Pension increase means payrise for 4.7 million

Around 4.7 million Australians will begin to benefit from a boost to their government support payments following the most recent round of payment indexation which came into effect on Tuesday.

Most social security payments are indexed twice a year by law to reflect changes in the cost of living.

Thanks to rising inflation the government says that the latest indexation increase of 4% is the largest in over 30 years for allowances and 12 years for pensions.

What are the new payment rates?

Following the indexation, recipients of the Age Pension, Disability Support Pension and Service Pension will all see an increase in their fortnightly payments.

The maximum rate for singles has risen by $38.90 to $1,026.50 per fortnight, while for pensioner couples it's now $58.80 higher at $1547.60 per fortnight - both of which include the Energy and Pension supplements.

In related news, Age and Veteran pensioners will be able to earn up to $4000 extra over the 2022-23 financial year without it affecting their pension as part of a move from the federal government designed to encourage more older Australians back into work in order to help ease the demand for workers.

The JobSeeker payment has also increased. Singles eligible for the maximum payment and Energy Supplement will now receive $677.20 per fortnight (a $25.70 boost), while single parents will be able to get up to $927.40 per fortnight which is an increase of $35.20.

Meanwhile, students and apprentices on the ABSTUDY payment will begin to receive a new maximum payment of $677.20 per fortnight (including the Energy Supplement) which is also $25.70 higher than it was previously.

Other younger Australians are out of luck for the moment though, as the indexation for Youth Allowance and Austudy payments won't come into effect until January 2023.

Payments 'grossly inadequate' to cover basic costs

While the latest increases will no doubt receive some welcome given the significant rise in living costs over the past six months since the last indexation came into effect, advocates in the social services space argue that support payments still fall well below what's needed.

Edwina MacDonald, the acting chief executive of the Australian Council of Social Service (ACOSS), says that the new JobSeeker rate for a single person of $48 a day comes out at just 42% of the minimum wage which remains well below the poverty line.

"Routine indexation is vital and, anything helps when you're getting by on so little. But an extra $1.80 on an already grossly inadequate income won't cover the costs of winter energy bills, high fuel prices, medicines, groceries or rent," she says.

"We speak regularly to people who cannot eat three meals a day, who cannot afford essential medication and who are in debt with their utility provider because they cannot cover the cost of energy."

In order to ensure that people can meet the basic costs of living, ACOSS has urged the government to take action beyond the indexation of payments by increasing JobSeeker to $73 a day.

A similar call has been made by the St Vincent de Paul Society, which estimates that a $10-$15 a day increase to JobSeeker and other working age payments would lift 1,000,000 Australians out of poverty.

"While the indexation announced by the Government will lift income support payments by 4%, around 830,000 people on JobSeeker will continue to live in poverty simply because the base rate is too low and indexation cannot keep up with the surging cost-of-living," says national president, Claire Victory.

"We need to say that it is not good enough that people in Australia cannot afford a safe home and to feed themselves and their children."

The payment rates for pensions and JobKeeper will be indexed again on March 20, 2023.

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