Centrelink payments will be given their biggest increase in 30 years to help recipients cope with the rising cost of living.
Jobseeker recipients aged over 22 and who do not have children will get another $25.70 a fortnight, while couples will be given an extra $23.40 from September 20.
The Parenting Payment will also increase, with singles receiving $35.20 more a fortnight and couples $23.40.
It marks the most significant increase for allowances in three decades, with pensions also set to get their largest boost to indexation in 12 years.
Some 4.7million people will benefit from the increase as inflation continues to grow with the rate at 6.1 per cent and likely to rise to 7.75 per cent by the end of the year.
Centrelink payments will be given their biggest increase in 30 years to help recipients cope with the rising cost of living
Centrelink allowances and pensions are set to be given a massive boost under Anthony Albanese’s government
The Age and Disability Support Pensions and Carer Payment will increase drastically with singles receiving $38.90 more a fortnight and couples $58.80.
The maximum rate of a pension will increase with singles receiving $1,026.50 a fortnight and couples getting $1,547.60.
Treasurer Jim Chalmers said the increases were crucial to ease cost of living pressures.
‘That’s why they’re indexed twice a year, and every little bit helps,’ he said.
‘This indexation will be particularly big this month, because inflation is particularly challenging.’
The consumer price index in the June quarter soared at the steepest pace since mid-2001, with prices continuing to rise for everyday Australians
A tight rental vacancy market and higher power prices prompted housing costs to surge by nine per cent in the year to June 30.
Transport costs went up by 13.1 per cent while food prices increased by 5.9 per cent.
Mr Chalmers admitted that ‘times will still be tough’ for a lot of people.
‘And we know that it won’t solve every problem for everybody, but it’s important that we try and make sure that those payments keep up,’ he said.
‘That’s what the indexation is about. It will be welcome even as we acknowledge that times will still be tough for a lot of people.’
Environment and water minister Tanya Plibersek said the increase was more good news for pensioners after it was revealed at the Jobs Summit last week they could earn another $4,000 without it affecting their payments from Centrelink.
Treasurer Jim Chalmers said the increases were crucial to ease cost of living pressures (pictured, Centrelink queue)
Centrelink payment boost
Centrelink allowances will be given their biggest boost in 30 years while pensions will also have their biggest increase to indexation in 12 years.
Below is a list of how much fortnightly payments are set to increase:
Age and Disability Support Pension and Carer Payment
Singles: $38.90 ($1,026.50)
Couples: $58.80 ($1547.60)
Singles: $25.70 ($677)
Couples: $23.40 ($616.60)
Singles: $35.20 ($927.40)
Couples: $23.40 ($616.60)
‘It means they can earn a bit of extra money on the side. It’s also important for the economy because we’ve seen skills shortages in so many areas,’ she told Sunrise.
‘If people can go back and do a bit of work and relieve some of those skills shortages, that’s good for employers too.’
Australian Council of Social Service acting chief executive Edwina MacDonald said more money was needed to help recipients.
‘It’s really just a drop in the ocean at this point and as the non-discretionary inflation is higher than the CPI, they are still going backwards in terms of what they can afford to buy at the moment,’ she said.
‘So, currently jobseeker is at $46 a day, youth allowance is at $38 a day and what we need in order to bring it up to the poverty line, is to bring it up to at least $70 a day.’
The increase comes with cost of living set to increase further when the temporary fuel excise freeze ends on September 29.
Mr Chalmers has ruled out extending the tax cut that was introduced by former prime minister Scott Morrison.
The price of petrol is set to skyrocket for Aussie motorists by the end of the month with those filling up a 60litre tank set to pay an extra $15 at the pump
Why welfare payments are indexed
Welfare payments are adjusted in line with movements in the Consumer Price Index.
The process is known as indexing and allows the payments to maintain the same purchasing power when cost of living increases.
JobSeeker Payment, Parenting Payment Partnered and Special Benefit rates are tweaked on March 20 and September 20 every year.
The same goes for the Age Pension, Service Pension, Disability Support Pension and Carer Payment.
Youth Allowance and Austudy rates are only adjusted once every year – usually on January 1.
‘It would be too expensive to continue that petrol price relief indefinitely,’ he said.
‘I think Australians understand that we’ve inherited a budget which is heaving with a trillion dollars in Liberal Party debt and that means some difficult decisions including this one.’
Nationals MP Barnaby Joyce said the removal of the fuel excise would just add more pain to families already struggling to make ends meet.
‘Well, we’re seeing a lot of pressures by cost of living, and we know at the end of the month the fuel excise goes and a lot of those increases will be gobbled up just in one item alone – fuel increases,’ he said.
‘We know it’s an inflation period and interest rates will also rise and so real pressures are going on people and they need – unless you want them in poverty, they need to be supported.’
WHY WILL FUEL BE MORE EXPENSIVE?
From September 29 the government will stop its fuel tax relief program that saw fuel excise cut from 44c to 22c.
The 50 per cent cut came at a $3billion cost to taxpayers.
The fuel relief scheme was introduced in March to help combat the cost of living crisis as the price of petrol soared in the wake of Russia’s bloody invasion of Ukraine.
But the six-moth period is soon to end and Anthony Albanese’s government are set to ramp up the tax once again.
Families filling up two cars once a week will be paying about $30 more per week, or an extra $700 over six months.