Centrelink payments to rise for millions of Australians

More than 4.7million Australians are set to receive a massive boost to their pension and allowance payments.

Single and disability pension recipients and carers will receive an extra $37.50 from March 20 bringing the fortnightly rate to $1,064.

Couples will get an extra an extra $56.40 raising the fortnight payment to $1,604.

JobSeeker and ABSTUDY payments will increase by $24.70 bringing the fortnight payment to $701.90 for single recipients aged over 22 with no children.

Parenting Payments will rise by $33.90 to $967.90 a fortnight for single parents.

Commonwealth Rent Assistance will increase by $5.60 for singles, $6.58 for recipients with two children, and another $7.42 for families with three or more kids.

The increase is part of the twice-yearly indexation that is aimed at keeping pensions and allowance payments in line with inflation.

Pensions have risen at twice as fast as wages after a four per cent rise in September and a 3.7 per cent boost this month.  

Australian wages last year rose by 3.3 per cent, the fastest pace in a decade, but this was well below the inflation rate of 7.8 per cent – the worst since 1990. 

Minister for Social Services Amanda Rishworth said it would go a long way to help recipients. 

‘Indexation is a pillar of our social security system and we want more money in the pockets of everyday Australians so they can better afford essentials,’ Ms Rishworth said.

‘Australia’s social security system exists to support our most vulnerable citizens, and we know they are feeling the pinch.’

It comes as mortgage holders brace for more pain with the Reserve Bank of Australia likely to deliver this week its 10th interest rate hike. 

The central bank is tipped to deliver another 25 basis point hike after comments made last month suggested the bank was growing impatient with high inflation now sitting at 7.8 per cent.

This would take the cash rate from 3.35 per cent to 3.6 per cent when the board meets on Tuesday.

The boost to pensions and allowance payments comes as mortgage holders brace for more pain with the Reserve Bank of Australia likely to deliver this week its 10th interest rate hike

Annual repayments are now typically $12,000 higher than they were in May 2022 following nine consecutive rate hikes.

The Commonwealth Bank, Australia’s biggest home lender, has increased its one-year fixed rate by a sizeable 40 basis points to 5.99 per cent.

This increase means a borrower with an average $600,000 mortgage would be paying $153 more a month in repayments compared with a customer who signed a contract before the announcement.

The new monthly repayment of $3,594 is also $1,400 or 63.8 per cent higher than the $2,194 level, for an equivalent 30-year loan, back in May 2021 when the big banks were offering average fixed rates of 1.92 per cent.

NAB has raised its variable rate for borrowers with mortgage deposit of less than 20 per cent deposit by 0.2 percentage points to 6.44 per cent.

For a borrower with an average $600,000 mortgage, this will mean a $78 increase in monthly mortgage repayments to $3,769.

The banks usually announce increases to their variable rates after the RBA has increased interest rates on the first Tuesday of the month but NAB did so less than a week beforehand.