Aussie pensioners winning from high inflation

The ABS today released cost of living indices for the June quarter, which shows that aged pensioners experienced the sharpest increase in their cost of living in 2021-22 (+5.2%); although it was below Australia’s headline inflation rate (+6.1%):

Australian cost of living index

Pensioners suffer biggest cost of living increase.

As explained by the ABS:

  • Transport was the main contributor for all five household types, with the price of Automotive fuel rising over 32%.
  • Age pensioner households had the highest annual increase (+5.2%). This is the largest annual increase since the September 2006 quarter for this household type. Food and Housing make up a higher proportion of expenditure for Age Pensioner households compared to the other household types.
  • Employee households had the lowest annual increase (+4.6%), mainly due to Mortgage interest charges falling over the year. Excluding Mortgage interest charges, the index for this household type would have risen 4.9%.

However, while age pensioners have experienced the biggest lift in their cost of living (5.2%), the aged pension will also be adjusted upwards by the CPI (+6.1%), which means pensioners are facing a real increase in their incomes.

This is the polar opposite of Australian workers, whose wages (+2.35% in the March quarter) are rising at a far slower pace than their cost of living, meaning their living standards are going backwards.

Unconventional Economist

Comments

  1. boomengineeringMEMBER

    If some pensioners fail the means test it indicates that paying your super today will be confiscated at reimbursement time. Same fraud.