Don't expect windfall in March pension rise

Final pandemic payment in March but pension rise is a maybe

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WINNERS AND LOSERS: Age and disability pensioners are due to receive their final COVID payment and possible pension increase in March. Self-funded retirees miss out. Image: Shutterstock

WINNERS AND LOSERS: Age and disability pensioners are due to receive their final COVID payment and possible pension increase in March. Self-funded retirees miss out. Image: Shutterstock

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Economic support payment heading for bank accounts in March.

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Many older Australians can look forward to a financial boost in late March with the final $250 economic support payment heading for bank accounts and a possible, albeit small, increase in the age pension.

The economic support payment follows payments made last year to bolster the economy.

Those eligible are recipients of an age pension, carer allowance, carer payment, disability support pension, double orphan pension and family tax benefit, and holders of Pensioner Concession and Commonwealth Seniors Health Cards.

Pensions traditionally increase on March 20 and September 20 and are determined by the higher of increases in the Consumer Price Index (CPI) or the Pensioner and Beneficiary Living Cost Index; and benchmarked against movements in Male Total Average Weekly Earnings.

The CPI for the September-December 2020 quarter rose by 0.9 per cent and by 1.6 per cent for the three months before that, which may initiate a small increase to the pension rate.

The last indexed increase was in March last year when pensions rose $10.20 per fortnight for singles and $7.70 for each member of a couple, excluding supplements. There was no increase in September as the pandemic crippled the economy.

Lobbying

Advocacy groups have been lobbying for an overall increase in the age pension for some time, citing the high rate of pension poverty.

The Retirement Income Review report released in November noted many retirees, in particular those who rent, are in severe financial stress.

Advocates say rental assistance of around $139.60 a fortnight for a single person with no dependents is nowhere near enough in today's market, however the review said increasing the rate of commonwealth rent assistance would only have a small impact and another approach was required.

Anglicare research last year showed that nationally only about 2.7 per cent of private rentals are affordable for a couple and less than 1 per cent for a single person on an age or disability pension.

Additional monies received by pensioners this month will be cold comfort for self-funded retirees who have received no financial assistance during the pandemic despite seeing investment returns plummet.

"Retirees who partly or fully fund their own retirement have suffered significant income reductions as a result of the adverse economic impact of COVID-19," Association of Indendent Retirees president Wayne Strandquist said late last year.

"They have been overlooked by the government."

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