Age pension rates to rise, but many older renters still suffering

Extra government cash will flow to more than 5.5 million people in a fortnight but it’s not enough for some. See the list of who gets what.

This month’s age pension increase for almost 2.6 million seniors has skipped ahead of inflation, although it fails to cover all rising costs for many older people – especially renters.

The indexation of pensions and other payments from September 20 will deliver a single age pensioner an extra $32.70 per fortnight and a couple $49.40, giving them a bigger rise than Consumer Price Index increases.

However, seniors advocates say more is required for those in need, including the ability to work more after retiring without being penalised.

The age pension is indexed twice-yearly along with other Centrelink payments, and reflects either increases in the CPI or the government’s separate Pensioner and Beneficiary Living Cost index – whatever rises the most.

For the six months to June 30, the PBLCI was sharply higher than the CPI, at 3.2 per cent versus 2.2 per cent, while annually it was up 7 per cent versus 6 per cent.

The increase brings the single age pension to $1096.70 per fortnight, while each member of a couple will get $826.70. There has also been a 15 per cent increase in Commonwealth Rent Assistance, rising $27.60 to $184.80 per fortnight for a single and by $26 to $174 per fortnight for a couple.

National Seniors Australia chief advocate Ian Henschke said it was “a good start but more needs to be done to help renters”.

“We recently heard from a couple paying $920 a fortnight in rent,” he said.

“As pensioners, this leaves them with only $907.40 a fortnight to pay for food, fuel, utilities and other expenses.”

National Seniors Australia research found almost 40 per cent of older renters were experiencing “severe” cost-of-living impacts, compared with 11 per cent of older homeowners.

It wants a change to the income test for pensioners who want to work or work more.

“This could be achieved by reducing the taper rate from 50c to 32.5c in the dollar to align with the tax system,” Mr Henschke said.

“It’s simple, fair, will help solve critical workforce shortage and boost the budget bottom line.

“What we need is additional targeted support for people with limited means and to stop punishing those who need to work.”

Later Life Advice founder Brendan Ryan said the pension indexation flowed through to several other areas including asset and income test limits.

“It could change the whole equation if you are someone who is working at pension age,” he said.

Seniors should do their sums to understand their entitlements. Picture: iStock

The indexation also affected the government’s home equity access scheme, and could benefit seniors by enabling them to draw a higher income, “but people who don’t have property get nothing”.

Mr Ryan said people should try to be on top of the changes and know what they were entitled to, even though it could be confusing.

“It’s a complicated system with a complicated bunch of calculations, and each time it changes it may mean people get an entitlement to the pension that they haven’t before,” he said.

The federal government said more than 5.5 million Australians would receive increases to pensions and income support payments from September 20. Recipients include 2.59 million age pensioners, 773,000 people on a disability support pension and 804,000 people received JobSeeker payments.

Originally published as Age pension rates to rise, but many older renters still suffering