How pensions will change in March
Last year the jump in the October Consumer Price Index (CPI) surprised many. The overall year-on-year (YOY) increase of 6.9% was lower than expected, and lower than the September YOY increase of 7.3%.
The main movements were in the categories of food, housing, rent, transport and holidays.
Food prices continue to increase, they are now up 8.9% for for the year for the year to October.
The new rates are here!
On March 6 2023 the new rates were announced. Read all about the changes in our recent article. The current rates and rules are all summarised for you too.
Most retirees are not affected by increasing building and construction costs (new dwellings), which is a relief as they are up 20.4% for the year to October.
Rent has shown further annual increases, from 2.9% in September, to 3.5% in October, emphasising the tightness of the rental housing market.
The higher excise tax on fuel had the expected effect, with fuel showing an 11.8% annual increase in October (compared to 10.1% in September), which is still lower than the record increases witnessed earlier this year.
Holidays and travel showed an annual drop in October (3.7%) compared to increases in September (12.6%) as the travel sector is no longer experiencing peak European travel and school holiday demands.
How pensions will change in March
Last year the jump in the October Consumer Price Index (CPI) surprised many. The overall year-on-year (YOY) increase of 6.9% was lower than expected, and lower than the September YOY increase of 7.3%.
The main movements were in the categories of food, housing, rent, transport and holidays.
Food prices continue to increase, they are now up 8.9% for for the year for the year to October.
Most retirees are not affected by increasing building and construction costs (new dwellings), which is a relief as they are up 20.4% for the year to October.
Rent has shown further annual increases, from 2.9% in September, to 3.5% in October, emphasising the tightness of the rental housing market.
The higher excise tax on fuel had the expected effect, with fuel showing an 11.8% annual increase in October (compared to 10.1% in September), which is still lower than the record increases witnessed earlier this year.
Holidays and travel showed an annual drop in October (3.7%) compared to increases in September (12.6%) as the travel sector is no longer experiencing peak European travel and school holiday demands.
What’s in these numbers for retirees?
It depends where and how you spend your money. If you are renting and on a full Age Pension, life continues to be tough with food and housing taking up the lion’s share of your income. If you are building a residence, you are probably watching the prices scoot up on what seems to be a daily basis. If you are a frequent traveller, then no doubt you have noticed the steep increases in flights and accommodation. And energy bills continue to climb for all of us, but are not featuring in the biggest increases above, mainly due to subsidies.
How will the CPI influence March 2023 Age Pension increases?
As you are probably aware, the CPI is one of two factors at play. The formula for increasing the pension rates in March and September is a combination of movements in the Consumer Price Index or the Pensioner and Beneficiary Living Cost Index (PBLCI), whichever is greater. Pensions are then benchmarked against a percentage of the Male Total Average Weekly Earnings (MTAWE).
So using this data, we are able to now predict, with a strong degree of accuracy, the likely increase to the Age Pension in March 2023.
Here’s our projection
The most recent published PBLCI (end September 2022) is 6.4%. If inflation continues to end December at or near its current rate of 6.9%, then the adjustment in March 2023 will be based upon the CPI. Using the 6.9% annual CPI, less 4% already used as an adjustment in September 2022, will result in a further increase of 2.9%.
Applying a 2.9% increase to the base rate of the Age Pension would mean an extra $27.17 per fortnight for a single person and $20.48 for each member of a couple.
Whilst the CPI and the PBLCI are the dominant factors which influence movements in Age Pension rates, a new Economic Inclusion Advisory Panel which will advise the Federal Government before future May budgets on the fairness and equity of social welfare payments. It is possible that input from this advisory group will also exert upward pressure on the amount of such payments.
The actual increase
The Government has just announced that the single Age Pension payment will rise by $34.70 and the couple’s by $26.10 each per fortnight, a little more than we predicted a three months ago which is great for those on the Age Pension.
What’s your situation?
Are you feeling the pinch as prices rise?
Or, like some economists, do you believe we’ve already scaled the peak and things will settle from now on?
The new rates are here!
On March 6 2023 the new rates were announced. Read all about the changes in our recent article. The current rates and rules are all summarised for you too.
I believe spending will as usual rise over Xmas period but by next Feb many people will realise the debt they are in and spending will fall into February onwards and with it inflation will start downwards. I am glad I do not have a mortgage or rent to pay though!
I am having trouble with our everyday house hold bills and grocery items and I think we should get a rise of at least $40 extra per fortnight.
Groceries, Fuel , Private Health insurance ,pensioners now need to pay doctor visits , Electricity , Gas , Council rates , etc , etc , etc honestly how do we pensioners survive , while politicians spend , spend , spend , then give us a paltry amount pay rise , which we appreciate
but it is never near enough to try and keep up with costs .
need hearing aids.
forget it.
need housekeeping.help forget it
more medications added
rent going up
grocery costs skyhigh who can afford delivery costs on a pension??
Elbowgreasy has no idea of economics, throws money around like confetti, then wonders why we have rising inflation and increase in mortgage payments. Typical Labor failure
I have a mortgage and might have to sell my home. My husband of 45 years passed 12 months ago from cancer and our home has many memories. I would like to downsize but when I am ready, not because I have too. With all the rate increases I am having trouble living without stress.
I have just had to sell my home for the exact same reasons – my mortgage now takes 60% of my pension – am really strugglingwith stress and mental anxiety – this government need to do something constructive now pay out money to other countries – they need to look after Australians first.
Using the CPI increase is making sure that Age Pensioners supposedly keep up with cost of living. This does not work within Australia and with the new Government so focused on reducing emissions the cost of living has risen greater as electricity prices, gas prices and fuel increases have taken more than a 3.9% pension increase will achieve.
Maybe if the savings of $275.00 was passed on now it might help.
Personally, I see no logic in Australia becoming the leader in emission reductions when we produce around 1% of the world’s total.
Government regulation and investment in the Australian renewable energy market increases private investment in construction, jobs and taxes. For more information read Ross Garnauts book “Superpower” (Australians low carbon opportunity). The Australian economy once road on the sheeps back, now minerals and hopefully a world leader in the renewable energy market, regardless of the degree of our own emissions.
$27.17 a fortnight is a joke.
I think that $ 40 rise may be reasonable to catch up with the grocery price increases and the extra charges on all the the electricity/ Has & water bills rises plus the fuel cost and medication bills might help manage or it should be at least around 75% of the normal wage to be considered .
My rent went up $90 a fortnight, apart from any other expenses such as petrol and food. One whole pension now pays the rent and the other pension (I am married) has to cover everything else. No way we can move at present either.
I agree the base pension should be increased significantly to begin with. I would like to see the politicians who can influence the pension live on this.
$27.17 is a very decent increase, especially on top of the $38+ we received just in September. We’ve never had such good increases and I’m finding them very helpful. Remember, a pension isn’t supposed to make you rich, it’s to help you afford the basics in life, food and shelter and we’re very fortunate to have one of the highest age pensions in the world here in Australia.
of course it won’t I’m in high rise public housing as soon as we get it they deduct 25% for rent plus increase the water rate. so if the amount estimated is correct I’ll end up with $20 the electricity will take that.
Increase in pensions are based on the CPI , not Inflation, which is higher the the CPI, therefore pensioners are losing ground!!!
I am a new Pensioner after many years of illness, finally. But after Rent, running a vehicle, Rego, services, fuel, food, electricity, gas and no entertainment one wonders are we being killed off slowly (tongue in cheek) . $27.17 equates to $13.58 per week, which is a magazine and coffee (all your entertainment for the fortnight}. Take Inflation into the equation and one meal a day and hopefully we wont be here in five years. What a life.
i was wondering that it look like this country os bad for young elderly and people on disability the ndis funding only pays the workers hence the they can get tax off these in turn its become shit since howard sold off all the assets the country used to get money for for a damn temp surplus what a bloody joke
My wife and I live on the age pension, plus the carers pension for me. We pay almost $ 500 a fortnight on our mortgage.
Until the last 6 months we could live comfortably on that, and even build a small reserve We are non drinkers, non smokers, and don’t get out much, which helps a lot. We have solar power and batteries but, because of my wife’s medical needs our winter bill is still around $1000. We make use of every concession etc., available to us.
In the last 6 months, increased expenses have begun to eat into our reserve . The fortnightly mortgage payment has gone up $50 for a start, and basic foodstuffs are getting very expensive.
We should survive, and if interest rates eventually go down we might even get ahead again. Until then, opportunity shops, community swap carts, and community gardens help us manage.
We feel lucky to live in Australia, with what is really a very good social welfare system for the elderly.
The aged pension is so terribly under funded. It is a wonder that people survive.!!
We conributed to our country’s development but little has been given back by a uncaring government.!!!!
still trying to work out why fuel is so expensive, when the price of a barrel of oil has dropped, and why diesel ( the sludge) is dearer than unleaded?
my mum lives in an old people home she gets just over 2000 a month here rent is 1800.00 per fortnight and yet shortage of housing and yet they still want to immigrate 200,000 people into the country it doesn’t make sense to me
The increase in the pension every 6 months is only a gap plugger. We are, and alway will be, well below the poverty line, unless the government increases our pension to where we can catch up and start living what life we still have left without worrying about where our next meal will come from. Or how we will pay the next electricity or gas bill, put fuel in our cars, pay council and water rates. Pay for home and contents insurance, and keep clothes on our back. We need at least an extra $100 per fortnight for couples and $120 for singles to plug the gap and to be able to gain an even keel and keep above inflation.
Idon’t know how the juggle the CPI but most of my costs have gone up by 50 to 100%
$ 100 rise fortnightly should be about right . And $ 140 will be more sufficient to manage for the next 6 months.or should consider 75 to 80 % of the living wage might be more realistic to catch up as we pay taxes on every item we purchase and should be given Free Car Registration or a 37 % discount on Fuel cost. to make life a bit easier to manage.
I pay $700 rent fortnight on a disability pension, by the time food insurances mobile bill and car costs, life is a big concern, I have been living with cancer 2 and half years, can’t get rid of car as I need it for appointments, hope we get a rise soon and more rent assistance. regards Sue
The inequities for pensioners are stark. I paid tax for 40+ years but now I cannot afford to service and maintain an essential vehicle or carry out any regular maintenance on my home. Not even tins of paint. Health, food, insurances, rates and energy expenses cannot be met now. I am 76 and my wife’s carer following a stroke. I am therefore unable to top up with the extra income from a part time job that some can. That is an unfair disparity. The age pension falls short by $10,000 per year for a modest but reasonable life-style. Pensioners are not significant contributors to inflation. The discretionary spend of the wealthy and greedy corporations are the cause.
Any increase goes towards paying Council and water rates which have increased more than the pension, especially in regional areas where one council has mismanaged ratepayers’ money. The pensioner rebate has not increased in the ten years that I have been a pensioner. It would be helpful if regional water rate payers were given the same rebate as city pensioners.
I am grateful to get a pension but why is it so low. inflation is going up faster than the pension increases. I see the government giving away money for so many projects around the country but there’s never enough money to give us a decent increase so we can battle the price rises and keep our regular bills paid while being able to eat decent meals every night instead of 2 simple food nights then 1 decent and so on. There just seems an unfair sharing of available funds, and those that have worked hard and helped build the country with our taxes are put behind those that never have and just hold out their hands with no intent to help themselves. No problems though because the way its going the elderly population won’t survive much longer like this and there will be more money to splurge on hand outs.
having been sick for almost 3 years, being a senior is the pits can’t afford to buy anything other than the bare necessary items to live day to day. I don’t go out anymore except to shop for food. My husband needs new shoes but can’t afford any yet. had to put some on layby. That is the thanks you get for 40 years of working and paying taxes. Other than annual holidays I never took sick leave or time off
Elbowgreasy has no idea of economics, throws money around like confetti, then wonders why we have rising inflation and increase in mortgage payments. Typical Labor failure
The assets and income test for aged pensions needs to be abolished, will save billions administering it, and stop a lot of rorting
Pay a universal pension to all that have worked and contributed to society.
The current aged pension is classed as welfare, paid by the taxpayer.
It is way short of where it should be for a decent living, as everything has sky-rocketed.
aged pension is impossible to live on now. i rarely buy food essentials ie meat fresh vegeis fruit as just cannot afford. substitute with canned goods. it should be raised so that people can at least buy decent food.
I’m staggered when you consider many or most other countries that our aged pensions are indexed. I’ve worked every day of my life, paid heaps of tax as a single man, worked bloody hard to be debt free with my home paid for. No gifts or handouts like it seems so many get today, even if you haven’t worked a day in your life !!
Centrelink seems to roll out the red carpet for many .. special groups we mustn’t mention !! At the risk of offending someone !! Billions go to other countries not to mention people coming into Australia, payments made ready and housing supplied .. including Medicare … sounds too good to be true, let me assure you it’s not .. I have a working career where I know how it works.
But somehow the pension is on the bottom of the list ?
We supposedly have a major increase in 3 weeks, the 20th of March to be precise !!! Not a word has been mentioned …. But oh !! Goodness me, child care is all over the front page !! Who’s choice was it to have children ?? We are all aware of our ‘entitlements’ but somehow not our responsibilities ???
My wife and I are on dva & dva partner pensions.Will we receive the age pension increase that commences 20 March 2023(we are both aged over 65
Hi Peter, thank you for your query! Our speciality is the Age Pension so we cannot comment on DVA and what changes they may have or when. You would need to contact DVA on 1800 838 372 to be certain.
I wish the Government would realise the struggle some Pensioners have just to put Food on the Table. Not counting keeping cool or keeping warm.
The Price of Food in the shops now is terrifying nearly every item has jumped a Dollar. Not adding any medication you might need. Now when I shop I make a list of what essentials I need then think about any other item I be able to Afford.
In the meantime saving some of my Pension for the Electric or Gas due. Then House in Insurance a must in this Day and age. Pension at the moment is a balancing act to survive. The Government has no idea really how we live.
With the new pension being in place as from Monday March 20 I note my new pension is due in just three days on Thursday. Guess how much that will be… $777.83. That is an increase of $4.03…. great… ! That is less than a cup of coffee these days… what an idiot system. We now have to wait an extra two weeks and I’m not sure that we get the full benefit even then. I can access my Centrelink account on that day to find out.
The $4.03 is pro rata for the first fortnight. Thereafter it is the full amount.
How many commentators here realise that, based on multiple sources, it is generally accepted that Australia has the 6th-best age pension scheme in the WORLD (after Denmark, Iceland, the Netherlands, Norway and Israel).
And it is highly unlikely Australians would countenance the funding support (i.e. tax system) necessary to pay for the age pensions provided by these five more generous systems.
For what it is worth, UK is rated 12th and USA 18th and the rankings are quite broad, with the top couple ranked in the mid 80s, Australia 75. and USA in the low 60s .
For just one site (of many) with further detail, check out:
https://www.visualcapitalist.com/ranked-the-best-and-worst-pension-plans-by-country/
So Australia is well and truly “punching above its weight” in this regard.
Crying that “the guvmin” should be doing more, etc etc etc is, with respect, gratuitous in the extreme. And this was highlighted with the huge numbers who raided their superannuation nest egg late in the Covid outbreak, with recent figures highlighting the fact that $38 BILLION dollars was withdrawn by 2.6 million people, and a quarter of these people raided their Super within days of the scheme opening. Further figures released show a large amount of the Super drawdowns was spent on non-essentials, such as gambling – no doubt by people who, a couple of decades down the track, will be demanding “the guvmin” should be doing more for them.
Yes, a lot of people are doing it tough.
But there is no doubt some (definitely no means all, and some through necessity) who basically made unwise decisions in the past and in the future will be insisting “the guvmin” should be covering their past “live for today” philosophy.
And note I did acknowledge “no means all”.
However, would it be fair for those who in many cases made the hard decisions for the first 40-odd years of their working life, to be expected to subsidise those who decided to “live for today, and insisting “the guvmin can look after me generously when I can no longer earn a crust”?
I appreciate the pension allowance the government is giving me ,I am a frugal spender and only buy the necessary things ,imanage because i love on my own and shop at Op shops for clothing ,books (iread a lot )keep fit by excersing in the pool 3 timed a week $4 a visit no time limit oam 80 yrs old single and grateful for money I get from cemterlik ,I have been to countries where there is no government financial assistance, no free medical services,