealand. Pensioners in New Zealand simply work and pay tax without being penalised with the loss of their pension payments,” he said.

“Changing the income test would not be a burden on the budget. Quite the opposite. It would boost GDP and government tax revenue. They would go from being seen as a liability to an asset.”

The age pension is the most common form of income support available to those aged 65 and over. According to the latest data from the Australian Institute of Health and Welfare, as of March 26 2021, approximately 2.6 million people received the age pension or 62% of the population aged 65 and over.

You can find out what payments and services you are entitled to via the Services Australia website.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.