Breaking: Centrelink Payments Pension Set for Biggest Rise in 2025

Approximately five million Australians receiving Centrelink payments pension will see a welcome boost to their incomes this Friday. This increase comes as support payments are adjusted to keep pace with inflation. Starting this Saturday, the Centrelink payment increase will affect various welfare recipients across the country.

Single adult pensioners will receive an additional £29.70 per fortnight, bringing their total pension rates to £1,178.70. Meanwhile, couples will see their payments rise by £22.40 to reach £888.50 per fortnight. JobSeeker payments are also increasing, with single recipients aged 22 or older without children getting an extra £12.50, totalling £793.60. Additionally, the single-parent payment will go up by £15.70 to £998.20. These Centrelink payments 2025 adjustments are part of the regular indexation system designed to help recipients manage rising living costs.

Government Announces Record Centrelink Payment Increase

The federal government has announced the most substantial Centrelink payment increase in recent years, set to commence from 20 September 2025. Social Services Minister Tanya Plibersek confirmed that more than 5 million recipients will benefit from these changes, including over 2.6 million Age Pensioners.

For those receiving the Age Pension, Disability Support Pension or Carer Payment, singles will see their payments rise by AUD 45.41 per fortnight, bringing the total fortnightly payment to AUD 1802.22. Couples will receive an increase of AUD 68.50 combined fortnightly, with each person receiving AUD 34.25 more, totalling AUD 1358.51 per person.

Furthermore, JobSeeker recipients over 22 years without children will receive an extra AUD 19.11, reaching AUD 1213.41 fortnightly. Single parents will get an additional AUD 24.77, bringing their total to AUD 1571.34 per fortnight, while partnered parents will see an increase of AUD 17.43.

Commonwealth Rent Assistance rates will likewise increase, though more modestly, with singles receiving an extra AUD 5.20 fortnightly. Youth Allowance and ABSTUDY payments for those aged 22 and over will consequently see similar adjustments.

“Thanks to indexation, millions of Aussies will receive a boost to their payment to help them cover everyday costs like groceries and healthcare,” Plibersek stated. The changes will apply automatically, with recipients seeing the increased amounts in their accounts from 20 September.

Indexation Drives Centrelink Payments Increase

Centrelink payments are regularly adjusted through a systematic process called indexation, which is designed to preserve welfare recipients’ purchasing power. This mechanism ensures that pension rates maintain their value despite rising living costs.

Centrelink payments are indexed based on several economic indicators.”Adjustments to the Age Pension, Disability Support Pension, and Carer Payment are based on two key indicators of inflation: the Consumer Price Index (CPI) and the Pensioner and Beneficiary Living Cost Index (PBLCI). The PBLCI specifically measures price changes experienced by pensioner and beneficiary households.

Indexation happens quarterly for certain payments throughout the year. However, pension rates are typically adjusted twice annually—on 20 March and 20 September. During these periods, Services Australia automatically applies the changes, requiring no action from recipients.

After indexation, recipients can verify their updated payment amounts through their Centrelink online accounts or the Express Plus Centrelink mobile app. Those seeking details about new payment rates can visit the Department of Social Services website.

Although anti-poverty advocates argue these increases are insufficient to address financial hardship, the indexation system remains fundamental to Australia’s welfare framework. As Social Services Minister Tanya Plibersek noted, the system is “grounded in fairness”, helping recipients manage everyday expenses during periods of inflation.

Deeming Rate Changes Impact Part-Pensioners

Alongside the Centrelink payment increases, part-pensioners face significant changes as deeming rates rise for the first time since 2020. Deeming rates, which determine assumed income from financial assets for pension eligibility purposes, will increase on 20 September 2025 after a five-year freeze.

The lower deeming rate will triple from 0.25% to 0.75%, applying to the first AUD 98,161.17 of a single person’s financial assets and the first AUD 162,378.76 for pensioner couples. The upper deeming rate will simultaneously rise from 2.25% to 2.75% for assets above these thresholds.

This adjustment particularly affects part-pensioners with investment income. Of the 771,000 recipients whose payments are affected by deemed income, approximately 60% are age pensioners. Many will see reduced pension payments as their assessed income increases, even if their actual investment returns remain unchanged.

For instance, these changes could result in a fortnightly reduction of AUD 36.70 in pension payments for some couples. Nevertheless, since deeming rates remain relatively low by historical standards, many recipients will still benefit from the pension indexation occurring on the same day.

The government indicated this is the first in a series of phased increases, with future adjustments to be guided by the Australian Government Actuary. This decision will save the deficit-ridden budget approximately AUD 2.75 billion.

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Conclusion – Centrelink Payments Pension

The upcoming Centrelink payment increases undoubtedly represent a significant development for welfare recipients across Australia. Overall, more than five million Australians will benefit from these adjustments, with Age Pensioners seeing the most substantial rises in their fortnightly payments. Though these increases aim to help recipients manage rising living costs, the simultaneous rise in deeming rates will certainly affect part-pensioners differently, potentially reducing their net gains.

Accordingly, while many recipients will welcome the additional funds, others might find the changes bittersweet. The government’s decision to triple the lower deeming rate after a five-year freeze will affect approximately 771,000 recipients, primarily age pensioners with investment assets. Nevertheless, most welfare recipients will still experience a net positive change when the new rates take effect on 20 September.

The indexation system, despite criticism from anti-poverty advocates who argue the increases remain insufficient, continues to serve as the fundamental mechanism for preserving purchasing power amid inflation. Subsequently, these payment adjustments reflect the government’s attempt to balance budget constraints with social welfare responsibilities, as evidenced by the projected AUD 2.75 billion in budget savings from deeming rate changes.

Therefore, Australians receiving Centrelink payments should carefully review their updated payment amounts through their online accounts or the Express Plus Centrelink mobile app after 20 September. These changes, while automatic, will affect different recipient groups in varying ways, making personal financial planning especially important for those relying on these payments for their daily needs.