Indexation of the age pension

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The Budget proposal is to index the age pension (and certain other pensions) by reference to the Consumer Price Index. This change will apply from 1 September 2017. Currently, the age pension is increased by reference to whichever of the following indices produces the most favourable outcome: Consumer Price Index, Male Total Average Weekly Earnings and the Pensioner and Beneficiary Living Cost Index.

While this change will not reduce the age pension, it will have the effect that the age pension will not increase as fast as would have been the case if the current indexation arrangements were to continue.