March 20 2024 Age Pension Increases

It’s that time of year again when we receive clearer signals about the magnitude of Age Pension indexation scheduled for 20 March.

From 20 March 2024 the maximum full Age Pension increases $19.60 per fortnight for a single person and $29.40 for a couple combined.

The good news is that, even though the Consumer Price Index (CPI) has eased off somewhat, there will still be an increase in the Age Pension base rate and main supplement. This will be based upon a CPI increase of 1.8% which was higher than the increase in the Pensioner and Beneficiaries Living Cost Index (PBLCI) which was confirmed recently to have risen by 1.5% over the past six months.

The what, you might ask? Here’s a quick recap on how Services Australia uses different economic indicators to measure price and wage increases and then apply this movement to keep Age Pensioners ‘in touch’ with the working population. This indexation takes place twice a year, on 20 March and 20 September.

How Age Pension Indexation is calculated

The three key components of indexation are:

  • Consumer Price Index (CPI) 
  • Pensioner Beneficiary Living Cost Index (PBLCI) 
  • Male Total Average Weekly Earnings (MTAWE)

Here’s how each of these components of Age Pension indexation are used.

Consumer Price Index (CPI)

This is a measurement of selected consumer prices over the past month, six months and year. The increase period that is used for March 2024 Age Pension indexation is the same for both CPI and PBLCI, the six months change between December 2023 – June 2023. 

Pensioner Beneficiary Living Cost Index (PBLCI)

Living Cost Indexes (LCIs) measures the price change of goods and services and its effect on living expenses of selected household types. The PBLCI measures the living costs for Age Pensioners and other ‘government transfer’ recipient households, i.e. households that source most of their income from government support. 

Male Total Average Weekly Earnings (MTAWE)

This index measures the six-monthly movement in the average weekly ordinary time earnings of full-time adults, seasonally adjusted. Essentially a couple’s full Age Pension amount must be at least 41.76% of MTAWE.  This measure hasn’t affected Age Pension indexation for 15 years.

How much extra will be paid in March?

Because the CPI is the higher measure, and therefore the one which applies, the full singles Age Pension base rate will go up by around $10 per week while couples will see about a (combined) $15 increase. The 1.8% is NOT applied to the energy supplement.

The below table shows the current Age Pension benefit and the confirmed 20 March increase

Per fortnightSingleMar 20 increaseCouple eachCouple 
Mar 20 increase
Couple combined
Maximum basic rate$1,002.50$18.10$755.70$1,511.40$27.20
Maximum Pension Supplement$80.10$1.50$60.40$120.80$2.20
Energy Supplement$14.10$0$10.60$21.20$0

Are you receiving the correct amount of government entitlements? Fill in our free Age Pension Entitlements Calculator to check your figures!

Is this enough?

Because the CPI is the determinant, in theory, the Age Pension increase should cover your own personal cost of living increases caused by higher prices for goods and services. But is the extra $10 or $15 per week really enough? In your experience, have the costs of those items that your household consumes only gone up by 1.8% It seems unlikely when we think about things like fuel, insurances and supermarket shopping. 

Is it helpful?

We’d love to hear your thoughts on whether the expected increase will help to cover price increases – or if it’s two cups of coffee a week and not much more?

Shortly after  Services Australia officially announces the 20 March indexation changes, the Retirement Essentials Age Pension Entitlements Calculator will be updated to reflect the new amounts. In the meantime, it can be used for free to assist with all your calculations on the current rates.

If you are approaching the time when you apply for an Age Pension or you wish to review the amount you are currently receiving, a Maximising Your Entitlements consultation will allow you to fully understand all the entitlements strategies at your disposal. 

*Article updated with confirmed Age Pension Increases 04/03/2024 1.30pm