Pensions to rise. How much will you get?

Helen has done it tough at times in her 82 years. The intelligent, articulate former accountant brought up a daughter on her own, and found herself homeless for four years in her 60s after being made redundant and having to sell her house. She now lives in community housing and pays $480 a fortnight in rent.

She admits that the recent sky-rocketing cost of living has made any attempt at a comfortable retirement impossible.

"Every week costs go up and you find you can't buy what you bought last week and of course you've still got bills to pay," she said.

"I used to cook my porridge with milk, now I use water. I've given up all my insurances, I can't afford red meat or fish. I don't get my hair done anymore and I haven't been to the dentist in years - I can't afford it.

It was announced this week that people on the age pension, disability support pension or carer payment will receive a rise of $19.60 a fortnight for singles and $29.40 for couples bringing the maximum fortnightly pension to $1116.30 (single) and $1682.80 (couple) including supplements.

The increase is based on a 1.8 per cent six monthly Consumer Price Increase and will take effect from March 20. The last increase was in September and reflected a 3.2 per cent increase.

Social security indexed increases are based on which ever is higher - the CPI or the Pensioners and Beneficiary Living Cost Index and are benchmarked against the Male Total Average Weekly Earnings.

CPI measures changes in the cost of a select range of expenses, known as a 'basket'. This 'basket' is updated yearly to make sure that it reflects household spending patterns.

However, according to seniors' advocates Combined Pensioners and Superannuants the rise was disappointing. "For a single pensioner an increase of less than $10 a week is a drop in the ocean while you are trying to keep up with expenses," said policy manger Ash Fowler.

"The current method of indexing social security payments just doesn't work. For people on low incomes inflation is going to hit harder and it's going to hit faster because they don't have a financial buffer."

CPSA would like to see an increase to the base rate of all income support payments and quarterly indexation.

Jo Montero from Fair Go For Pensioners was scathing of the increase. "The rise is being used to pretend that this group of pensioners are getting good deal. The truth is that they are still being cheated. This miserly rise is an equivalent of two cups of coffee and a newspaper and does little to address years of decline.

"Age pensioners are angry, feel cheated, disrespected, and discarded. After all, this is the generation that spent a lifetime working to build this country and paid tax. The nation owes them the right to spend the last part of their life in dignity and reasonable comfort."

National Seniors Australia chief executive Chris Grice while welcoming extra dollars in the pockets of pensioners said, "it won't be for long as continued cost of living pressures build especially for more than 325,000 Australians aged over 65 who rent.

"Unfortunately, the increase to the maximum rate of Commonwealth Rent Assistance (CRA) of $3.40 per fortnight simply isn't enough. According to the ABS, rents were up 7.4 per cent in the year to January compared to 3.4 per cent for overall inflation (which is used to index CRA)."

Mr Grice said NSA would like the maximum rate of CRA to be increased and indexation for this payment tied to changes in rental prices rather than overall CPI.

Other payment increases from September 20 include a fortnightly increase of $14.40 to $816.90 for JobSeeker recipients over aged 55 after 9 months on the payment.

The pension disqualifying income limit increases to $2436.60 single (up $39.20 p/f) and $3725.60 couple combined (up $58.80).

Pension disqualifying assets limits also increase - single homeowner $674,000 (up $6500), single non homeowner $916,000 (up $6500); couple combined homeowner $1,012,500 (up $9500), couple non homeowner $1,254,500 (up $9500).

More information on March 2024 indexation is available on the Department of Social Security website dss.gov.au and searching for "Social Security Rates Indexation".

*Not her real name.