Soaring inflation could result in major fortnightly pension, welfare increase in September

Pensioners and welfare recipients struggling to make ends meet will soon receive one of the biggest increases to their fortnightly payments in a decade. Here’s how much more you could get.

Pensioners and other welfare recipients struggling to make ends meet amid soaring cost of living will soon receive one of the biggest increases to their fortnightly payments in at least a decade.

Though inflation has dramatically increased the costs of basic goods, figures obtained by The Daily Telegraph show Australians on welfare payments including the pension, Jobseeker and Youth Allowance will receive a significant boost when rates are indexed in September.

Assuming the growth in Consumer Price Index (CPI) in the June quarter is between 2.8 and 4.8 per cent, Australians currently on the $900.80 basic rate Age Pension would receive as much as $43.20 extra a fortnight.

Modelling shows at the very least the pension payment would go up by $25.50 – significantly higher than the last increase.

Six months ago the pension increased by $20.20, which was the largest jump in about nine years.

The basic Age Pension will increase by between $25.50 and $43.20 per fortnight in September depending on final inflation figure.

Combined the two increases would ensure welfare payments kept up with the 5 to 7 per cent headline inflation rate for the year to the end of the June quarter.

Based on the same CPI ­assumptions, the current Jobseeker rate of $642.70 per fortnight would increase by at least $18.20 and as much as $30.80, while Youth Allowance would be boosted by ­between $8.90 and $15 on top of the $313.80 current rate.

All welfare recipients will get a boost to help keep up with rising cost of living in September. Picture: NCA NewsWire/Luis Enrique Ascui

The final indexation will be determined in September, with the extra cash expected to help Australians on welfare meet the rising cost of groceries, fuel and other necessities.

Council on the Ageing chief executive Ian Yates said pensioners should expect a “very robust” increase, which would be “strongly welcomed”.

“We are certainly looking forward to the increase, particularly as so many of the things most impacted by inflation are basic goods,” he said.

But Mr Yates said if ­inflation continued to soar, older Australians who rely ­entirely on the pension as their only source of income would feel the pain of higher prices again soon as the indexation was only retrospective.

Ian Yates says the increase to the pension will be welcomed by millions of older Australians Picture: AAP Image/James Elsby

“Given indexation is six-monthly, it can mean pensioners get squeezed pretty badly,” he said.

National Seniors Australia chief advocate Ian Henschke said indexation of the pension would benefit millions of ­retirees, but other options to boost the wages of older people should not be discounted.

“The federal government must look at adjusting the pension system to allow pensioners to work more without losing their pension,” he said.

Mr Henschke said with job vacancies in Australia jumping by 100,000 in the past six months to 480,000 positions available as of June, pensioners represented a “standing army” of potential workers.

“Even if it’s only a Covid measure for the next three years, it should be considered,” he said.

Originally published as Soaring inflation could result in major fortnightly pension, welfare increase in September