On September 20, 2024, Australia will implement significant changes to the Age Pension and Rent Assistance, offering some financial relief to pensioners amid rising living costs.

Tegan Del Moro , our senior financial adviser says “For nearly half of retired Australians, Centrelink Age Pension represents their primary source of income. This makes it crucial to stay informed about any changes, to ensure retirees can make the most of these benefits and plan effectively for their financial future”.

We work with clients all the time that benefit from incorporating centrelink benefits into their overall financial plan, and know that optimising any benefits received is beneficial.

Age Pension Increases

The Age Pension is set to increase, with single pensioners receiving an additional $28.10 per fortnight, bringing their total payment to $1,114.40. For couples, the combined increase will be $42.40 per fortnight, raising the payment to $1,725.20. These increases reflect the regular indexation adjustment, which accounts for inflation and the rising cost of living.

In addition to the payment increases, the income and asset thresholds that determine eligibility for the Age Pension have also been adjusted. For instance, single homeowners can now have assets up to $695,500 before their pension is affected, while non-homeowners can have up to $947,500. For couples, the thresholds have been increased to $1,045,500 for homeowners and $1,297,500 for non-homeowners.

Rent Assistance Changes

For those receiving Commonwealth Rent Assistance (CRA), the changes bring a welcome boost. The maximum rate of CRA will increase by 10%. For single individuals without children, the maximum payment will rise by $23 per fortnight, reaching $211.20. Couples will see a $21.80 increase, bringing their maximum payment to $199 per fortnight.

Simon Tworek, Director and Senior Financial Planner with Insight Wealth says “we are regularly having conversations about the real increases in the cost of living at the moment, almost every conversation with a client, irrespective of life stage”.

These changes aim to provide better support for pensioners and other low-income Australians, particularly those struggling with housing costs. However, despite these increases, there is ongoing concern that these adjustments may not fully keep pace with the rapid rise in living expenses, especially in housing, utilities, and groceries.

These updates are part of the government’s broader strategy to adjust social security payments in response to economic conditions and ensure that pensioners and other vulnerable groups maintain their purchasing power.