The changes outlined in this fact sheet form part of the Secure and Sustainable Pension Reform package, most of which were implemented from 20 September 2009. These changes apply to pensioners in receipt of Age Pension, Disability Support Pension, Wife Pension, Widow B Pension, Carer Payment, Department of Veterans' Affairs (DVA) Service Pension and Income Support Supplement.
Please note that different arrangements apply to people living overseas and to people in receipt of Disability Support Pension aged under 21 years without dependent children.*
A new transitional rate to protect current entitlements
A new transitional rate protects current entitlements to pensioners on 20 September 2009 who would otherwise have had a reduction in their payment due to changes in income test arrangements. These pensioners received an increase in their pension and will remain on this transitional rate until they are better off under the new rules. They will continue to receive existing add-ons and allowances which will be paid as part of their fortnightly payment. This new transitional rate will be indexed to the Consumer Price Index (CPI) increases in March and September.
Figure 1 and Figure 2 illustrate the components of the transitional rate for singles (figure 1) and couples (figure 2)
Figure 1: Changes to Australian Pension payments: Transitional Rate (Single)
Figure 2: Changes to Australian Pension payments: Transitional Rate (Couples combined)
*Disability Support Pensioners under 21 without children will continue to be paid at a rate that includes the equivalent Youth Allowance rate, Youth Disability Supplement and Pharmaceutical Allowance. They will also continue to be paid the Utilities Allowance and Telephone Allowance quarterly, if eligible.