How much is the age pension rising? Not enough to cover cost of living pressures

Millions of Australians may crack a smile over a boost to their government payments, including the age pension, from next month; but it won’t crack the pressures of rising living costs.

From September 20, the maximum fortnightly rate for age pensions, disability support pensions and career payments will increase by $28.10 for singles and $42.40 for couples.

That will bring the maximum pension to $1144.40 per fortnight for individuals ($29,754 annually) and $1725.20 for a couple ($44,855 annually), according to the Combined Pensioners and Superannuants Association (CPSA).

Pensions are indexed twice a year, based on the Consumer Price Index or the Pensioner and Beneficiary Living Cost Index, whichever is higher.

In the past six months, according to the CPSA, CPI rose per cent while the PBLCI rose 2.6 per cent. That was due, in large part, to costs of insurance, food, transport, alcohol, and tobacco.

The Federal Government is due to release the second pension indexation figures for 2024 in the coming days. However, it is worth noting, that previous CPSA projections have been pretty much on the money (often falling within a few cents).

Rising costs for insurance and energy are particular concerns for retirees — the former surging nearly 18 per cent in the past year — government data shows.

And, worse still, Australia’s biggest insurers last week warned of further increases to premiums — between 5 to 9 per cent this year.

CPSA policy manager Ash Fowler said Australians with lifelong insurance policies “can’t afford them anymore”.

“Of course, every dollar of extra pension counts, but because there has been such a sharp increase in expenses, the twice-yearly indexation isn’t keeping up,” she told the Daily Telegraph.

Ms Fowler said scammers were also preying on pensioners by trying to lure them into a fake “Centrelink Bonus” scam.

Fraudsters have made a number of fake websites with a “.org.au” domain impersonating charities and offering a “Centrelink Relief Payment” or “bonus payment” that does not exist.

Services Australia says “These payments don’t exist”.

About 2.6 million Australians receive an age pension, but there could be many more eligible for it due to rising inflation, which has pushed up eligibility thresholds.

The government uses income and asset tests to deem if individuals and couples are eligible for the age pension, among other requirements — like citizenship and age.

You can apply for the age pension in the 13 weeks before you reach your eligibility age.

Contact Services Australia for more information.