Pension won't rise in September: inquiry; JobSeeker boosted

Rebecca Gredley
(Australian Associated Press)

Aged pensioners won't see an increase in their payment this September, with the next possible rise in March.

Department of Social Services deputy secretary Nathan Williamson has confirmed to a Senate inquiry that there will be no increase due to a drop in the consumer price index.

"Based on the calculation for indexation, if it's negative we don't reduce the pension but we also don't increase it," he said on Tuesday.

The Combined Pensioners and Superannuants Association says it's the first time since 1931 the pension hasn't increased.

"Many pensioners, especially singles with the pension as their sole source of income, will be very disappointed at this turn of events," the group said.

"Their only comfort is that the pension can't go down. It would have but for that rule."

The pension is indexed twice a year in March and September.

It will be known in February if the pension will increase next March.

The inquiry has also heard from the minister responsible for Australia's welfare system, who is unsure how much the unemployment benefit will be after the coronavirus pandemic.

JobSeeker has been boosted during the health crisis to a maximum $1100 per fortnight through to September, and then $800 until the end of the year.

The payment, formerly known as Newstart, paid $40 a day prior to the pandemic and hasn't risen in real terms in more than 25 years.

Social Services Minister Anne Ruston says it's too early to say if it will return to the $40 a day level.

"We will be making further statements in coming months so we can provide ongoing certainty," she said.

"But right now I don't know whether we're going to have a situation where we have clarity around what post-coronavirus Australia is going to look like by the end of the year or not.

"I don't have a crystal ball."

There have been wide-ranging calls, including from former Liberal prime minister John Howard and Reserve Bank governor Philip Lowe, for the payment to increase from its pre-pandemic level.

About 1.6 million Australians are expected to be on JobSeeker or Youth Allowance in the September quarter, before dropping to about 1.5 million in the December period.

About 6000 Australians are expected to be affected when the liquid assets waiting period is reintroduced in late September.

It means people applying for JobSeeker who meet a certain threshold in assets will have to wait up to 13 weeks before receiving a payment.

The government still plans to introduce draft legislation which would double the wait period to 26 weeks for people who have more than $18,000.