Rising living costs have hit just about everyone’s budget, but few as much as those living on the Age Pension.
Across the country, Australians are looking at where they can cut back in order to absorb some of the eye-watering cost increases we’re seeing.
Automotive fuel, housing costs, groceries and energy have all experienced enormous jumps in 2022, particularly in the last quarter, fuelled by record inflation caused by the Ukraine-Russia war and ongoing effects of the pandemic.
Read: Age Pension rules for buying and selling a primary residence
While everyone might be feeling the pinch, for Australians living solely on the Age Pension the price increases are particularly difficult to absorb, which means many end up going without.
At just $987.60 per fortnight for singles, and $1488.80 for couples, sometimes there simply isn’t enough to cover the costs of even a modest lifestyle.
Although there is certain to be a pension increase in September, it is unlikely to keep up with inflation levels.
Paul Versteege, policy manager for the Combined Pensioners and Superannuants Association, told YourLifeChoices that as inflation continues to go up, the game of catch-up with high cost-of-living increases continues for those just above and just under the poverty line.
“Full rate pensioners are close to dropping below that line,” he said. “The recent indexation ([in March] compensated them for the loss of purchasing power over the six months prior to indexation. During those six months, people coped unaided with loss of purchasing power.
“One of the things … a review should look at is what structurally can be done to prevent social security recipients having to cover cost-of-living increases in the months before indexation.”
Read: How Australia’s pension rate compares with the world
Tribeca Financial chief executive Ryan Watson told the Herald Sun that older Australians living on a fixed income were “doing it tough” and should consider buying home-brand groceries and shopping around for a better deal on their energy suppliers.
“People will cut back and choose to be more conservative,” he said.
“The best thing they can do is understand what they spend and make conscious choices around that.
“It’s an opportunity to save hundreds of dollars a year.”
Read: What assets do I need to declare when applying for the Age Pension
But rather than put even more pressure on pensioners to tighten their belts, many experts say it’s time to raise the base rate of the Age Pension.
Before the election, the Greens campaigned to have the Age Pension rate doubled and the eligibility age reduced back to 65.
Unfortunately, neither of the major parties would commit to any more than the regular indexation increases, although Labour did commit to not raising the eligibility age any further.
It seems real relief for age pensioners is still out of reach.
Price rises impacting pensioners the most:
Petrol – up 11 per cent
Meat and seafood – up 4.8 per cent
Toilet paper and paper wipes – up 6.7 per cent
Fruit and vegetables – up 6.6 per cent
Coffee and tea – up 6.2 per cent
Pharmaceutical products – up 5.7 per cent
Bottled water and soft drinks – up 5.6 per cent
Household appliances – up 5.6 per cent.
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