Starting September 20, 2025, Centrelink in Australia will further widen the gap between the last known pension payments and inflation in order to offer some much needed financial assistance to pensioners across Australia. Adjusting pension payments to inflation rates has become overdue in Australia, making this the largest pension adjustment in the last five years.
New pension payment increases
Starting September 20 2025, Age Pension payments recipients who are single will now receive 1,178.70, an increase of 29.70. Couples will receive an additional 44.80 and now receive a combined total of 1,777. For those on disability support pensioners will also receive an additional 29.70.
The targeting figures have been modified to 20 September 2025
| Pension Type | Increase per Fortnight | New Fortnightly Rate (Single) | New Fortnightly Rate (Each in Couple) |
|---|---|---|---|
| Age Pension | $29.70 | $1,178.70 | $888.50 |
| Disability Support | $29.70 | (Similar increase applies) | (Similar increase applies) |
Reasons for the Rise
The pensioners have benefited deeply due to the unabated inflation as it has increased the cost structure of food, energy, housing, and other daily expenditures. In the case of Australia, it pays pensions and index annually, in the month of March and September. To do which, it calculates Consumer Price Index, wages, and Pensioner and Beneficiary Living Cost Index to proportionally pay the adjustment. This thorough adjustment helps in framing the index and helps the pensioners to pay for their basic needs. In other words, they have the opportunity to buy and consume goods as they wish.
The Impact ON PENSIONERS
The 3.7 million Australians who access Centrelink payment, along with the cost of living due to inflation, will receive vital support as the payment rise. In particular, pensioners with a fixed income will find it easier to pay for their basic needs due to the rise in the living wage and improved standard of living. In addition, the pension supplement and energy supplement still constitute a part of the total payment which helps.
Additional Changes: Deeming Rates
In addition to pension increases, Centrelink has announced changes to deeming rates effective September 20, 2025. Rates associated with rules of use of the first $64,200 of financial assets lower will raise from 0.25% to 0.75%, while the upper deeming rates for assets above this threshold will soar from 2.25% to 2.75%. These changes remain as part of the income test for pensions and other payments, to the possible dismay of holders of financial investments: paying out much higher rates than before.
Automatic Adjustments and Eligibility
There is no need to apply for this increase, as pensioners will have the rates Centrelink pays out to them automatically changed to new levels based on the effective date. Eligibility criteria have remained untouched, but it is the new Centrelink rates whereby full and part pensioners now are paid, that will be more apparent in the immediate bank balances. Couple payments separated from one another as a result of illness will also comply as per the joint pensions now paid out to each user.
FAQs
Q1: When will the increased Centrelink pension payments start?
A1: The new pension rates will be effective on 20 September 2025.
Q2: Do pensioners need to apply for the increased payments?
A2: No, the increase is automatic and pensioners are paid the new amounts without having to do any work.
Q3: What causes these pension increases?
A3: Pensions are indexed for inflation and cost of living increases to help pensioners maintain their purchasing power.
Q3: How do changes in pension payments and their corresponding deeming rates impact payments?
A314: Higher deeming rates could affect investment income assessment which, in turn, may impact payment amounts for some pensioners.
