Indexation to Centrelink payments ‘barely scratches surface’ of soaring living costs, say critics

The federal government has been urged to boost fortnightly welfare payments beyond “routine indexation” which has been blasted as “completely out of step with the reality of living costs”.

More than one million Australians are set to benefit from a cash increase to a raft of income support payments — including Youth Allowance, Austudy, Youth Disability Support Pension and Carer Allowance — from January 1.

The payments are “adjusted in line with cost of living changes”. But the Australian Council of Social Service say they “barely scratch the surface” and leave many at risk of falling through the social security safety net.

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“The soaring cost of rent, food, and essentials is driving people on income support payments deeper into poverty,” ACOSS chief executive Cassandra Goldie said.

“People receiving income support are being forced to make impossible choices between eating, paying rent, or accessing healthcare.

“Routine indexation adjustments barely scratch the surface, and the current rates are completely out of step with the reality of living costs.”

In the year to October, the price of bread and cereal was up 3 per cent, while fruit and vegetables (8.5 per cent) and meat and seafood (1.3 per cent) also increased, according to monthly consumer price data from the Australian Bureau of Statistics.

Alcohol (3.2 per cent), rent (6.7 per cent) and insurance (6.3 per cent) was up in the same period.

Goldie said the government’s “nominal” indexations “leave people behind” and urged “a real increase to ensure a liveable base rate”.

As with JobSeeker and pensions, ACOSS wants Youth Allowance and Austudy indexed every six months.

“Young people are being forced to wait 12 months before they see an indexation increase in their payments, even when inflation hits record highs,” Goldie said.

“By the time the slight boost arrives, they may no longer be eligible or still enrolled, effectively missing out on income that should have helped keep their heads above water during their studies.”

How much payments will increase

Single recipients of Youth Allowance who are over 18-years-old and living at home will receive an extra $17.30 a fortnight, boosting their payment from $459.80 to $477.10.

Partnered recipients on Youth Allowance without children will receive an extra $24.30, with the maximum fortnightly rate rising to $670.30.

Australia’s 600,000 carers will receive an extra $5.80 every two weeks.

For many, “that’s not even going to buy a loaf of bread, a box of tissues, or a can of baked beans”, Greens Senator Penny Allman-Payne said of the increases.

Social Services Minister Amanda Rishworth said “payments are adjusted in line with cost of living changes to ensure people have more money in their pockets”, without adding to inflation.

“We want to reduce disadvantage and maintain Australia’s strong and sustainable social safety net by providing relief to those most in need,” Rishworth said.

A complete list of January 1 payment increases can be found on the Department of Social Services website.