Hunger games crisis as living costs outstrip pensions

So the March half-yearly indexed pension increase will be keenly awaited by many ... but will it be enough?

September's increase of $38.90 p/f including supplements (approximately 4 per cent) went some way to ameliorate the rapid increase in living costs, but as is always the case, was retrospective, meaning older Australians had been already paying the higher costs.

And inflation has marched on since September leaving consumers, particularly those on restrictive fixed budgets to tighten their belts still more.

Indexed pension increases are based on either the CPI or the Pensioner and Beneficiary Living Cost Index and weighted against the Male Total Average Weekly Earnings.

Paul Versteege from Combined Pensioners and Superannuants Association calculates March indexation will produce a fortnightly increase of just short of $38 for singles and $58 for couples on full rate pensions based on the increase in the CPI from July 1 to December 31, 2022.

However, he warned, "By the time these pension increases take effect, pensioners will have been covering cost-of-living increases for almost nine months out of their 'old' pension. In times of high inflation this is particularly unfair for those pensioners without any other source of income than the pension".

CPSA had written to the federal government asking for this anomaly to be addressed, But Mr Versteege said judging by the answer from the Social Services Minister, there was no appetite for addressing it.

A letter to CPSA from the office of Social Services Minister Amanda Rishworth rejected the idea of a prospective indexation system.

"Due to the complexity of the economic environment, accurately projecting movement in CPI and wages in difficult," said the letter.

"If we had a system of prospective indexation we would need to either claw back or top-up payment rates when forecasts were too low.

"This would be disruptive to recipients and could lead to confusion about how the indexation process operates."

Ian Henschke from National Seniors Australia said the rising cost of living had only exacerbated an already dire situation.

"For pensioners barely having enough to cover the necessities, including housing, the amount is important but so too is frequency."

National Seniors is calling for payments to be indexed every three months.

"Waiting for an increase when living costs have been high for six months is playing catch up the hard way," he said.

National Seniors is also calling for a two-year trial for pensioners who want to work more.

"We need a New Zealand style system that eliminates Centrelink reporting and requires pensioners to pay an agreed rate of income tax. We suggest 32.5 cents in the dollar. It's simple, fair and will help solve the workplace shortage," said Mr Henschke.

Jo Montero, president of Fair Go for Pensioners which is campaigning for a review of the age pension system and a different method of calculating increases, said, "The Age Pension has been shrinking in real terms. There is not enough to live in a decent home and have the basic necessities for a standard of living in line with Australian community standards. In fact, the standard of living is going downwards, in the face of the rising cost of living."

FGFP wants to see the single age pension increased to $1200 p/f in the next budget. "There is also a need for a fair and just mechanism that will keep on maintaining it there. The present system does not do this, and it is being manipulatively used to do the opposite," he said.

In the September to December 2022 quarter food and non alcoholic beverages went up 0 .9 per cent, alcohol and tobacco 1.2 per cent, clothing 2.16 per cent, housing 1.9 per cent, health 0.8 per cent, transport 1.7 per cent and recreation 5.4 per cent.

The Foodbank Hunger Report 2022 revealed alarming details surrounding the food insecurity crisis the country is facing.

More than two million households in Australia ran out of food in the last year due to limited finances, sometimes skipping meals or going whole days without eating.

The rising cost of living was the most common reason given, with food and groceries prices confirmed as the top cause of households struggling followed closely by energy and housing costs.

Research showed more than half of food insecure households had someone in paid work and a third of households with mortgages had experienced food insecurity.