Tomorrow’s pension rise: 19% lower if Abbott’s pension cuts were in play

“Tomorrow’s 6-monthly pension increase would have been 19% lower if the Abbott Government’s pension slash was in play”, said CPSA’s Manager Research & Advocacy, Amelia Christie.

“Tomorrow, the single pension will go up by $11.50 per fortnight thanks to indexation by the Pensioner & Beneficiary Living Cost Index (PBLCI). But if CPI had been used, that rise would have only been $9.30, or 19% less than what single pensioners will receive.

“It’s the same story for couples who will receive a rise of $17.40 per fortnight, 19% more than if the pension went up by CPI alone.[1]

The Government wants to index pensions by CPI alone, rather than the PBLCI and Male Total Average Weekly Earnings indices, which have tracked higher than CPI in ten of the past eleven increases. Pensions go up by whichever index is the highest.

“Should the changes to pension indexation measures pass Parliament the pension will lose value over time and fall behind community living standards. It will wipe out the historic 2009 pension increase and see the pension again fall below the poverty line.

“CPSA calls on Senators to block these pension measures and allow pensioners to retain their modest pension increases and not allow the value of the pension in real terms to be withered away”, said Ms Christie.

The new pension indexation regime is scheduled to start on 20 September 2017.

The legislation to enact this is currently before the Senate and is listed for 23 September 2014.

Media Contact: Amelia Christie
Mobile: 0410 612 182

 


[1]This pension increase was based on the Pensioner and Beneficiary Living Cost Index going up by 1.4 per cent for the six months to June 2014. CPI went up by only 1.103 per cent.