Pension increases from today

Today the pension will increase for around 3.3 million age pensioners, disability support pensioners, carers, wife and widow pensioners and veteran income support recipients.

Pensioners will receive the first payment of their much-needed increase on their regular pension pay day in the next fortnight.

The increases are part of the Australian Government’s Secure and Sustainable Pension Reforms, which will improve the pension’s adequacy, simplify the way it is delivered, and secure its sustainability into the future.

These are the most significant reforms to the pension since it was introduced 100 years ago, and are a vital investment in preparing Australia for the future.

The changes include the increase in the base pension and the new Pension Supplement announced in the May Budget, plus regular indexation.

A single pensioner on the maximum rate of the pension will receive:

• An increase of $60 per fortnight in the base pension;
• An increase of $5.00 per fortnight in the new Pension Supplement; and
• Indexation increases of $5.50 per fortnight in the base pension and $0.33 per fortnight in the Pension Supplement.

This is a total increase for single pensioners on the maximum rate of $70.83 per fortnight, bringing total pension payments to $671.90 per fortnight.

Pension payments for singles are now set at two thirds of the rate paid to couples combined.

Couple pensioners combined on the maximum rate of the pension will receive:

• An increase of $20.30 per fortnight in the new Pension Supplement; and
• Indexation increases of $9.20 per fortnight in the base pension and $0.43 per fortnight in the Pension Supplement.

This is a total increase for couple pensioners combined on the maximum rate of $29.93 per fortnight, bringing total pension payments to $1,013 per fortnight.

Pensioners should have received a letter from Centrelink explaining exactly how the pension changes will affect them. It is important that all pensioners read their letter carefully.

Pensions are calculated daily and paid fortnightly in arrears, so some pensioners will find that their first fortnightly payment after 20 September will be partly based on pre-20 September rates, and partly on the new rates.

The pension payment for the following fortnight and subsequent fortnights will be fully based on the new rates, including the increases, Pension Supplement and indexation.

Other changes that come into effect today:

• Introduction of the new Work Bonus that allows pensioners to keep more of the money they earn through part time work. The new Work Bonus replaces the Pension Bonus Scheme, which will be closed to new entrants from today;
• New pension indexation arrangements;
• A new Seniors Supplement for self funded retirees who have a Commonwealth Seniors Health Card;
• Changes to the pension income test, including an increase in the withdrawal rate from 40 to 50 cents. Transitional arrangements will apply for existing part pensioners affected by the movement of the income test withdrawal rate from 40 to 50 cents. Pensioners on these transitional arrangements will receive an increase and have their payments maintained in real terms; and
• Regular six monthly revaluation of all listed securities held by pensioners.

Full details of the changes to rates and thresholds are available at Australian pensions have changed page.