Age Pension increase for mid March 2021
Nearly 2.6 million older Australians will be receiving an increase to their Age Pension payment following a mid March indexation increase to social payments.
From 20 March, 2021, all social security payments will be increased, including the Carer Payment.
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. National Seniors Australia says was the first time there was no increase to cover the cost of living in the Pension since 1997.
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.
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.
What are the pension increase amounts?
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. The Pension Supplement, Energy Supplement, Rent Assistance, and other supplementary payments have also been included in this indexation increase.
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.
Additionally, the fourth, and final Economic Support Payment, paid to people on the Age Pension and other social security payments on 1 March, provided an extra $250 to pensioners.
A range of income and assets test limits will also increase with the indexation so recipients will be able to have higher income and assets before their pay is impacted.
If you are a part-pensioner, you may get an additional boost to your pension if the value of your assets has changed. However, also be mindful that some may instead see a decline in payments or a loss of welfare altogether – if your investments are doing well – read more below under Part-Pensioner.
The tables below provide more detail in terms of the latest increase and how the Age Pension is broken down.
Age Pension rates for a single person
Age Pension rates for a couple (living together)
Source: Department of Human Services. Applicable 20 March 2021 to 19 September 2021
Minister for Families and Social Services Anne Ruston said the increases, in line with indexation arrangements, would help recipients keep up with changes in living costs. Minister Ruston says that those four payments over the last year totals $7 billion for Australian pensioners.
Ruston explained indexation was one of the “regular mechanisms” built into the social security safety net “to make sure rates reflect the prices payment recipients see at the supermarket and at the bowser”.
However, the Australian Council of Social Service says the rate is still inadequate and is lobbying senators to amend a bill before parliament to be more generous.
Chief Advocate for National Seniors, Ian Henschke, told media on Monday that older people who don’t own their own home are most likely living in ‘pensioner poverty’ and this new rise doesn’t meet the increasing cost of rental accommodation – estimating 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.
With many hoping for a larger increase in September, Combined Pensioners and Superannuants spokesman Paul Versteege says “It won’t be until wages start to go up strongly that we can expect more substantial pension rises.”
Part-Pensioners’ payments may decrease or lose welfare
Unfortunately, not all pensioners will be receiving a boost in welfare payments. Some part-pensioners may have also lost access to the welfare payments due to changes to assets tests, while others have become ineligible for a pensioner concession card.
Why does this occur? Centrelink reassess the value of your assets twice a year along with its indexation of the pension. It does this to make sure that you are not being paid too much or conversely that you are being paid enough. this is based on the rules set out under the means test.
If you are spending more than you earn from your investments or you have spent some of your capital on goodies, then maybe things will be different. But that’s why its so important to make sure that you ask Centrelink to revalue your assets if your circumstances change.
You can do this at any time.
National Seniors is calling for more regular revaluation of assets in their 2021 budget submission.
Revaluing investments more often would:
- provide an immediate boost in income to retirees whose asset values have fallen
- reduce pension overpayments when markets rise, and
- reduce the administrative burden on Centrelink from requests to manually revalue assets.
When is the next Age Pension increase?
The Age Pension rates will next potentially change on 20 September 2021. Increases are likely but not certain because the Australian Bureau of Statistics evaluates these increases based on changes in the Consumer Price Index (CPI), Male Total Average Weekly Earnings, and the Pensioner and Beneficiary Living Cost Index. In September 2020 the Age Pension rates did not increase, although that was for the first time since 1997.
Age Pension rates and the upper thresholds for the assets and income tests used to determine eligibility for a part Age Pension are adjusted in March and September each year. The lower limits used to determine eligibility for the full Age Pension change in July each year.
How the Age Pension works
To qualify for the Age Pension in Australia you must have reached Age Pension age (which depends on your date of birth but is currently 66), satisfy Australian residency rules, and pass both an income test and an assets test. Depending on your level of income and the assets you own, you may qualify for either a full or part Age Pension.
To read more on income and assets test information, click here.
Source
– SuperGuide, Age Pension rates (March 2021 to September 2021). 26 March 2021. Read more
– Aged Care Guide, Age Pension increase for mid March. 14-March 2021. Read more
– Seven News, Australian pension payment to increase after indexation. 9 March 2021. Read more
– The Senior, $8.40 p/f pension increase as one in three over-65s live below the poverty line. 9 March 2021. Read more
– National Seniors, Pension increase or decrease depends on your assets: Budget special. 18 March 2021. Read more
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