Millions of Australians are expected to receive a boost to their Centrelink payments and pensions starting next month. This increase, known as indexation, is part of the government’s routine adjustment to support pensioners and welfare recipients in keeping up with rising living costs.
What is the Centrelink Cost-of-Living Cash Boost?
From September 20, 2024, the maximum rate for major Centrelink payments, including the age pension, carer payment, and disability support pension, will increase. According to estimates by the Combined Pensioners and Superannuants Association (CPSA), singles receiving the age pension will see an increase of $28.10 per fortnight, bringing their total payment to $1,144.40. For couples, the increase will be $42.40, resulting in a fortnightly payment of $1,725.20.
JobSeeker recipients will also benefit from the indexation adjustment, with singles expected to receive an additional $15.30 per fortnight, raising their total payment to $778. For couples, the rate will increase by $14, bringing their fortnightly payment to $712.30.
How is Indexation Calculated?
Centrelink payments are indexed twice a year—on March 20 and September 20—based on changes in significant economic indicators. The age pension rates, for example, are adjusted according to the Consumer Price Index (CPI) and the Pensioner and Beneficiary Living Cost Index (PBLCI). In the past six months, the CPI has increased by 2%, and the PBLCI by 2.6%. Consequently, the maximum basic rate for these payments will rise by 2.6%, with the pension supplement increasing by 2%. This marks an important improvement over the 1.8% increase seen in March 2024, reflecting the ongoing rise in the cost of living.
JobSeeker rates are adjusted based on the last two quarterly CPI increases, leading to an expected 2% rise in payments. These adjustments ensure that payments keep pace with inflation, offering some relief amid increasing expenses for everyday essentials.
When Will You See the Full Increase?
While the new rates officially come into effect on September 20, recipients may not see the full increase reflected in their first payment after this date. Centrelink payments are calculated based on a daily rate and are paid in arrears. This means that by the time you receive your payment, the dates for which you are being paid have already passed. As a result, your first payment after indexation may be slightly lower, but the full indexed amount should be reflected in subsequent payments.
Who Will Benefit from These payments?
The cost-of-living cash boost is expected to reach about five million Australians, including approximately 2.6 million age pension recipients. However, if you fall just outside the eligibility criteria for the age pension due to the asset test, there are still ways to potentially improve your position. Financial advisor Alex Jamieson suggests that there are “levers” you can pull, such as using a gifting provision within the relevant limits, going on a holiday, spending money on home repairs, or considering prepaid funerals. These strategies can help reduce your assets just enough to qualify for the pension and the associated benefits, such as medication and utility reductions.
Final Indexation Figures
While the CPSA’s estimates provide a reliable guide, the final indexation figures will be released by the government in the coming days. Historically, CPSA estimates have been accurate within 10 cents, so recipients can be fairly confident in these projections as they plan their finances for the months ahead.
The upcoming Centrelink cost-of-living cash boost provides a welcome relief for millions of Australians grappling with rising living costs. As the government adjusts these payments in line with inflation, recipients can look forward to a modest but helpful increase in their fortnightly payments. Whether you are receiving the age pension, carer payment, disability support pension, or JobSeeker, these changes aim to support you in managing the ongoing financial pressures many face today.
As always, it’s important to stay informed and review your eligibility for various Centrelink payments and benefits. With the cost of living continuing to rise, every bit helps in maintaining your financial well-being.
