Pension increase 2023

Pension payments to increase up to 6.6%

Learn more about the annual CPI and what it means in relation to your pension

Each year in October the amount of your State Super pension is adjusted to reflect the percentage movement in CPI from one June quarter to the next June quarter. This adjustment has most often historically resulted in an increase in your pension, but it can be decreased if the CPI adjustment is negative (however, there is a cap on negative CPI rates so if the negative adjustment is less than 1.1%, the pensions will not be adjusted).

The legislation to index pensions to the CPI was introduced following a period of significant inflation in the 1970s.

The movement in the CPI (All Groups Sydney Index) from 30 June 2022 to 30 June 2023 was 6.6%. The adjustment rate for State Super pensions is therefore 6.6% for this year.

State Super pensions will be adjusted from the first pension payday in October 2023, which is on Thursday 5 October this year. Pensions commencing during the first three quarters in the financial year receive a partial CPI adjustment, while no adjustment is made to pensions commencing in the final quarter.

Rise in national CPI

Annually, the national CPI rose 6.0%, with new dwellings (+7.8%), rents (+6.7%) and domestic holiday travel and accommodation (+13.9%) the most significant contributors.*

This rise in costs is reflected in this year’s increase to our State Super pensions, being the largest increase in more than 33 years (in 1990 it was 8.1%).

What is the CPI?

Simply defined, the Consumer Price Index (CPI) measures the change in the price of a fixed basket of goods and services purchased regularly by household consumers from one period to another. The Australian Bureau of Statistics (ABS) measures the cost of a set list of items in order to calculate a CPI rate for each of the eight State and Territory Capital Cities. They also calculate a weighted average of the eight Capital Cities, which is generally the CPI that we hear about on the news.

The CPI rate that is used to adjust your State Super pension each year is the All Groups Sydney Index which simply means it is a CPI rate based on Sydney prices and includes all the categories in the standard basket.