Welfare indexation to cost taxpayers another $2.2bn

The latest indexation of welfare payments in Australia will boost support for five million Australians at a cost of $2.2bn to the federal budget.

The age pension is one of a raft of welfare payments about to be boosted by indexation.

Recipients of the age and disability support pensions, carers and single parents are among the five million Australians who will receive boosts to their payments this month as indexation is applied to the benefits.

Other beneficiaries include those receiving JobSeeker and Commonwealth Rent Assistance.

The additional indexation payments will cost the budget an extra $2.2bn a year, or $84.4m a fortnight.

Calculated on a 1.8 per cent CPI rise over the six months to December, the new indexation will see more than 3.3 million age and disability support pension recipients receive an additional $19.60 a fortnight for singles and $29.40 a fortnight for couples combined.

It will bump up their maximum rate of pension to $1,116.30 a fortnight for singles and $1,682.80 a fortnight for couples.

For the almost 800,000 people on JobSeeker the fortnightly payments will be boosted by $13.50, taking it to $771.50, including the energy supplement.

The parenting payment for singles, claimed by more than 300,000 parents, has now hit the $1,000 per fortnight mark, with the new indexation adding $17.50.

And Commonwealth Rent Assistance, claimed by almost 1.4 million people, will rise by $3.40 to $188.20 per fortnight for single income support recipients.

Social services minister Amanda Rishworth said the increases would help millions of Australians with the current cost of living pressures.

“Our number one priority is addressing inflation and cost of living pressures. These challenges highlight the importance of regular indexation to ensure that payment recipients have more money in their pockets for everyday expenses,” Ms Rishworth said.

Social Services Minister Amanda Rishworth. Picture: NCA NewsWire/Martin Ollman

“Pension recipients are some of the most vulnerable members of our communities, many having worked all their lives contributing to our society or caring for a loved one.”

The indexation occurs twice a year, but Ms Rishworth noted some payments had also been boosted in last year’s federal budget, including student payments and rent assistance.

She also noted the government had expanded eligibility for the parenting payment single so single parents with a youngest child aged under 14 would still receive the payment, a change from the previous cut off of eight years old.

Despite the increases, welfare organisations remain concerned that the current payment rates remain too low to stave off poverty for millions of Australians.

Australian Council of Social Service chief executive Cassandra Goldie last week urged a Senate committee to recommend a significant hike to income support and social security payments.

“People cannot survive on $54 a day, the rate of JobSeeker, and are forced to choose between eating, buying medicine and paying the bills,” Dr Goldie said.

“The first priority for ending poverty is to lift income supports so they are adequate to meet the cost of living. We must urgently raise the rate of JobSeeker and related payments to the pension rate of at least $78 a day.”