From 20 September 2025, millions of pensioners across Australia are receiving higher payments following the government’s twice-yearly indexation review. The updated rates apply until 19 March 2026, and they have been introduced to help retirees, carers, and people with disabilities keep pace with stubborn inflation and rising costs of everyday living. Along with the increase in payment rates, the government has also raised income and asset test thresholds and revised deeming rates, which means changes not only for those already on a pension but also for Australians who may now qualify for a part pension.
How Much More Pensioners Will Receive
The immediate benefit is seen in higher fortnightly payments for both singles and couples.
- Single pensioners now receive $29.70 more per fortnight, taking their total to $1,178.70. Annually, this equals around $30,646.
- Couples on the full pension will see a combined rise of $44.80 per fortnight, or $22.40 each, bringing their total to $888.50 each every two weeks. Yearly, that works out to $46,202 combined.
These figures include standard supplements such as energy assistance but exclude any additional entitlements like rent assistance, which can be added on top depending on personal circumstances.
Why Pension Payments Have Increased
Twice a year, in March and September, pension rates are reviewed to ensure they align with inflation and wage growth. The September 2025 increase reflects rising costs in food, housing, and energy. For older Australians particularly reliant on government support, these adjustments provide stability and prevent welfare payments from losing value against real expenses.
While the increase may not cover all areas of financial pressure, it creates a structured level of certainty for households, especially those living on fixed incomes.
Deeming Rates: What Changed in September 2025
Alongside rate increases, the government also revised deeming rates, the figures used to estimate income returns on a person’s financial assets. Centrelink uses these assumed earnings to calculate eligibility and payment levels.
The new deeming rates are:
- Lower rate: 0.75%
- Upper rate: 2.75%
This increase in deeming is significant. For people with modest savings, the change might have little effect. But those with larger investments could find that their pension entitlement is reduced because Centrelink now assumes a higher return on their financial assets.
For example, a couple with higher superannuation savings or managed investments may see their part pension reduced under the new calculations, even though base pension rates are higher.
Updated Income and Asset Test Thresholds
The income and assets tests directly determine who qualifies for a full or part pension. From September 2025, these thresholds have been raised.
The changes mean:
- Some Australians who were previously ineligible may now qualify for a part pension for the first time.
- Part-pensioners may notice only a limited rise in their actual payments, as higher deeming rates could offset their gains.
- Full-pensioners benefit more clearly, since they receive the full fortnightly increase with no offsets.
This adjustment is particularly important for retirees on modest incomes or with moderate savings, as it gives them a little more room before payments begin to taper off.
Transitional Pension Rates
Although most recipients are on standard pension rates, transitional rates still apply to some older Australians who qualified before 2009 reforms. These transitional pensions have also been increased in line with indexation, ensuring consistency across all groups, even though fewer recipients remain in this category each year.
Who Benefits Most from This Increase
- Single full-rate pensioners are clear winners, as the $29.70 per fortnight payment directly boosts their budget.
- Couples on the full rate also gain, with a combined annual increase that provides nearly $1,200 extra across the year.
- Part-pensioners experience mixed results. Some will benefit from new income and asset thresholds, while others may lose out due to higher deeming assumptions.
- Newly qualified recipients: Australians who had previously fallen just outside the asset or income cut-offs may now qualify for a pension, which represents a significant change for many households.
Why This Matters for Households
For retirees and people with disabilities, the September increase comes at a critical time. Energy prices, medical costs, and groceries remain high, leaving many households struggling to stretch their budgets. This increase may not solve all cost-of-living pressures, but it provides reliable and predictable support over the next six months.
The updated deeming rates do make the system more complex for those with investments. Some households will need to reassess how their savings interact with their pension eligibility. It may also be wise for retirees to check with Centrelink or financial planners to confirm how the new thresholds impact them.
Looking Beyond September 2025
The next automatic review of pensions will take place in March 2026. Until then, the new payment rates and deeming rules remain in place, alongside the updated eligibility criteria. These measures underline the government’s balancing act between providing social security and maintaining budget discipline.
For seniors with minimal savings or alternative income, these increases are straightforward and very welcome. For households with superannuation or investments, the outcome is more nuanced, and adjustments to personal financial planning may be required.
Conclusion
The September 2025 pension increase is one of the most important support adjustments this year, lifting fortnightly payments while also updating deeming rates and eligibility thresholds. Singles now receive over $1,178 every two weeks, while couples take home $888.50 each, with overall annual gains adding stability at a time of economic pressure.
Although the changes bring clear benefits for pensioners who rely almost entirely on government support, outcomes vary for those with higher savings or other income sources due to shifts in deeming rules.
What remains clear is that these payments ensure millions of Australians dependent on the Age Pension, Carer Payment, or Disability Support Pension do not fall behind during one of the most challenging cost-of-living periods in recent memory.