The highlight of the 2009/2010 Federal Budget is a $32 weekly increase in the single Age Pension.
From 20 September 2009, single pensioners can expect to see an extra $64.98 in their fortnightly Age Pension, which is a weekly increase of $32.49. This Age Pension increase is made up of an additional $30 per week in base pension, and an extra $2.49 a week in a new fortnightly ‘Pension Supplement.
Note that this increase is for single Age Pensioners who receive the full Age Pension only. Couples on the full Age Pension can expect a more modest increase of $20.28 a fortnight (per couple), that is, a weekly increase of $10.14 (per couple).
When the changes take effect, the single Age Pension rate will be $336.68 per week ($673.36 per fortnight), the equivalent of two-thirds the increased combined couple rate of $507.50 ($1015 per fortnight).
In annualised terms, the full Age Pension works out to be around $17,555 for singles, and $26,463 for couples.
Recipients of the Veterans’ Service Pension, War Widows Pension, Carer Payment and Disability Support Pension also receive the pension income boost.
Note: What is not yet clear from the Budget papers is whether the single Age Pensioners also receive the six-monthly indexation that normally takes place on 20 September 2009, and if they do, whether the indexation applies to the current Age Pension rates, or the rates after the one-off increased are implemented.
New price index for indexing Age Pensions
From September 2009, the Government is introducing a new price index, to measure price changes for adjusting the Age Pension and other pensions mentioned earlier. The index is called the Pensioner and Beneficiary Living Cost Index, and it is designed to index base pension rates when the living cost index is higher than the Consumer Price Index (inflation). The CPI will still be used to index income and assets test thresholds.
Increase in Age Pension benchmarking
Under new arrangements, the single rate of the Age Pension will be set at 27.7 per cent of Male Total Average Weekly Earnings. The Age Pension will also be increased in line with the higher of the Pensioner and Beneficiary Living Cost Index, or the CPA.
Background: The single rate of Age pension is currently benchmarked to 25 per cent of Male Total Average Weekly Earnings. What this means is that the Age Pension is set at 25 per cent of Male Total Average Weekly Earnings if CPI indexation produces a lower pension rate.
NOTE: The latest rates are now available. You can find these rates and new thresholds in the article Age Pension: September 2009 rates and thresholds now available.
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Copyright Trish Power
Hi - I'm Trish Power and I am the author of
Hallo Trish Can you clear up the following please. The current single age pension rate is set at $569.80pf you state the new rate will be $673.36pf if the new rate goes up $32.49 per week ie$64.98pf is not the new total $634.78pf? regards john
These figures, sourced from the Government’s ‘Secure and Sustainable Pensions’ publication include a consolidated pension supplement, which is to be paid as part of the fortnightly pension payment, rather than as individual allowances paid in fortnightly or quarterly instalments. From September 2009, in effect, the Age Pension will be a composite payment representing the standard pension payment, and a pension supplement that consolidates existing allowances and includes a $2.49 per week increase. The Age Pension will also be increased in line with six-monthly changes to the cost of living. I explain the increase in the Age Pension rates in more detail elsewhere on the site.
Dear, Trish Power
I would like to have some kind of understanding regarding the federal government and the treasurers decision regarding aged pensions, e.g. to discriminate between married people or couples or still in partner mode, we all have the same astronomical grocery rates electricity water health and other day to day expensive money problems. Alternatively, is it that the coupled aged pensioners are entitled to a special discount that the federal government has not advised us of, so what the government is saying in short sometime soon this will apply to the entire work force. Should a couple both be working and the organisation they work for see fit to bestow a pay rise on their workers. E.g. married or partner couples will then receive less than half than that of a single worker, discriminated because of their choice to marry or to live in a partner lifestyle, which equates to the same here at statement and decision by our out of touch government and treasurer. I made known my displeasure to the PM and our local federal minister, the federal minister his answer was the decision has been made and that is that basically if you have a problem paying your rates or other bills talk to those who are sending you the bills. From the time this pay rise was talked about and even before it was announced, the following services commenced their rip off local councils raising the rates electricity water groceries well the list is endless. As a result, the poor old pensioners they are now well behind, and as for the married or coupled pensioners, they are deeper in the black hole this is reality.
Evidently, politicians and their advisors live in a very different world to that of the remainder of the population.
Best Regards
D. Goggin
Hi David
You make some valid comments on the issue of why couples should get double the single rate. The current thinking, and what has come out in some studies, is that it is cheaper for two to live than for one. Now, that is a different issue as to whether the Age Pension rate is adequate for a couple which many would argue that it isn’t adequate.
For the costs of living for single and couples, you can check out the ASFA-Westpac Retirement Standard ( http://www.superannuation.asn.au/RS/default.aspx )
The Government’s Pension Review explored the issue of adequacy for couples on the Age Pension. You can see what this review had to say by clicking on the following link
http://www.fahcsia.gov.au/about/publicationsarticles/corp/BudgetPAES/budget09_10/pension/Documents/Pension_Review_Report/part3.htm
Regards, Trish