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 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.)
Current Age Pension Rates
| Per fortnight | Single | Couple each |
| Maximum basic rate | $1,047.10 | $789.30 |
| Maximum Pension Supplement | $83.20 | $62.70 |
| Energy Supplement | $14.10 | $10.60 |
| Total | $1144.40 | $862.60 |
| Per fortnight | Couple combined | Couple apart ill health |
| Maximum basic rate | $1,578.60 | $1,047.10 |
| Maximum Pension Supplement | $125.40 | $83.20 |
| Energy Supplement | $21.20 | $14.10 |
| Total | $1725.20 | $1144.40 |
Estimated Age Pension Rates from 20 March 2025
| Per fortnight | Single | Couple each |
| Maximum basic rate | $1,051.29 | $792.46 |
| Maximum Pension Supplement | $83.53 | $62.95 |
| Energy Supplement | $14.10 | $10.60 |
| Total | $1148.92 | $866.01 |
| Estimated extra per fortnight | $4.52 | $3.41 |
| Estimated extra per year | $117.52 | $88.66 |
| Per fortnight | Couple combined | Couple apart ill health |
| Maximum basic rate | $1,584.92 | $1,051.29 |
| Maximum Pension Supplement | $125.90 | $83.53 |
| Energy Supplement | $21.20 | $14.10 |
| Total | $1732.02 | $1148.92 |
| Estimated extra per fortnight | $6.82 | $4.52 |
| Estimated extra per year | $177.32 | $117.52 |
Will this increase help?
At $4.52 for singles and $6.82 (combined) for couples per fortnight, this is a very token increase. You will be the best judge of how much difference this anticipated increase will make to your standard of living, but if the price of a cup of coffee is any yardstick, singles won’t be able to buy a whole cup in most capital cities and couples will have to share that one cup.
Could the Age Pension actually decrease in a period where inflation actually falls?
This is a really interesting question, so we contacted the Department of Social Security (DSS) directly to find out what happens in such a scenario. Here’s what their spokesperson said:
‘While the growth in the CPI and the PBLCI has slowed, the indexes have not decreased.
In situations where CPI and PBLCI do decrease, social security legislation ensures payment rates do not drop.’
What else will change?
It’s also important to remember that 20 March can often mean changes in other vital Age Pension limits such as disqualifying asset and income limits and, importantly for those who are renting, the amount paid in Commonwealth Rent Assistance. Given the continuing increase in rent outgoings, it is entirely possible the Minister will use her discretion to increase the current rate. We also asked the DSS about the timing of changes to entitlements, and here is the handy summary we received:
- As Age Pension income and asset limits are dependent on the value of payment rates, they will also increase on 20 March 2025.
- Age Pension income and asset free areas are indexed to CPI growth every 1 July.
- The Pension Supplement is indexed to CPI growth every 20 March and 20 September.
- The Energy Supplement is not indexed.
As always, we have calculated the likely Age Pension increases using the data supplied by the ABS in line with that used by the DSS to determine Age Pension increases. But these projected increases are Retirement Essentials projections. We will need to wait another few weeks for the official government announcements.
Until then, watch this space; we will publish the confirmed amounts as soon as they are released by the DSS and its agency, Services Australia.
Cost of living growth has slowed – really?
Do you feel as though your cost of living has increased as minutely as the amount confirmed by the CPI and PBLCI?
Or do you think it has increased more dramatically?
Is using these indices still the best way to determine indexation decisions?
If you are wondering about your own situation and Age Pension benefits, you can check your eligibility at any time using the free Age Pension Entitlements Calculator. You can also book an appointment with an experienced consultant to check your situation and explore if there is more you can do to maximise your payments.
OMG WOW speechless! Cant write more I’m trying to research best where to spend my increase.
It is a disgrace and hopefully will be well timed to show this mob of criminals the door
If l save real hard at the end of the month l can buy a coffee
Where are the post 20Mar estimated extras coming from? The breakdowns for the pre- and post- 20Mar tables looks exactly the same to me.
Hi Gabby, the small increase we believe will be to the basic rate and the pension supplement. We believe the energy supplement will remain the same.
That increase is a bloody joke, when the politicians have given them selves an increase of 10%.
This govt is a damn joke and needs to be sacked.
What about job seeker payments? And will they ever drop the age pension age from 67 give people a younger age to retire and live life while fairly fit and healthy as when you teach 60 it is a turn a round in life! And look at all the ages of deaths due to health reasons
Hi Bev, we only looked at the Age Pension for our article so could not comment on Job Seeker payments. Regarding the Age Pension age though it is highly unlikely this will ever go down as it has only just increase from 65 up to 67 in the last couple of years. Most other countries that have an Age Pension offer it at age 67 also.
Would love to see them allow us to earn more if we work a little. I work two days a week and lose enough to make me feel why am i doing it.
$4-52 a fortnight is a disgrace. The pension is already far too low! We are wasting millions of dollars on Aukus, Robo debt, carpark rorts, Covid job keeper, Daryl McGuire and Gladys, Qantas and the Imp Joyce! And so it goes on. Disgraceful.
I think it is a bloody disgrace that we’re only gonna get $4.47 increase on 20 March. The government should be put out of office if I had my way. I’ll put them out right now but I will not pay for the labour party ever again they are one great big disappointment.
The issue of what will happen if there is negative inflation crops up occasionally and I’m surprised you had to ask again. I am also surprised that DSS did not explain that should there be later inflation, the pension will only increase by the net rise since the last indexation eg -3%: no change. Next +2%: still no change as net=-1%. Next +4%: pension rises 3%
cost of living in yamba has certainly not decreased coles need a investigation we certainly hope it’s more than you are prediction
what a bunch of grifters and sharks, confirms my practical view of living as a lowly pensioner and how utterly corrupt and morally deficient those politicians are…..I won’t be able to buy a cappuccino for this stingy increase
Surely a joke , billions spent on defence and politician pay rises , etc etc , those relying on pensions are being sent into poverty , the gap between the haves and have nots is increasing by every year . Surely we can make our politicians more accountable than this .
The Government can stick their bloody $ 4 where the sun doesnt shine , that is a disgrace based on cost of living at present and hopefully this news will come just at the right time to make sure this Labor mob of scumbags are shown the door at the election. The system to keep Pensions up with costs needs to change now
We all KNOW, without a doubt, that this Govt will tell us black is white. They are so full of lies and deceit that it is not even funny anymore. Will their increases in their pay match ours exactly? I very much doubt it. I HATE and loathe Australia’s 2 stage “democratic” system, and am going to go and live in Europe next year.
Just goes to show the value our government puts on its senior citizens who carried the country all their working lives. Disgraceful!
Hi, wondering if the people in power ever think of the grey nomads out there ,who have no home,only caravan, motorhome,etc like me and wife,no super,like me and wife. Trying to live of aged pension,mine only as she is only 62. My dfrdb pension. Food,fuel,caravan parks, motorhome maintenance, insurance, registration etc. Doesn’t leave me with much left over.
That’s a fantastic rise. I can now put an extra 3.5 Lt. of extra fuel in my car every fortnight as long as the fuel doesn’t go up. Or one loaf of bread and a 2Lt milk each fortnight. I can guarantee with 2 months that $6.82 for couples or $4.52 for singles will be gobbled up by the increase of overall cost of living. It is a bloody insult to the people who have worked hard all their lives to make this country what it is today. We deceive better than a few measly dollars hand shack. This Government has turned their backs on the pensioners of Australia.
I’m going to have a bitch, the govt. Want you to set yourself up for retirement, when you do they don’t want to help, I knew I wouldn’t get a pension and thats fine but I would think I would be entitled to a pension card but no such luck, I have been paying high taxes for 20 years, more than what the pension is worth a year and now I’m paying top prices for prescriptions, utilities etc.,