Jon Sullivan (Longman, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Families, Housing, Community Services and Indigenous Affairs. When and how will pensioners benefit from the government’s pension reforms?

Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Link to this | Hansard source

I thank the member for Longman for his question, and particularly for his hard work on behalf of more than 23½ thousand pensioners in his electorate.

I am very pleased to be able to inform the House that from 20 September we are going to deliver an increase to the pension payments of 3.3 million aged pensioners, disability support pensioners, those on carer payment, wife and widow pensioners and veterans on income support payments. These increases are fair, sustainable and long overdue. They certainly provide Australia’s pensioners with much needed support but, of course, also strengthen the pension system to make sure that we are meeting the needs of an ageing population.

The government’s secure and sustainable pension reform was, of course, announced by the Treasurer in the May budget, and these are the most significant reforms to the pension since it was introduced 100 years ago. From today, and over the next two weeks, pensioners will receive letters from Centrelink setting out their payment rates. From 20 September, in just a few days time, a single pensioner on the maximum rate of the pension will receive an increase of $32.50 a week. That is as a result of the budget increases. This will be paid via an increase of $32.00 a week in the base pension and a $2.50 a week increase in the new pension supplement.

The new pension supplement will include the full value of the utilities allowance; the telephone allowance, paid at the higher internet rate; the GST supplement; the pharmaceutical allowance plus the increase in the base rate; and, of course, the increase for the pension supplement. These increases are in addition to that which pensioners can expect to receive from regular indexation. Regular indexation will also occur on 20 September.

Members might be aware that we have introduced a new pensioner living cost index as part of this major reform package. This will operate alongside the consumer price index and the male total average weekly earnings benchmark. Just for the information of pensioners who might be listening, and all members, this September the government’s new pensioner living cost index has resulted in the higher pension rise, rather than either the CPI or the MTAWE benchmark.

For the information of all members, total indexation for single pensioners will be $5.83 a fortnight and for couples combined will be $9.93. As a result of the budget increases and indexation single pensioners on the maximum rate will see an increase of $70.83 a fortnight from 20 September, bringing their total pension payments to $671.90 a fortnight. Pensioner couples on the maximum rate of the pension will receive a pension reform increase of $20.30 a fortnight, paid through the new pension supplement, and indexation increases of $9.63 a fortnight. This will bring the total increase for couple pensioners combined to $29.93 a fortnight for those on the maximum rate, bringing their total pension payments to $1,013 a fortnight.

In these very difficult economic times we have succeeded in fundamentally reforming the pension system, making it adequate for the millions of aged pensioners, disability support pensioners, carers and those veterans who do depend on it. We have also made the very tough policy decisions to make sure that this pension rise is affordable so that Australians have got a fair and adequate pension system for those who need it when they need it.