As the new year rolls in, over one million Australians will find a little extra in their bank accounts, thanks to an increase in welfare payments designed to help keep pace with the rising cost of living. From January 1, social security payments will see an annual indexation of 3.8 per cent, a necessary adjustment in these times of financial uncertainty.
For those receiving Youth Allowance, this means an increase ranging from $17.30 to $24.30 per fortnight, and for single students, the boost could be between $24.30 and $30.60. Carers, who tirelessly support others, will also see a welcome change, with their fortnightly welfare allowance rising by $5.80 to a total of $159.30.
The Age Pension, along with other payments like JobSeeker and Commonwealth Rental Assistance, is indexed twice a year, with adjustments occurring on March 20 and September 20.
While any increase is beneficial, the Australian Council of Social Service (ACOSS) has voiced concerns that these adjustments may still leave many Australians struggling to make ends meet. ACOSS chief executive Cassandra Goldie highlighted the harsh reality for students across the country, many of whom are unable to afford basic necessities like food. ‘Every dollar helps when you’re living in poverty,’ she said, emphasising the dire circumstances some are facing.
The criticism doesn’t stop there. The current system applies indexation only once a year, which means that those dependent on welfare are constantly trying to catch up as prices for essentials continue to climb. Goldie points out the flaw in this system, noting that individuals have to stretch their dollars throughout the year, only to receive the indexed increase at the end.
This lag in adjustment can make budgeting a challenge, as the cost of living can rise multiple times within a year, but welfare payments do not reflect these changes until the annual indexation takes place. It’s a cycle that can lead to financial stress and hardship for those who are most vulnerable.
We’d love to hear from you – how do these changes affect your financial planning for the new year? Do you feel the increase is sufficient, or are there other areas where you believe the government should focus its efforts to support Australians? Share your thoughts and experiences in the comments below, and let’s continue the conversation about financial security and well-being in our community.
Also read: When can we expect inflation to finally start falling?
Surely this is a story about a ‘boost’ coming about in January 2025 ?!?
Great spotting there, @Margaret! The title’s been changed.
Nope, still January ‘25
There should be some sort of way to compensate the recipient for the cost of living increases that have happened since the previous percentage increase, the recipient has had to cover these increases over that time, and therefore having their effective disposable income reduced and possibly being out of pocket, or going into debt to cover the increases in living expenses !!
But, definitely “Going Backwards” !!