About 5 million Australians will see a small increase to their welfare payments as part of regular indexation from this Saturday.
The increase in rates is automatically linked to the changes of the consumer price index, to help people on welfare keep up with inflation – but advocates say it will do little to help those living on the poverty line.
What is increasing?
The payments that will see an increase are the age pension, carer payment, disability support payment, commonwealth rent assistance, jobseeker, Abstudy and the parenting payment, but how much each recipient will receive varies.
For instance, the age pension will jump $29.70 for singles, to $1,178.70 a fortnight. For partnered pensioners, the payment will increase $21.40 to $813.90 each a fortnight.
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For singles over 22, jobseeker payments will increase by $12.50 a fortnight, to a total of $793.60.
You can check the full list off payments and increases on the Services Australia website.
Is it enough?
The social services minister, Tanya Plibersek, said Australia’s welfare system was “ground in fairness”, which is why it is indexed.
“Thanks to indexation, millions of Aussies will receive a boost to their payment to help them cover everyday costs like groceries and healthcare,” she said. “The government wants to help take the pressure off when it comes to cost of living.”
But anti-poverty advocates argue the small rise in benefits will do little to help elevate the financial struggle millions of Australians are facing, calling for payments to be lifted in line with the Henderson poverty line of $660.72 a week for a single person.
Welfare advocate Jeremy Poxon said CPI indexation does little to help “people in poverty”.
“Politicians on both sides boast about indexation to pretend they’re doing something to boost people’s income,” Poxon said.
“This is a deeply cynical and insulting exercise, designed to hide the fact that, in reality, government is starving the poor with some of the lowest welfare payments in the OECD.”
What’s happening with the deeming rate?
The government uses deeming rates to calculate how much money pensioners make from their financial assets after they have retired. This is used to help determine how much their fortnightly pension will be.
The lower the deeming rate, the more people can earn from their investments – shares, superannuation and any interest on money in the bank – without it affecting their payments.
Deeming rates were cut in Covid, and have been paused ever since, but as part of a push to return them to pre-pandemic figures they will be increasing.
“As Australians begin to feel the positive impacts of inflation easing, the government will now gradually return deeming rates to pre-pandemic settings,” a media release from Plibersek said in August.
“From 20 September, a deeming rate of 0.75% will apply to financial assets under $64,200 for singles and $106,200 for couples combined. Assets over this amount will be deemed at a rate of 2.75%.
“Even with these increases, the deeming rates will remain below historical pre-Covid averages.”
