The Government's Secure and Sustainable Pension Reform package ensures that more than 3 million recipients of Age Pension, Disability Support Pension**, Wife Pension, Widow B Pension, Carer Payment, Department of Veterans' Affairs (DVA) Service Pension and Income Support Supplement will enjoy an increase in their pension rate.
These changes came into effect from 20 September 2009.
Please note that different arrangements apply to people living overseas.
An increase to the pension rate for all pensioners
The maximum single pension rate has increased by $65.00 a fortnight. This includes an increase of $60 per fortnight in the base pension rate and a $5.00 per fortnight increase via the new Pension Supplement. Full-rate single pensioners received the full increase. Part-rate single pensioners received a partial increase, with the minimum increase being $20.20 per fortnight.
Couple pensioners received an increase of $10.15 each per fortnight, whether they were on full or part-rate pensions. This increase was paid as part of the new consolidated Pension Supplement.
The increases were paid on top of an indexation increase which took effect from 20 September 2009.
New indexation arrangements for the base pension also now apply to better reflect changes in pensioners' living costs, and a new, higher, benchmark to average wages has been introduced.
From 20 September 2009, transitional arrangements apply to protect the previous entitlements of pensioners who would otherwise have had a reduction in their payment due to changes in the income test.
Figure 1 and Figure 2 provide a representation of these changes to the new pension system for singles (figure 1) and couples (figure 2).
Figure 1: Changes to Australian Pension payments (Singles)
Figure 2: Changes to Australian Pension payments (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.
*Improved Indexation - maximum base pension rates in the new pension system will be adjusted by the greater of the movement in the Consumer Price Index (CPI) and the movement in the new Pensioner and Beneficiary Living Cost Index.
Benchmark - the effective benchmark for single pensioners will be 27.7 per cent of Male Total Average Weekly Earnings (MTAWE) (March 2010). The benchmark for couple pensioners will be 41.76 per cent of Male Total Average Weekly Earnings (MTAWE) (March 2010).