Older Australians should keep their expectations modest when Age Pension payments are indexed next month.
The Australian Bureau of Statistics (ABS) announced its selected cost-of-living indexes yesterday, and the news isn’t good for pensioners.
The Age Pension is indexed twice a year, on 20 March and 20 September.
Base pension rates are indexed to the higher of the increase in the Consumer Price Index (CPI) and the Pensioner and Beneficiary Living Cost Index (PBLCI).
Age Pension prediction
The CPI rose only 0.6 per cent for the December quarter – the lowest rise since 2021 – and the PBLCI rose only 1 per cent for the December quarter.
However, the CPI rose 3.4 per cent in the 12 months to December and the PBLCI rose 4.8 per cent in the same period.
It is expected the Age Pension will be indexed to just under 2 per cent for the March increase. This represents about $18 per fortnight for singles and $27 per fortnight for couples.
It’s not much, but inflation is slowing.
What is the PBLCI and why does it matter?
The PBLCI was introduced in 2009, developed following the 2009 Pension Review, and tracks the spending by households whose income is derived principally from government pensions or benefits.
It is one of six specialised indexes the government produces, one of which is the CPI.
The PBLCI places different weights on the selected ‘basket’ of products sampled for the CPI. For example, education costs are weighted to 1.91 per cent in the PBLCI indexing and 4.43 for CPI, under the supposition older Australians probably don’t have too many education costs.
A report into the PBLCI quarterly result said the December 2023 increase was mainly due to electricity costs, following a fall in the previous quarter.
“In the September 2023 quarter, age pensioner, other government recipients and PBCLI households recorded falls in electricity due to the introduction of the Energy Bill Relief Fund rebates from July 2023,” the report stated.
“The rebates reduced electricity bills for these households in all capital cities.”
Rent assistance
Costs were also curbed by an increase in Commonwealth Rent Assistance (CRA).
From 20 September 2023, the maximum rate for CRA increased by 15 per cent on top of the CPI indexation that applies twice a year, reducing housing costs for eligible households.
The CRA is a payment for Centrelink recipients who live in private rental properties.
The rising cost of insurance also put pressure on all indexes in the Selected Living Costs Indexes report.
“Insurance prices rose with higher premiums across motor vehicle, house and home contents insurance reflecting higher reinsurance, natural disaster and claims costs,” the report stated.
Tobacco prices also rose due to the flow-on effects of the introduction of a 5 per cent annual excise indexation.
Do you think the consumer indexes are accurate? Are your payments keeping up with your costs? Why not share your experience in the comments section below?
Also read: Are you missing out on a retirement ‘bonus’?
No this data is wrong. We own our house yet our costs are still climbing, insurance, fuel, power, food etc. This government is killing our economy. What good are tax cuts to pensioners then we get a pittance of an increase.
It is delusionery to think that COL pressures are dissipating any time soon , add that to a big social spending government ( always are always will be) and we will remain in a cost squeeze for some time to come.
CPI is no longer a measure real cost of living -it hasn’t been near right since changes to its calculation in 1998. The ABS has admitted at several inquiries into CPI indexed pensions and how they have fallen behind massively, that the CPI was not a measure of increase in cost of living, simply a fudge factor to indicate how the economy is travelling.
Grocery costs of things pensioners actually buy have risen around 20% over the past year with some items such as pet food up by 50%. Most pensioners do have a pet.
Council rates are up 5% and pensioners rate concessions have not increased for over a decade. For our concessions to be their original value a rise of over 50% is required.
Insurances have increased by around 40% which is a lot of money.
A 2% increase is a sick joke as it means pensioners are going backwards.
The CPI figures they use are way out of touch with pensioners real expenses.
The CPI will NEVER be enough for pensioners with the way costs are trending. Unless new ways are used to calculate how much pensioners receive their increases each year, they will never keep up with costs. E.g. Rent up 40%, Insurance up 25%, Fuel up and down like a Yo-Yo, and food on the table costs well who knows? People who have worked, defended their Country, and paid their taxes are now treated as second-class citizens.
Nothing has changed for the better long term.
The current Federal Govt and State Govts are full of Hot Air.
Take Electricity for example. Wholesale electricity have dropped in price,
The Retail suppliers have increased their prices constantly (GREED)
Who runs the country? The Elected Govt or the Business Sector!
What a joke. Look at what the aged pension provided in 2000 and what it provides in 2024. It is just the government saying older people are a load on society, so let’s do whatever we can to get rid of those who rely on the aged pension for their survival. If pensioners can’t afford to eat, can’t afford medicine and can’t afford to go out or keep a roof over their heads, they’ll disappear and cease to be a burden on society. A heartless model, but we hear it from politicians and others all of the time. If we didn’t have savings and a generous family, we’d be suffering like so many. When pensioner can’t eat, can’t afford healthcare, can’t go out, worry about no home and can’t afford to go on, they just slide away. Well done to those who let it happen, but remember, your time will come.
Its actally polititions who are a burdon to society with their wage increases and pensions . Also migrants who dont work and have 6 kids , Have seen these families who contribute nothing to society, One such man who came here and said he gets migraines so cant work ,has a wife and 6 kids on Centrelink, . There was a pension fund too, but they spent that,
Three decades behind on Council rebates, insurances that have gone up 50%, grocery bills that have doubled for the same items we bought three years ago, fuel prices that have increased, car and home maintenance that has gone up 200%, and health services that are priced beyond reach; who are the people calculating a 2% increase kidding.
And they have had wage increases well beyond this as have their bosses, the politicians whose job it is to deliver a fair and equitable Australia. So why did the politicians who have made such a mess of Australia all get big increases?
They also seem to have missed that other assistance recipients (such as job-seeker) got a big increase not that long ago. Can’t see how a review a few months back justified an increase, but the pensioner review which was to be done to align with March, didn’t.
I agree with your comments about increases in ‘essential’ items.
Even with the $125 ($500 in total) energy relief allowance, my bill is still high, as I have on-demand hot water, and a very old reverse cycle (more than 30 years old!) air conditioner which only cools/heats the area directly in front of it, which does nothing for me when I sit to the right of the air, and freeze my left arm in summer, whilst the rest of my body ‘boils’ and heats too hot in winter whilst the rest of my body freezes.
Hi Sue, it’s time you changed you a/c system, plus change your power supplier to get off peak. Here in Tas. we are with Tasnetwork, (there is no other, it’s the only supplier here and we pay 32 + cents / kWhr on peak, and 15+ ceents off peak, the latter being from 10 am to 4 pm and from 9 pm to 7am the next morning, and from Friday 9pm to Monday 7 am ,yes all weekend is off peaky
PS If landlords were ‘made to’ install or upgrade to more energy efficient heating & hot water devices (read off-peak and newer split system air conditioners), then the ‘bill squeeze’ that is felt by renters would be so much less.
I have no off-peak, or a split system, so I’m paying so much more, and add to that a $40 a week increase, and it’s nearly ‘sink or swim’ for me.
JOB SEEKER GOT A %6 rise and single mothers got %15
I say single mothers because %92of single parents are female according to statistics
pensioners and the disabled and carers %3.2and it has been like this since covert started
if i was young enough i would have 10 children and tell them not to look for work as the GOVT WILL PAY YOU TO BLUDGE ON THE REST OF THE WORKING CLASS and will pay me to sit at home looking after all my little dole bludgers to be
I’ve said it before, and I’ll say it again.
To give pensioners a ‘real’ rise, get rid of all the COL benchmarks, and only work from the Total Average Weekly Male Earnings, and give the couple’s rate as 50% (up from the paltry 41.7% now), and the single’s rate 70% of the couple’s rate (up from 66.33% now).
The Rent Assistance ‘should be’ one week’s rent, not the paltry amount we’re given now ($184.80 max).
I have a budget that can’t cope with any increase, as I have no ‘wriggle room’ to be able to afford such a steep increase. No wonder it’s called the ‘rental squeeze’.
No wonder we are going backwards.
Unfortunately, the situation won’t change. We are blessed to have a younger generation who feel we have all been ‘lucky’ and ‘privileged’ because we are ‘boomers! So apparently, ‘we’ don’t have a mortgage (I do but then I was always unique) we have heaps in Super and investments (I didn’t work for the Govt) I did emigrate into Australia in my late 40’s without any cash. We did and still do work our backsides off. But we are lucky; we can earn extra each fortnight, which is a huge blessing. But we feel for anyone who can’t, especially if they rent and have health issues as well.
So what this means is the GOVT is saying inflation i[has gone up around %5over the last 12 months
WHATA JOKE The unemployed got more than that in their last increase in SEPTEMBER of %6
Single parents got 5 times that and received %15 increase
PENSIONERS %3.2
its about time pensioners got treated the same as other centrelinlk baby makers and professional bludgers as most pensioners paid their dues in taxes more than any of these other people who are getting rewarded for doing nothing for this country other than let the country reward them for doing nothing
So you wish to be dropped to the rate that people on Jobseeker receive? From the basic single rate of $1,002.50 to the basic single rate of $749.20.
Our rent has gone up 15% in the past 6 months and fuel is now 15% up from last month. How does an extra $9 a week help with those increased costs? Inflation still at 4.3% and with all the extra costs happening around the labor market there is no reason why that will decrease anytime soon. Tax cuts ? What tax cuts ? GST is still 10% !!
it`s a bloody insult.
I voted ( it would seem mistakenly) for Albo last election, _but i WONT BE NEXT ELECTION unless things improve.
He who supposedly came from an underprivelged background.
and now he`s forgotten all that.
he and his Government are full of lies just like all the rest.
Prop up the multimillionaires and stuff the one`s that are TRUELY in need.
typical pollies once they get elected , they couldn`t care less.
and they make themselves un available for obvious reasons.-( i wouldnt call them pigs because pigs are true).
Yes, he certainly has more rental properties in his portfolio than in mine.
It is time, in fact it is now necessary to do away with the Aged Pension and replace it with a UNIVERSAL PENSION. The current Aged Pension is no more than a poor effort twice a year to give pensioners, what I call the CATCH UP PENSION. It would seem the increase in the Aged Pension isn’t based on the increases that are occurring NOW. Increases in the Cost of Living (COL) from March to September, then September to March over a two year period, never reflects the reality of the continual rise of the Cost of Living expenses. Very, very seldom does the reverse ever apply when COL decreases. A Universal Pension does away with the hardship that most of us now have to endure.
Agree make pensions a percentage of the average salary though you would probably have to take into account average male/female salary. Not the current system we have had for too long and needs an overhaul.
I’m wondering why the Federal Government has given themselves the biggest pay increase for many years and the Public Servants are getting a pay increase due to cost of living and the rest of the country pensioners included are getting very little. The prices are never going down and a drop in inflation only means that your already high outgoings just didn’t rise by as much as the month before. I know that we have never had such a drop in living standards and the government obviously isn’t reading the room. They are oblivious to the ongoing costs of living in our country. Well we can think, remember and act accordingly the next election is coming just around the corner.
Aged Pensioners are being penalized beyond belief. The proposed March increase to the OAP is somewhat of a reflection of the disregard in which this government holds its older Australians.
I believe this government doesn’t really know how they can control Australia’s inflation. They perhaps don’t really care about what the true amount of inflation really is, as inflated prices equates to raking in more and more GST into their coffers. The higher the price, the more GST everyone pays.
I am getting too old to swallow some of the nonsensical ideas and opinions of many of our elected MP’s. Of course I will offend some when I say that we urgently need coal or gas fired base load power stations. I will go even further when I say EV’s may be great for city slickers, but I believe there is no place for EV’s to fulfil the needs of farmers & graziers living in rural and remote locations. Nor are EV’s capable of towing caravans and/or boats. EV’s couldn’t pull the skin off a rice pudding! To see Mr. Bowen pontificate on how EV’s are going to eventially replace all our present range of vehicles, makes me want to say “Tell him he’s dreaming”. It seems too many people get totally carried away with concepts and policies that haven’t been very well thought through!
I actually despair of any any current Labor Policies being of much overall assistance to those who don’t earn mega bucks. I thought Labor, at its very roots, was all about representing Working Class people, but apparently not this present Labor Party.
i thought this site is for comments and yet what gives you the right to dismiss them
my comment is not there so what didnt you like about it
Was their a lie in it or are you the one that decides what people should read
if its true then leave the message to be read
if its a lie remove it
I DO NOT MAKE THINGS UP
FACTS ARE FACTS ABD EVERYONE SHOULD KNOW THAT BOTH OF THE LAST 2 GOVTS ARE AND HAVE BEEN SHAFTING THE DISABLED ,THEIR CARERS AND THE AGED PENSIONERS prior to covert and even more so since
Hi Mitchell, can you tell us what comment you mean? I can see all that go through the system and I haven’t deleted any comments for weeks.
I can only agree with all the comments on this page (though Mitchells comment I cannot fully understand) it goes to show how O.A.Ps. are been taken for a ride maybe it would be good, if a politician could get on this page once a month and be open to answering our concerns and realising what exactly the facts are that affect pensioners and realise what we are having to put up with and none of this two percent rise in inflation that is not true, as you only have to look at fuel, insurance, rent, electricity, food etc. Remember the money pensioners get they spend any way, that money goes back into the Australian economy, money that tax is paid on via GST. Just another thing a big thing that gets up peoples noses the so called ordinary man & woman in the street (and those that live on it) politicians giving themselves big pay increases it is like a slap in the face to OAPs remember they helped build this country to what it is today remember you will need good honest Australian workers in the future so don’t keep them down give past, present and future workers respect.