Around 4.8 million people, including pensioners and allowance recipients, will directly benefit from the increase.
Rates for Age Pension and Disability Support Pension will rise by $8.20 per fortnight to $834.40 for singles and $12.40 per fortnight to $1,258 for couples (combined).
Minister Fletcher announced further there will be a higher limit to income and asset tests before pensioners’ payments are affected. An increase of $2,750 to $564,000 worth of assets for a single home owner will be accepted before the pension is disqualified, while couples (combined) who own a home are expected an increase of $4,000 to $848,000.
Other payments that will be affected include Newstart Allowance, which will increase by $4.40 per fortnight for singles with no children and $3.90 a fortnight each for members of a couple, and Rent Assistance rates.
The payment increase comes after Prime Minister Scott Morrison announced the Government is set to abandon the previous plan to raise the Age Pension access age to 70.
Mr Morrison made the surprise announcement, that is yet to be formally approved by Government, in response to a viewer’s question on The Today Show last week.
The qualifying age for the pension currently sits at 65 years and six months and will rise by six months every two years until it reaches 67 in 2023.
Indexation rates for pensions and allowances are adjusted biannually in March and September. Pension rates are based on prices and wages, while allowance rates are linked to the consumer price index (CPI).
For more information regarding Age Pension rates, contact the Department of Human Services here.