Effective from 20 March 2025, Australia’s Age Pension payments will experience a modest increase. This adjustment is part of the biannual indexation process aimed at aligning pension rates with inflation and cost-of-living changes.
Updated Fortnightly Payment Rates
The forthcoming adjustments will result in the following changes to fortnightly Age Pension payments:
| Recipient Category | Current Total Payment | New Total Payment | Increase per Fortnight |
|---|---|---|---|
| Single | $1,144.40 | $1,148.92 | $4.52 |
| Couple (each) | $862.60 | $866.01 | $3.41 |
| Couple (combined) | $1,725.20 | $1,732.02 | $6.82 |
| Couple (illness-separated) | $1,144.40 | $1,148.92 | $4.52 |
Note: Figures are approximate and subject to official confirmation.
Components of the Age Pension
The Age Pension comprises three main components:
- Maximum Basic Rate: The core payment amount.
- Pension Supplement: Assists with daily household and living expenses.
- Energy Supplement: Provides additional support for energy costs.
The upcoming increase primarily affects the Maximum Basic Rate and the Pension Supplement. The Energy Supplement remains unchanged.
Indexation Process and Factors
The Age Pension is adjusted biannually, in March and September, to reflect changes in the cost of living. The indexation process considers the following indices:
- Consumer Price Index (CPI): Measures overall inflation.
- Pensioner and Beneficiary Living Cost Index (PBLCI): Reflects cost changes specific to pensioners and beneficiaries.
- Male Total Average Weekly Earnings (MTAWE): Ensures pensions maintain a certain percentage of average earnings.
The pension rates are adjusted based on the highest movement among these indices. For the period leading up to March 2025, the CPI increased by 0.4%, and the PBLCI by 0.2%, leading to the forthcoming adjustments.
Impact on Pensioners
While any increase in payments is beneficial, the forthcoming adjustments are relatively modest. For singles, the increase equates to an additional $4.52 per fortnight, and for couples, an extra $6.82 combined per fortnight.
This increment may not significantly alleviate the financial pressures faced by many pensioners, especially considering rising living costs.
Adjustments to Income and Asset Thresholds
Alongside payment increases, the income and asset thresholds that determine Age Pension eligibility will also be adjusted from 20 March 2025. These adjustments aim to ensure that the pension system remains fair and reflective of current economic conditions.
Income Test Thresholds:
- Single: Full pension up to $212 per fortnight; part pension up to $2,500.80 per fortnight.
- Couple (combined): Full pension up to $372 per fortnight; part pension up to $3,822.40 per fortnight.
Assets Test Thresholds:
- Single Homeowner: Full pension if assets are below $314,000; part pension up to $695,500.
- Single Non-Homeowner: Full pension if assets are below $566,000; part pension up to $947,500.
- Couple Homeowner (combined): Full pension if assets are below $470,000; part pension up to $1,045,500.
- Couple Non-Homeowner (combined): Full pension if assets are below $722,000; part pension up to $1,297,500.
Note: These figures are subject to official confirmation.
Additional Considerations
It’s important to note that while the Energy Supplement remains unchanged at $14.10 per fortnight for singles and $10.60 for each member of a couple, other benefits such as Commonwealth Rent Assistance may also be adjusted.
Pensioners are encouraged to review their entitlements and stay informed about any additional support measures that may be available.
Pensioners are advised to monitor official communications from Services Australia for confirmation of the new rates and any additional information regarding their entitlements.
Staying informed will ensure that individuals receive all benefits to which they are entitled and can plan their finances accordingly.
FAQs
How often are Age Pension rates adjusted?
Age Pension rates are adjusted twice a year, in March and September, to reflect changes in the cost of living.
What factors influence the adjustment of Age Pension rates?
Adjustments are based on the highest movement among the Consumer Price Index (CPI), Pensioner and Beneficiary Living Cost Index (PBLCI), and Male Total Average Weekly Earnings (MTAWE).
Will the Energy Supplement amount change with the upcoming adjustment?
No, the Energy Supplement will remain unchanged at $14.10 per fortnight for singles and $10.60 for each member of a couple.