the Retirement Essentials Team, Author at Retirement Essentials

Your 20 March 2025 Age Pension increase

by the Retirement Essentials Team | Centrelink Age Pension

The twice-yearly Age Pension increase is due to land on 20 March 2025. We reported in mid-February our predictions for singles and couples, and we’re pleased to say our predictions were correct within a few cents. The table below shows the increases, as confirmed by the Federal Government, including supplements for singles and couples.

March Age Pension increases

The Federal Government has confirmed the new payment rates from 20 March 2025 for recipients of the Age Pension, Disability Support Pension, and Carer Payments. Singles can expect a total increase of $4.60 a fortnight and couples can expect a (combined) total increase of $7.00 a fortnight.

What will be in the March 2025 Budget?

by the Retirement Essentials Team | Centrelink Age Pension

At the time of writing we still don’t know when the Federal Election will be held, except that it will be before the end of May. This means that we still expect a Federal Budget to be delivered on 25 March. Even if an election is called, it is likely we will see a Budget Statement from Treasurer Jim Chalmers sometime in March.

So what will be in the Budget that’s of interest to retirees? That’s the really big question and one to which the team at Retirement Essentials has no guaranteed answers. We do, however, have a point of view about what is likely to come through. And we also have strong views about measures we would like to see included, to ensure that older Australians are treated both equally and fairly.

Here are our Federal Budget 2024-25 guesses and wish list.

Age Pension increases on 20 March 2025

by the Retirement Essentials Team | Centrelink Age Pension

A few weeks before 20 March and September, the team at Retirement Essentials is usually able to predict (within a few cents) the expected Age Pension indexation change. This indexation of the base rate occurs twice a year. The main Age Pension supplement is also adjusted (by CPI); occasionally the energy supplement is increased as well.

Last September’s increase of $26.54 per fortnight for singles ($41.17 for couples) was based upon increases from December 2023 to June 2024 when inflation was running higher at 3.8% per annum. What goes up will almost inevitably come down at some stage, and the annual rate of inflation has now eased to 2.4% for the 12-month period Jan-Dec 2024.

But Age Pension will still rise

The good news is that you can still expect a slight Age Pension base rate increase on 20 March, as two of the three main indicators upon which indexation is based – the Consumer Price Index (CPI) and the Pensioners and Beneficiaries Living Cost Index (PBLCI) – are still higher, albeit by less than one per cent.

The period used to calculate Age Pension indexation is the 6-month period between 30 June 30 and 31 December 2024. Across this time the CPI increased by 0.4 % and the PBLCI by 0.2%. (While the AWOTE is a third measure, it is often not relevant as the couples’ pension needs to fall below 25% of the current AWOTE for this to be relevant.)

What does this mean for fortnightly payments?

Here are our indicative estimates based upon the above increases, using CPI of 0.4% to adjust both the base rate and the pension supplement, as it is the higher of the two measures. (While possible, it is unlikely that the energy supplement will be changed from $14.10 as there is a separate energy rebate still in play. However, in an election year anything is possible.)