Pension Changes 20 March 2008
A number of changes to the pension system will come into effect on 20 March.
More than 3 million Australians will receive increased financial support from next Thursday.
Utilities Allowance
The Utilities Allowance will increase from $107.20 a year to $500 a year for current recipients and will be extended to all recipients of the Carer Payment, Disability Support Pension, Widow B Pension, Wife Pension and Bereavement Allowance.
Veterans and their partners receiving the invalidity service pension, partner service pension or an income support supplement will also receive the allowance for the first time.
The Utilities Allowance will now be paid in quarterly instalments to meet quarterly utilities bills.
The Seniors Concession Allowance and Telephone Allowance will also increase from 20 March 2008.
The Seniors Concession Allowance will rise from $218 a year to $500 a year for around 320,000 Commonwealth Seniors Health Card and Gold Card holders, and will also be paid quarterly in line with the Utilities Allowance.
An increased rate of Telephone Allowance from $88 a year to $132 a year, will be available for around one million veterans, income support recipients of Age Pension age, Commonwealth Seniors Health Card holders and recipients of Carer Payment and Disability Support Pension who have a home internet connection.
Indexation
Around 4.5 million people receiving income support will benefit from a rise in the adult pension and allowance rates from next week.
Payments will rise in line with a Consumer Price Index (CPI) increase of 1.7 per cent over the six months to December 2007.
The increase will flow through to around 3.4 million people receiving payments such as the Age Pension, Carer Payment, Special Benefit and Disability Support pension.
Around 1.1 million people on payments such as the Newstart Allowance, Partner Allowance, Parenting Payment (partnered), Mature Age Allowance, Widow Allowance, and Sickness Allowance, will also receive an increase.
The maximum single rate of pension will rise by $9.10, to $546.80 a fortnight, while the maximum partnered pension will increase by $7.70 to $456.80 a fortnight for each member of a couple.
This equates to annual increases of $236.60 for single pensioners and $200.20 for each member of a pensioner couple.
Deeming
The deeming rates for social security payments will rise by half of one per cent from 20 March.
The increase in deeming rates is related to inflation.
Increases in the official interest rate to 7.25 per cent mean that the social security system needs to be adjusted to take account of increased returns.
Changes to deeming rates routinely occur in March – the last change in deeming rates occurred in March 2007.
The new deeming rates are: four per cent for the first $39,400 of a single pensioner’s financial investments ($65,400 for pensioner couples and $32,700 for each member of an allowee couple), and six per cent for financial investments above those amounts.
Secure, low-risk bank accounts can currently achieve returns above six per cent.
Payments affected by deeming rates include means tested pensions, income support allowances and supplements paid by Centrelink and the Department of Veterans’ Affairs.
For most customers there will be no change to their social security payment as a result of the deeming changes.
Those with high levels of investment income should contact Centrelink to clarify their individual circumstances and the impact of the deeming adjustment.