Older people and others who get government support and have money saved will get smaller payments next month.The rate used to calculate how much they get will go up by 0.5%, which is the third time this has happened since the rate stopped increasing a year ago.
This increase will partly be balanced by raising payments to match the rising cost of living, which will add $4 billion more to the government's spending.
The cost would have been higher, but the increase in the deeming rates has helped save more than $2 billion in the budget over the next four years.
This announcement was made on the same day that Australia’s total debt is expected to go over $1 trillion.
Social Services Minister Tanya Plibersek said she agreed with a recommendation from the Australian Government Actuary to raise the social security deeming rate to 1.75 per cent for financial assets up to $66,800 for single people and $110,600 for couples together; and to 3.75 per cent for any financial assets above those amounts.
This announcement was made on the same day that Australia’s total debt is expected to go over $1 trillion.
Social Services Minister Tanya Plibersek said she agreed with a recommendation from the Australian Government Actuary to raise the social security deeming rate to 1.75 per cent for financial assets up to $66,800 for single people and $110,600 for couples together; and to 3.75 per cent for any financial assets above those amounts.
Deeming rates are a general estimate of how much income people get from their financial assets, like property and savings accounts.These rates are used to calculate social security payments, including the age pension, JobSeeker payment, and parenting payments.
The increase will take effect from September 20 and will be applied to all welfare payments, including the pension, which will also rise on that day to keep up with inflation.
For example, the highest pension payment for a single person will go up by $36.80 to $1237.70 every two weeks, and for a couple, it will increase by $55.60 to $1866 combined.
These rates are now 25 per cent higher than when the Labor government first took office, showing the impact of inflation during their time in power.
The maximum JobSeeker Payment for someone without children will rise by $16.20 to $833.70 every two weeks, and since Labor came to power, recipients have received more than $4700 extra each year.
Deeming rates were kept low during the pandemic to help with the cost of living, but in August of last year, the government ended the freeze, saying that inflation had slowed down.
The rate went up in September last year and again in March this year.This is the third time in a row that the rate has increased.
“From September 20, an extra $4 billion of cost-of-living support will start going to over 5.3 million Australians,” said Plibersek about the latest indexation changes.
“Whether it’s paying for rent, buying food, or covering everyday expenses, this extra help will assist people who receive income support to manage their finances.”
“We will continue to ensure the system supports those who need it most, so that everyone can manage their expenses and no one is left behind.”
The increase will take effect from September 20 and will be applied to all welfare payments, including the pension, which will also rise on that day to keep up with inflation.
For example, the highest pension payment for a single person will go up by $36.80 to $1237.70 every two weeks, and for a couple, it will increase by $55.60 to $1866 combined.
These rates are now 25 per cent higher than when the Labor government first took office, showing the impact of inflation during their time in power.
The maximum JobSeeker Payment for someone without children will rise by $16.20 to $833.70 every two weeks, and since Labor came to power, recipients have received more than $4700 extra each year.
Deeming rates were kept low during the pandemic to help with the cost of living, but in August of last year, the government ended the freeze, saying that inflation had slowed down.
The rate went up in September last year and again in March this year.This is the third time in a row that the rate has increased.
“From September 20, an extra $4 billion of cost-of-living support will start going to over 5.3 million Australians,” said Plibersek about the latest indexation changes.
“Whether it’s paying for rent, buying food, or covering everyday expenses, this extra help will assist people who receive income support to manage their finances.”
“We will continue to ensure the system supports those who need it most, so that everyone can manage their expenses and no one is left behind.”
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