Time to read : 5 Minutes
Every March and September the Government adjusts the Age Pension to allow for the rising cost of living – which is, of course, a very good thing to do.
It is predicted to be one of the biggest increases in history.
Treasurer Jim Chalmers said,
“We understand that pensioners are doing it incredibly tough when it comes to their costs of essentials like groceries, electricity and petrol and in other parts of the household budget... We don’t want to see pensioners fall further and further behind. And that’s why this indexation which tries to keep up with the skyrocketing cost of living is so important.”
What you need to know?
The trouble is that the expected 4% rise is not close to covering the surge in costs that pensioners (and all of Australia) are experiencing.
The Australian Bureau of Statics Cost of Living Index showed the cost of living for employees and self-funded retirees rose 1.5 per cent in the second quarter.
Centrelink bases the pension rise on whichever is higher, the Consumer Price Index (CPI) or the Pensioners and Beneficiaries Living Cost Index (PBLCI).
Between January and June this year, the CPI was higher at 4% vs 3%.
According to figures obtained by the Daily Telegraph the $900.80 basic rate age pension will go up by at least $25.50 a fortnight.
The increase in March was $20.20 a fortnight, and the biggest increase in nine years.
Bottom line
The pension is still playing a catch up game with the inflation and pensioners will continue to do it tough.
As one Your Life Choice reader said so aptly, "It must be recognised that living expenses for those on fixed incomes like Job Seeker, and Disability and Aged Pensions, continue to be left behind."
Go deeper:
September Age Pension review: How much extra will you be paid?
Financial Disclamir:
The information contained on this web page is general in nature and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
