Biggest increase in 12 years
Last Monday the Minister for Social Services, Amanda Rishworth, announced the largest increase in the Age Pension for 12 years, effective September 20. The full range of welfare increases will affect 4.7 million Australians.
The new indexed rates show a substantial lift of $38.90 for singles and $29.40 each for couples. The maximum rate of Age Pension will increase to $1026.50 a fortnight for singles and $773.80 for each member of a pensioner couple or $1547.60 per couple (including both pension and energy supplements).
The reason for such a large increase is because it is based upon the Consumer Price Index (CPI) which was higher than the alternative index benchmark, the Pensioner and Beneficiary Living Cost Index. (PBLCI) over the last quarter. Increases have also been made to some Age Pension thresholds and to certain supplements.
To cut to the chase, what does this mean for you?
If you are already on an Age Pension, you just got an increase. This will come through in your first payment after September 20, 2022.
If you previously missed out, the changes to income and assets thresholds mean you may now qualify under the new thresholds from September 20th.
If you are self-funded and believe you still will NOT qualify for the Age Pension, you are highly likely to soon qualify for the very valuable Commonwealth Seniors Health Card (CHSC). The legislation increasing access to this concession card will most likely become law during the current sitting of parliament, with the new rules also starting on September 20. This means that single retirees who earn less than $90,000 per year and couple households earning less than $144,000 will become eligible. This is a big deal as nearly all self-funded retirees will now qualify for a CSHC. Is this you? If so, how quickly will you apply? You can read more about this proposed change here.
Another change to the Age Pension was announced by the Albanese Labor Government at the Jobs and Skills Summit. This means that recipients of the Age Pension and Service Pension will now be able to earn more without having payments reduced. This is covered in today’s enews update as well.
Overview of Age Pension Increases 20 September 2022
|Single||Pre 20 Sept||September 20, 2022||Increase per fortnight|
|Supplement||$ 72.70||$75.60||$ 2.90|
|Energy Supplement||$ 14.10||$ 14.10||–|
|Partnered (each)||Pre 20 Sept||September 20, 2022||Increase per fortnight|
|Supplement||$ 54.80||$57.00||$ 2.20|
|Energy Supplement||$ 10.60||$ 10.60||–|
Whilst increases to the Age Pension are always welcome, they can also be confusing. If you would like some support to better understand how the new rules will change your situation, we’d be delighted to assist in a one-on-one adviser consultation.
And if you are one of those self funded retirees tell us what you think about the new CSHC thresholds, and will you quickly apply for the card?