Recipients of the Age Pension, Disability Support Pension and Carer Payments can expect an increase of $37.50 a fortnight for singles and $56.40 for couples combined.
This will bring the maximum fortnightly rate to $1,064 for singles and $1,604 for couples, an increase of up to $1,466 when extrapolated over the year.
Pensions have climbed at more than twice the rate of wages given cost of living pressures and monthly inflation currently sitting at 7.4% in January.
The new 3.7% rise follows a 4% rise in September 2022.
The indexation of welfare payments kicks in on 20 March.
Minister for Social Services Amanda Rishworth said the increase would go a long way to “help those doing it toughest.”
“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.”
While pensions are reviewed every six months, National Seniors Australia Chief Advocate Ian Henschke said this should be adapted.
“The Federal Government should index the pension every three months during times of high inflation to help those most vulnerable,” Mr Henschke said.
Single JobSeeker and ABSTUDY recipients aged over 22 with no children will receive an extra $24.70 per fortnight.
Meanwhile, couples will receive an extra $22.50 each a fortnight.
The Australian Council of Social Service (ACOSS) said this wasn't enough for the unemployed and that those payments should be increased to the rate of the pension, currently $73 a day.
“While every little bit extra helps, this indexation will not ensure that people can cover basic costs because their incomes were grossly inadequate before prices rose,” ACOSS acting CEO Edwina MacDonald said.
“The only way to address this problem is to deliver a real increase to JobSeeker and related payments so that they are lifted to at least the same level as the pension.”
Single parents receiving the Parenting Payment will benefit from a $33.90 rise in their fortnightly payments. This comes to $967.90 a fortnight and includes the Pension Supplement, Pharmaceutical Allowance, and Energy Supplement.
Commonwealth Rent Assistance will increase by $5.60 a fortnight for singles, $6.58 for recipients with one or two children, and $7.42 with three or more children.
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