Effective on the 1st of January 2023, Centrelink will impose new changes to its benefits payments for many eligible beneficiaries across Australia. These changes will affect younger citizens, people receiving disability and healthcare benefits, caregivers, and local pensioners. There are currently more than 5.5 million plus Centrelink dependents in total.
These beneficiaries will receive average to substantial increases in their regular payments. For these specific segments of society under Centrelink, these changes mean an increase in their regular payments, for up to 20 per cent overall:
- Up to six per cent increase for the youth, caregivers, and students
- A $19.10 to $41.40 a fortnight range increase for Youth Allowance
- An additional $32.40 to $41.40 range increase each fortnight for Austudy students
- A $27.40 to $40.70 a fortnight range increase for those with disability support pension under 21 years old and without children
Elsewhere, general across-the-board payment increases were also applied to the following payments:
- ABSTUDY
- Isolated children assistance
- Mobility allowance
- Double orphan pension
- Carer allowance
- Pharmaceutical allowance
The Australian government approved an overall increase in these Centrelink payments as far back as last year. These changes are designed to improve their current financial situation. Social Services Minister Amanda Rishworth explained that “This will have a significant impact on the hip pockets of young people.”
She also added that “Income-free areas for student-income-support recipients will also benefit from indexation, meaning they can earn more before their payment is impacted.”
The government also stated the same situation for pensioners, promising that senior recipients receiving Age Pensions and Service Pensions can also enjoy these benefits to curb price increases and earn possibly more with no further reduction on their regular payments.
Increases and Changes in Pensioner Payments
Meanwhile, the government will suspend Age Pension payments if the senior recipients are also already receiving local employment income. Pensioners will also receive similar payment increases as their younger counterparts.
Services Australia issued a statement, explaining that “We can do this if your employment income goes over the cut-off point for more than six fortnights in a row.” In addition, they clarified that “We can do this for up to two years. This means that you don’t have to reclaim if you start earning less, or stop working.”
This means that any pensioner earning more than $2,243.00 or pensioner couples earning beyond $3,431.20 will automatically get zero Age Pension payments on that same fortnight payment period. Services Australia said that this will be done right away, explaining that “You don’t need to ask us to suspend your payment, we’ll do this automatically. When this happens, we’ll write to you to let you know. We’ll tell you the dates of the period we can suspend your payment. You won’t need to report your employment income while your payment is suspended.”
However, the approved increases for pension payment recipients will now be in effect for Age Pension, Disability Support Pension, and Carer Payment. These payments are getting a boost of $38.90 per fortnight for individuals, while couple pensioners will receive $58.80 a fortnight.
The government also reset the highest pension rate to a maximum of $1,026.50 a fortnight for single pensioners and $773.80 for each half of a pensioner couple, including Pension Supplement and Energy Supplement payments.
Both pensioners and younger Centrelink payees share the same economic dilemma of rising costs of living, as shown by the latest Pensioner and Beneficiary Living Cost Index. The government’s efforts were created to address growing financial tensions in these two age groups to balance and avoid growing inflation and pricing fears as 2023 treads on.
A Preemptive Strike?
The Potential Slowing of the Australian Economy
The government’s payment changes are designed to counter some of the more immediate effects of inflation and the higher cost of living. These were foreboding economic projections that were already manifesting late last year.
Late last year, these financial indicators were already felt. Australians who responded to a national survey already posted some of their financial adjustments: 67 per cent reported a significant increase in spending for weekly grocery store bills compared to what they’ve spent before. Meanwhile, 26 per cent had to adjust in ways to keep costs within budget, among them spending even less, buying cheaper, or catching discounts just to keep within reasonable spending.
Let’s consider some of these late 2022 economic indicators: First was the 7.3% year-on-year inflation in the third quarter. Then, the wage-price index growth rate was only 3.1% in the third quarter of last year. Also, the national household savings ratio was at a historic low of 6.9%, down from the 9.5% average harkening back to the post-war average.
Public sentiment is also the same, with many Australians anticipating inflation issues to continue and the cost of living to increase. Despite efforts by the Reserve Bank of Australia (RBA) to assure everyone of their work to manage inflation and cost of living prices, the general public still isn’t convinced.
The Canstar Consumer Pulse Report survey numbers reflect the not-so-positive outlook, with 44 per cent of the 2,157 respondents disagreeing with the RBA’s assuring promise. In general, citizens also agree in the majority of 59 per cent, citing groceries, rent, electricity and gas, interest rates, and petrol as some of the main problems entering 2023.
Indexation Changes; Government Provides Much-Needed Cash Boost
The Australian government set up efforts in September of last year to counteract these growing economic issues. They announced these increases to social security payments to curb the upward trend of inflation and cost of living prices, just as the economic effects were just beginning to develop in late 2022.
Come 2023, the aforementioned set of Centrelink-recipient citizens will receive their increases from the 1st of January onwards to help defray these rising costs immediately and instantly once they receive their upcoming payments.
Rishworth reiterated that “We want to ensure Australia has a strong social security safety net to protect our most disadvantaged. Our guiding principles as a government are ensuring no one is left behind and no one is held back, and this indexation increase will help those on government payments keep up with the cost of living.”
