From 20 September 2022 pensioners will enjoy a surprising present from the government the biggest Age Pension increase since 2010.
In Australia more than 2.6mil people receive some form of the Age Pension payment,
39% of retirees of Age Pension age receive the full Age Pension and a further 24% are on part Age Pension.
And today we will go over all the details of that biggest Age Pension increase in the last 12 years
My name is Katherine Isbrandt from About Retirement, I am Certified Financial Planner and your are watching About Retirement TV,
the place that is devoted to the very important issue of preparation for retirement or improving your retirement financially if you are already there.
Currently Age Pension payments are indexed twice a year.
That includes Age Pension, Service Pension, Disability Support Pension and Carer Payment.
The semi-annual increase is calculated based on the movements of CPI (Consumer Price Index) or PBLCI (Pensioners and Beneficiaries Cost of Living Index).
PBLCI was introduced during Rudd's government with the idea to keep the level of the disposable income of pensioners in pace with price changes.
Whichever is greater, that is the number that will be applied to the pension increase.
But PBLCI hasn't really been used at all for years due to Australian wages not increasing.
So what increase of Pension payments can you expect from 20 September 2022?
Singles will receive an extra $38.90a fortnight and couples an extra $58.80 a fortnight.
When we look back, in March 2022, there was also an increase of $20.10 pf for singles and $30.20pf for couples.
therefore, if you calculate the full increase in 2022 calendar year, that is an extra $1,026.50pa for singles and $1,547.60 for couples,
which is an increase by 6.1%, again I repeat, the highest in 12 years.
It might sound like a very good news, and it is, but is it enough?
Considering that the Reserve Bank is forecasting the inflation rise up to 7.75% by the end of 2022 calendar year,
I think our government could have done better.
This pension rise is not keeping up with the rise of essential cost of living.
Well, OK, since we are talking about the rise of pension payments, let's review current maximum rates payable form 20 September 2022
Singles will receive $1,026.50 pf which is $26,889pa
Couple per person will receive $773.80pf $20,119pa
Couple combined: $1,547.60pf $40,238pa
Couple separated due to illness each person will receive the single rate, therefore combined payment is $2.053.00pf $53,378pa.
What happens when only one person of a couple is eligible?
If you are a couple, but only one person is of Age Pension age,
therefore eligible to be receiving Age Pension payments, you will receive a payment of one person in a couple,
therefore you will receive $773.80pf, if you are eligible for full payment.
It is not the case of you receiving singles rate, after all you are in a couple relationship
your payment is based on a couples rate.
I received this question so many times, so I thought I would quickly clarify this.
I would invite you to watch this special video: "Age Pension when one partner is eligible".
I think it can help you understand how to improve your Age Pension payments in this situation.
And now lets talk about Pension Supplement
If you are eligible for the Age Pension, you will automatically receive a pension supplement.
If you receive the full Age Pension, then you will also receive the full Pension supplement.
When your Age Pension reduces under Income or Assets Test,
your Pension Supplement will also reduce proportionally until it reaches the minimum payment.
Therefore for Singles the minimum payment is $40.70 and maximum $75.60pf
For Couple living together minimum payment is $30.70 each or $61.40 both and the maximum is $57.00 each or $114.00 both combine pf
For couple separated due to illness the minimum is $40.70 each pf or $81.40 both maximum $75.60 each pf or $151.20 both together pf
So what about Rent Assistance
If you are receiving Age Pension, and you are a non-homeowner you pay a rent, you also could be eligible for rental assistance,
providing that you meet the minimum fortnightly rent payments to qualify for the assistance, which is :
For Singles $135.40pf
And for Couples $219.20pf
If you meet those requirements, and you pay more than these listed amounts,
you are entitled to 75cents for rent assistance for every dollar over the threshold, up to the maximum amount.
And the maximum fortnightly rent assistance is:
For Singles $151.60pf
And for Couple combined $142.80pf
Lets talk about Age Pension increase if you live outside of Australia:
Well for Singles it is $772.40pf Age Pension payment which is $20,082pa which is an increase of $29.70pf
For Couple each it is a payment of 645.60pf which is an increase of $24.80pf
For Couple combined the fortnightly payment is $1,291.20pf which is an increase of $49.60pf
For Couple separated due to illness, as mentioned before each person is receiving a rate of a single pensioner,
Therefore $772.40 per person or $1,544.80 combined which is an increase of $59.40pf
Talking about the Age Pension when living overseas, have you watched my video: "Retirement overseas and Age Pension"?
If not, find out how you can live overseas and still enjoy Australian Pension payments in your bank account.
I hope you enjoyed this video, if so, please LIKE it and SUBSCRIBE to this channel not to miss my next video.
And please leave a comment below the video as to what is your opinion about the current Age Pension increase, is it enough or should it be higher and why?
Also, please visit my website AboutRetirement.com.au, which is devoted to all the issues you need to know and understand about retirement,
whether you are preparing for retirement, or if you have already retired and would like to improve it financially.
Please feel free to go through hundreds of articles all written by me overtime,
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And if you find this retirement preparation confusing, and who doesn't, then you can easily book a meeting with me.
the little "BOOK A MEETING" button is visible on every page, so it is easy.
You then will be taken to my personal calendar, and you can choose the time that suits you when we can meet face to face
if you are in Melbourne or through online meeting if you are elsewhere and we can discuss whatever problem you have.
And now, please watch those previously mentioned videos: first "Age Pension when one partner is eligible"
where you can find smart ways to improve your overall financial position when only one partner reached the Age Pension Age.
And the second video: "Retirement overseas and Age Pension"? watch this one if your dream is to retire overseas.
I will speak with you in my next video. Bye for now.