On March 20, 2025, Age Pensioners and other recipients of government support in Australia will see an increase in their payments to keep up with inflation.
This biannual adjustment, occurring every March and September, ensures that payments reflect the higher of two inflation measures: the Consumer Price Index (CPI) and the Pensioner and Beneficiary Living Cost Index (PBLCI).
Estimated Increase in Age Pension Payments
While the exact figures will be officially announced in early March, current estimates suggest a modest rise in Age Pension rates.
This anticipated increase is significantly lower than the adjustments made in September 2024, reflecting a notable reduction in inflation over this period.
Factors Influencing the Modest Increase
The smaller increase in March 2025 compared to previous adjustments is primarily due to a significant reduction in inflation rates.
The annual rate of inflation has eased to 2.4% for the 12-month period from January to December 2024, down from 3.8% in the previous period.
National Seniors Australia’s Advocacy for Pensioners
Recognizing that many pensioners may find the modest increase insufficient to meet rising living costs, National Seniors Australia (NSA) has proposed several measures to better support older Australians:
- One-off Increase to the Base Rate of the Age Pension: NSA recommends a one-off increase of $10 per day for single pensioners and $15 per day for couples to ensure a basic standard of living.
- Freezing Deeming Rates: To prevent pensioners from being unfairly penalized due to high-interest rates, NSA suggests freezing deeming rates while interest rates remain elevated.
- Introducing a Pensioner Concession Card+ (PCC+): This initiative aims to provide additional concessions and support to Age Pensioners with limited means, such as higher concession rates on energy, council rates, and medicines.
- Encouraging Workforce Participation: NSA advocates for exempting employment income from the Age Pension income test to encourage older Australians who wish to work without affecting their pension benefits.
Additional Government Measures
In response to ongoing cost-of-living pressures, the Australian government has introduced other measures to support pensioners:
- One-time $750 Payment: In February 2025, eligible pensioners received a one-time payment of $750 to provide financial relief amid rising living costs.
- Upcoming Changes to Aged Care Funding: From July 1, 2025, aged care fees will change, affecting both government contributions and individual payments. These changes aim to create a more balanced and fair system for older Australians.
While the upcoming increase in Age Pension payments on March 20, 2025, is modest due to lower inflation rates, it is a crucial adjustment to help pensioners maintain their purchasing power.
Advocacy groups like National Seniors Australia continue to push for more substantial support to ensure that older Australians can enjoy a comfortable and secure retirement.
FAQs
When will the new Age Pension rates take effect?
The new Age Pension rates will take effect on March 20, 2025, following the biannual indexation process.
How is the Age Pension increase calculated?
The increase is based on the higher of two inflation measures: the Consumer Price Index (CPI) and the Pensioner and Beneficiary Living Cost Index (PBLCI). The adjustment ensures that payments keep up with inflation.
What should pensioners do if they find the increase insufficient to meet their living costs?
Pensioners facing financial difficulties are encouraged to explore additional government support programs and concessions. They can also reach out to organizations like National Seniors Australia for guidance and advocacy on their behalf.