More than 5.3 million people on social security payments will get an increase from 20 September, when the September indexation round takes effect. Social Services Minister Tanya Plibersek put the total cost at $4 billion.
A single person on the maximum age pension gains $36.80 a fortnight, taking the payment to $1,237.70. A couple gains $55.60 combined, to $1,866.00. A single person on JobSeeker with no children gains $16.20, to $833.70. With a dependent child the increase is $17.30, to $892.80, and a partnered recipient gains $14.80 each, to $763.00. Single parents on Parenting Payment gain $20.90, to $1,087.20.
The gap between those two numbers is not an accident of rounding. Pensions and allowances move under different rules. The age pension is indexed by whichever is higher of the Consumer Price Index or the Pensioner and Beneficiary Living Cost Index, then measured against a benchmark tied to male total average weekly earnings, so that a couple's combined rate does not fall below 41.76 per cent of that figure. JobSeeker and the other allowances are indexed to the Consumer Price Index alone.
Wages have run ahead of prices for most of the past two years. That is why a pension indexed partly to earnings rises by $36.80 while an allowance indexed to prices rises by $16.20, and why the distance between the two widens at each indexation round rather than closing. Both formulas sit in Part 3.16 of the Social Security Act 1991. Neither changed in this round.
Deeming rates go up on the same day. The rate applied to the first $66,800 of financial assets for a single person, or $110,600 for a couple, rises from 1.25 per cent to 1.75 per cent. Everything above that moves from 3.25 per cent to 3.75 per cent. Deeming assumes a return on savings and investments regardless of what those assets actually earned, and the assumed figure is what the income test uses.
For a pensioner on the maximum rate with little in the bank, the deeming change does nothing. For a part rate pensioner with financial assets, it lifts assessed income and trims the payment, so some people counting on $36.80 will see less than that once the income test is applied. The department did not publish an estimate of how many recipients fall into that group.
Commonwealth Rent Assistance maximum rates are indexed in the same round. The department says those maximums are 53 per cent higher than in 2022, and that pension rates are 25 per cent higher than when the government took office. Both comparisons run from a period in which rents and grocery prices rose sharply, and the department did not publish the change in real terms over the same span.
Payments are indexed twice a year, in March and September. The new rates apply from 20 September, and recipients on a fortnightly cycle will see the change in the first full instalment after that date. The March 2027 round will run off the December quarter figures, which the Australian Bureau of Statistics publishes in late January.
