Pensions are adjusted each year in accordance with the percentage movement in the Consumer Price Index (CPI) (All Groups Sydney) from one June quarter to the next. The adjustment is paid from the first pension pay day in October each year. Where the CPI increases by any amount in a financial year, pensions will be adjusted by the amount of the CPI increase.
Pensions can also be adjusted downwards if the CPI is negative by more than 1.1%, however where a CPI is less than 1.1%, no adjustment is made to the pensions for the relevant year. While pensions are not reduced when the CPI decreases up to 1.1%, the decrease in the CPI is taken into account in determining the adjustments to pensions in future years.
It is important to note that a negative CPI adjustment cannot reduce a pension below the amount that was originally payable.
Pensions which were paid for less than the whole of the financial year before the October CPI adjustment are adjusted proportionately according to the number of full quarters in which you received your pension up to 30 June.
This proportionate adjustment is as follows:
- Pensions that began between 2 July and 1 October (inclusive) receive 75% of the full adjustment.
- Pensions that began between 2 October and 1 January (inclusive) receive 50% of the full adjustment.
- Pensions that began between 2 January and 1 April (inclusive) receive 25% of the full adjustment.
- Pensions that began between 2 April and 30 June (inclusive) are not adjusted at the following October.
SSS and SASS child pensions
Child pensions receive the full adjustment in October each year regardless of the date they began.
PSS child and other compensation-related pensions
Pensions for children, and certain other compensation-related benefits, are adjusted by reference to rates prescribed under the Workers Compensation Act 1987.
For more information refer to STC Fact Sheet 11: CPI Adjustment of your pension