Over three million Australians will receive an increase in their pensions to help meet increases in the cost of living, the government has announced.
From 20 March, age, disability and carer pensioners, and veterans’ income support recipients will receive an extra $13.20 a fortnight for singles on the maximum rate, and $19.80 a fortnight for couples combined on the maximum rate. This March pension indexation increase is driven by wages growth in the six months to November 2010.
Following these increases, total pension payments for those on the maximum rate, including the base rate and pension supplement, will be $729.30 a fortnight for singles, and $1,099.40 a fortnight for couples combined.
These pension rises deliver on the Gillard government's commitment to improve support to older Australians, the government said. In September 2009, the government delivered the most significant reforms to the pension system in its 100 year history. These reforms delivered pension increases, a new pension supplement, a pension Work Bonus and a new indexation system.
These important reforms made the system sustainable for the millions of age and disability pensioners, carers and veterans who depend on it.
Since the reforms began in September 2009, the pension has increased by $128 per fortnight for singles on the maximum rate and $116 for couples combined on the maximum rate.
The rate from September 2009 includes the base pension and Pension Supplement. The rate prior to September 2009 includes the fortnightly value of Pharmaceutical Allowance, Utilities Allowance and Telephone Allowance (at the internet rate).
Under the government’s historic reforms, pensions are indexed twice a year to the highest increase of two measures: the consumer price index (CPI), and the pensioner and beneficiary living cost index (PBLCI).
Pensions are then compared to the male total average weekly earnings (MTAWE) benchmark and are increased if necessary to bring them in line with MTAWE.
The Government's pension reforms also increased the MTAWE benchmark for singles from 25 per cent to around 27.7 per cent of MTAWE.
From 20 March, a further one million Australians will also benefit from increases to income support payments such as Newstart and Parenting Payment. Rent Assistance will also increase.
Pensioners will begin to benefit from the increased pension rates on their first payment date after March 20 this year.