More than 4.7m Australians will get a pay rise on 20 March

Today Minister for Social Services, Amanda Rishworth, announced that on 20 March 2023 more than 4.7 million Australians will receive a much-needed increase to their social security payments. Minister Rishworth, said “Australia’s social security system exists to support our most vulnerable citizens, and we know they are feeling the pinch. Indexation is a pillar of our social security system and we want more money in the pockets of everyday Australians so they can better afford essentials. The increase is an important part of the system and helps those doing it toughest.”

Here’s some of the key changes:

Age Pension, Disability Support Pension and Carer Payment are all set to rise by $37.50 a fortnight for singles and $56.40 a fortnight for couples (combined). The maximum rate of pension will increase to $1,064 a fortnight for singles and $802 for each eligible member of a couple, if both members are eligible this means the couple will receive $1,604 per fortnight combined.

Age Pension, Disability Pension and Carer Payment 

Rent Assistance

Rent Assistance will increase to $157.20 per fortnight for singles an increase of $5.60. While couples will receive $148.00 per fortnight, an increase of $5.20. The rent thresholds will also be increasing.

Rent Assistance Payments and Thresholds

*Different rates and thresholds apply to couples separated by illness, people with children and sharers.

Increases to pension payments will also see an increase to income and asset cut off points, meaning some people may now qualify for a pension who were previously not eligible. 

The asset and income thresholds remain the same, however the cut off points have increased.

Assets Test

Income Test

While an increase in payments will be welcome news, the fact that pensions are only indexed twice a year means that the increase today is to cover the rising costs they have been meeting for the last 6 months. National Seniors Chief Advocate, Ian Henscke, is calling for a change to the indexation cycle during periods of high inflation. “The Federal Government should index the pension every three months during times of high inflation to help those most vulnerable,” Mr Henschke said. 

“Pensioners will welcome today’s increase yet rightly worry there won’t be another rise in payment until September. They’ll have to wait six months and then play catch-up again. The increase in pension is because the cost of living has been driven by an inflation rate of 7.8% over the past six months." 

Bruce Bradbury, Associate Professor at University of New South Wales is calling for a doubling of Commonwealth Rent Assistance. The current rates of rent assistance mean that you don’t receive any assistance on rent you pay beyond $169/week for singles or $205/week for couples, a long way short of most rents. A.Prof Bradbury thinks the government needs to adopt the Henry Tax Review (2009) recommendations and link rent assistance to rent prices for the 25^th percentile of one and two bedroom dwellings in capital cities. Based on his calculations this would mean more than doubling the rent assistance payment to around $215/week for singles.

Changing the timing and the indexation of payments would mean they more accurately reflect the costs people are facing. I’m sure many pensioners will see the 20 March increases in payments and feel like they don’t match the increases they are seeing in food, utilities and accommodation costs.