{"id":101143,"date":"2025-02-07T07:25:00","date_gmt":"2025-02-06T20:25:00","guid":{"rendered":"https:\/\/en.econostrum.info\/au\/?p=101143"},"modified":"2025-02-06T20:38:17","modified_gmt":"2025-02-06T09:38:17","slug":"pensioner-living-costs-fall-since-2020","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/au\/pensioner-living-costs-fall-since-2020\/","title":{"rendered":"Pensioner Living Costs Fall for the First Time Since 2020"},"content":{"rendered":"\n

The latest data from the Australian Bureau of Statistics (ABS)<\/strong> highlights an unusual shift in living costs for certain Australian households. A combination of government adjustments<\/strong> and economic trends<\/strong> has influenced these changes. A closer examination provides further insight into the scale and implications of these developments.<\/p>\n\n\n\n

Factors Behind the Decline<\/h2>\n\n\n\n
The ABS<\/strong><\/a> has reported a 0.1% decrease<\/strong> in living costs for pensioner and beneficiary households<\/strong> in the December 2024 quarter<\/strong>. This marks the first quarterly decline since June 2020<\/strong>, providing a slight relief to households primarily dependent on government payments<\/strong>.<\/p>\n\n\n\n
The decrease has been attributed to a mix of government subsidies<\/strong> and falling energy prices<\/strong> :<\/p>\n\n\n\n
\n
The 2024-25 Commonwealth Energy Bill Relief Fund<\/strong> helped reduce electricity costs<\/strong>, which offset price increases in other areas.<\/li>\n\n\n\n
A 10% increase in Commonwealth Rent Assistance (CRA)<\/strong>, implemented in September 2024<\/strong>, lowered rental expenses for eligible households.<\/li>\n\n\n\n
A greater number of households reached the Pharmaceutical Benefits Scheme (PBS) safety net threshold<\/strong>, leading to reduced out-of-pocket medical expenses<\/strong>.<\/li>\n<\/ul>\n\n\n\n
Broader Trends in Living Costs<\/h2>\n\n\n\n
While pensioner households benefited from these measures, employee households<\/strong> saw a 0.4% rise<\/strong> in their living costs. According to Michelle Marquardt<\/strong>, head of price statistics at the ABS, this increase was mainly due to higher mortgage interest charges<\/strong>, as more homeowners transitioned from fixed to higher variable-rate mortgages<\/strong>.<\/p>\n\n\n\n
Although inflation<\/strong> fell to 3.2% over the year to December<\/strong>, some goods and services still experienced price increases. However, these were tempered by:<\/p>\n\n\n\n
\n
Lower electricity and fuel prices<\/strong><\/li>\n\n\n\n
Slower growth in insurance premiums<\/strong><\/li>\n<\/ul>\n\n\n\nHow Pensioners Compare to Other Household Groups<\/h3>\n\n\n\n
The decline in pensioner living costs<\/a><\/strong> stands out when compared to trends across different household types:<\/p>\n\n\n\n
\n
Employee households<\/strong> experienced the largest increase in living costs (+0.4%)<\/strong>, mainly due to rising mortgage interest charges<\/strong>.<\/li>\n\n\n\n
Self-funded retirees<\/strong> and age pensioner households<\/strong> had the smallest annual increase (+2.5%)<\/strong>, as they are less affected by rising rents and mortgage rates.<\/li>\n\n\n\n
Over the last 107 quarters<\/strong>, only eight<\/strong> recorded a decrease in pensioner living costs, highlighting the rarity of this trend, according to Dr Ben Phillips<\/strong> from the Australian National University<\/strong>.<\/li>\n<\/ul>\n\n\n\n
Inflation and Price Movements<\/h3>\n\n\n\n
\n
The annual inflation rate<\/strong> fell to 3.2% in December 2024<\/strong>, reflecting a significant decline<\/strong>.<\/li>\n\n\n\n
Factors contributing to lower living costs included:\n
\n
Falling electricity prices<\/strong><\/li>\n\n\n\n
Lower fuel costs<\/strong><\/li>\n\n\n\n
Slower growth in insurance premiums and mortgage interest charges<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n
However, some goods and services still saw price increases<\/strong>, impacting affordability.<\/li>\n<\/ul>\n\n\n\nUncertain Outlook as Government Support Nears Expiry<\/h2>\n\n\n\n
The ABS<\/a> report underscores the significant role of government assistance<\/strong> in reducing pensioner living costs. However, economic experts, including Dr Ben Phillips<\/strong>, caution that this relief may be short-lived<\/strong>.<\/p>\n\n\n\n
Key concerns include:<\/p>\n\n\n\n
\n
The Energy Bill Relief Fund<\/strong> is scheduled to end on 30 June 2025<\/strong>, which could lead to a rebound in electricity costs.<\/li>\n\n\n\n
The Reserve Bank of Australia (RBA)<\/strong> will meet in mid-February<\/strong> to review interest rates<\/strong>, potentially affecting household expenses.<\/li>\n<\/ul>\n\n\n\n
Comparison With the Consumer Price Index (CPI)<\/h3>\n\n\n\n
\n
The Pensioner and Beneficiary Living Cost Index (PBLCI)<\/strong> increased by 2.8% over the year<\/strong>, compared to 2.4% for the Consumer Price Index (CPI)<\/strong>.<\/li>\n\n\n\n
Government pensions are indexed against the higher of these two figures<\/strong>, ensuring pensioners maintain purchasing power<\/strong> despite economic fluctuations.<\/li>\n<\/ul>\n\n\n\n
For now, the data suggests temporary relief<\/strong> for pensioner households, but the sustainability of affordability<\/strong> will depend on future economic conditions and policy decisions<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"
New data reveals a rare shift in pensioner living costs, influenced by multiple economic factors. The long-term impact remains uncertain as key financial policies evolve.<\/p>\n","protected":false},"author":9,"featured_media":101144,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[46,45],"tags":[],"class_list":["post-101143","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-social-welfare","category-retirement","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/101143","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/comments?post=101143"}],"version-history":[{"count":1,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/101143\/revisions"}],"predecessor-version":[{"id":101145,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/101143\/revisions\/101145"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media\/101144"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media?parent=101143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/categories?post=101143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/tags?post=101143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}