Social Services Minister Anne Ruston has come under fire for suggesting the pension is generous, as seniors groups and Labor call for more changes to help older Australians.
The federal government has announced it would cut deeming rates, which are used to estimate how much some pensioners earn on their financial investments.
But the opposition and National Seniors Australia believe the rate should be cut further to be more in line with the country's record-low interest rates.
Senator Ruston embarked on a media blitz on Monday to sell the coalition government's decision to give a boost to some pensioners.
"It is a generous amount of money that the Australian taxpayers make available to our older Australians," she told 3AW on Monday.
When pressed on the comments, Senator Ruston said: "In terms of the amount of money that taxpayers fund our social welfare system, we put a lot of money into it."
Labor leader Anthony Albanese said she had chosen the wrong words before describing the government's deeming rate reduction as "too little, too late".
"I think aged pensioners out there who are struggling, frankly, to make ends meet wouldn't regard it as generous," he told 6PR radio.
"They'd regard it as something that they've worked for. They've paid taxes throughout their life, made a contribution to the country and they should be respected."
Treasurer Josh Frydenberg avoided directly criticising his colleague, saying Ms Ruston had provided relief for pensioners through the deeming rate decision.
"I understand pensioners have challenging times, a number of pensioners do it really, really tough," he told reporters in Townsville.
National Seniors Australia's Ian Henschke said the government's claim of pensioners getting more than $800 more each year did not add up.
The deeming rate on the first $51,800 of a single pensioner's financial investments - and the first $86,200 of a couple's - will drop from 1.75 per cent to 1 per cent.
The rate for balances above those amounts will go from 3.25 per cent down to 3 per cent.
Australian Associated Press
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