The rising cost of living has heavily impacted all Australians but pensioners are set to receive a lifeline with pension payments expected to receive a major boost in September.
The bi-yearly payment increases, which are linked to inflation, are expected to be the largest increase in over a decade with the inflation rate sitting at 5.1 per cent and expected to surge higher towards the end of the year.
Payments are predicted to increase by $25.50 a fortnight, according to modeling obtained by The Daily Telegraph.
Treasurer Jim Chalmers said “this indexation” was crucial “to keep up with the skyrocketing cost of living.”
“The shape of the challenge to inflation will get worse before it gets better but it will get better,” he told reporters.
“We understand that pensioners are doing it incredibly tough when it comes to their costs of essentials like groceries, electricity and petrol and in other parts of the household budget.
“We don’t want to see pensioners fall further and further behind.”
The previous round of pension increases in March this year saw payments increase by $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 were also increased, allowing more senior Australians to access a part pension.
The predicted increase in payments comes after Opposition Leader Peter Dutton called to double the amount age pensioners can earn before their pensions are reduced in an effort to both fix staff shortages and help with the rising cost of living.
The $145 million proposal would see the pension income limit raised from the current amount of $300 to $600 a fortnight and still be able to receive the maximum age pension of $987.60 for singles and $1488.80 for couples.
In a statement released by Dutton at the time, the Coalition leader said the policy would “help relieve pressure on a very tight labour market” as well as “put downward pressure on inflation and interest rates”.
“Employers can’t find staff – thousands of jobs across hospitality, agriculture, tourism and retail remain open. This policy ensures that pensioners and veterans, who want to work, are not financially penalised. It puts more money into their pocket,” Dutton said.
“There are around 80,000 age pensioners and veterans who are choosing to work who will likely benefit from this change.”
The possible increase in the age pension and calls from Dutton to double the amount age pensioners can earn before their pensions are reduced can’t come soon enough for seniors after the Australian Bureau of Statistics (ABS) revealed older Australians are suffering the most from the rising cost of living.
Head of Prices Statistics at the ABS Michelle Marquardt said the main culprit affecting older Australians is the increase in grocery prices, but household costs also played a large role.
“These households were also more affected by increases in housing costs, as they have relatively higher expenditure levels on utilities, maintenance and repair, and property rates,” Marquardt said.