The single age pension will likely rise by about $23 a fortnight from September 20.
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Advocates are forecasting about a 2.2 per cent increase based on Consumer Price Index figures for the first half of the calendar year.
This would mean the single pension would rise to $1087 per fortnight and the couple's combined pension by $35 to $1639 per fortnight (including supplements).
The exact increase will not be known until the Centrelink bean counters have calculated differences between living cost indexes.
Centrelink compares the CPI and the Pensioners and Beneficiary Living Cost Index then applies whichever is the higher for the pension increase.
Making the forecast, the Combined Pensioners and Superannuants Association said annual inflation now stands at 6 per cent, down from the 7 per cent figure for the March 2023 quarter.
![Rising grocery prices have hit budgets hard. Picture Shutterstock. Rising grocery prices have hit budgets hard. Picture Shutterstock.](/images/transform/v1/crop/frm/zFAiTDuEg3GdzaaJJ3MGNK/6ce7b28e-0fa0-4839-8669-803db6a60898.jpg/r0_463_4431_2954_w1200_h678_fmax.jpg)
"This is good news for all Australians, but it also means that the half-yearly pension increase will be lower than before," it said in an article on its website.
Following this week's passing of the Social Services and Other Legislation Amendment (Strengthening the Safety Net) Act 2023, older unemployed people will also be better off from September 20 with a budget promised $40 per fortnight rise in JobSeeker payments plus a 2.2 per cent CPI increase.
The age at which a higher rate of JobSeeker is paid after nine continuous months on the payment will also be dropped from 60 to 55.
For example, a person over 60 after nine months on JobSeeker currently receives $745.20 per fortnight. This will rise by $40 to $785.20 plus a 2.2 per cent CPI increase, taking it to $802.50.
A person aged 55-59 after nine months on JobSeeker who currently receives $693.10 will see their payment rise to $802.50. This will affect about 52,000 recipients.
The JobSeeker rate for singles (no children) under 55 will increase from $693.10 to $749.20.
A statement from Social Securities Minister Amanda Rishworth said the higher level of support for older recipients on JobSeeker, the majority of whom are women (55 per cent), acknowledges the additional barriers they face when looking for work, such as age discrimination or poor health.
There will also be a 15 per cent increase to rent assistance with about 1.1 million households better off by, on average, $24 per fortnight.
Those who need help the most
National Seniors Australia chief advocate Ian Henschke welcomed the rise in rent assistance. "The people who are suffering the most on the pension are those single people who are renting," he said.
"You have to give the most help to those who need it the most."
Mr Henschke also welcomed the decision to reduce the age at which people could receive the higher rate of JobSeeker.
However, he said it was disappointing the government had still not adopted the organisation's Let Pensioners Work proposal which would allow pensioners to keep a greater amount of their work earnings before the age pension was cut, helping alleviate pension poverty while reducing the job vacancy rate.
The Australian Council of Social Service also welcomed the passing of the Bill but said the JobSeeker increase was well below the $76 a day rate it had called for and below the Economic Inclusion Advisory Committee's finding that an adequate unemployment rate would mean raising JobSeeker to 90 per cent of the age pension.
"While any increase is a step in the right direction, this marginally increased JobSeeker rate is still a poverty payment and will not stop people going without essentials like food and heating," chief executive Cassandra Goldie said.
"We remain committed to working with members of parliament to secure further increases to income support."
Where are your pension dollars going?
If you feel your pension dollars are not stretching as far as they used to, you are not wrong.
Higher prices for insurance, food and housing contributed to increased living costs for all household types.
Insurance premiums rose across house, house contents and motor vehicle insurance. Meals out and takeaway foods and fruit and vegetables contributed to the rise in food costs and strong demand for rental properties amid a tight rental market contributed to the rise in housing costs.
Australian Bureau of Statistics head of prices statistics, Michelle Marquardt, said annually, food prices rose between 7 and 8 per cent, utilities prices rose between 12 per cent and 14 per cent, driven by higher wholesale prices for gas and electricity being passed on to consumers.
CPI figures released this week showed food went up by 1.6 per cent in the June quarter following increases of 1.6 per cent and 0.9 per cent in the March 2023 and December 2022 quarters. Alcohol and tobacco went up 1 per cent, insurances went up 3 per cent.
As inflation begins to trend downwards pension increases after the September 2023 indexation will be smaller.