Adelaide pensioner Carol Hughes, 70, has a ritual she follows twice every year without fail. When March and September roll around, she marks the indexation date on her kitchen calendar and waits to see how her fortnightly payment has changed.
“It’s not about getting rich,” she said. “It’s about keeping up. Every dollar matters when you’re living on a fixed income.”
On 20 March 2026, Carol and millions of other Australians receiving the Age Pension will see their payments updated as part of Australia’s scheduled biannual pension indexation. Early projections indicate that the new rates could push the full single pension — including supplements — above $1,180 per fortnight for the first time, depending on the final economic figures confirmed in the days before implementation.
For retirees navigating grocery prices, energy bills, and insurance costs that remain well above pre-2022 levels, even a modest increase carries real weight. Here’s everything you need to know about what’s happening, why it’s happening, and what it means for your finances.
What Is Pension Indexation and Why Does It Happen?
Pension indexation is the mechanism by which Australia ensures that Age Pension payments don’t gradually lose their value over time. Without indexation, a fixed pension amount would buy less and less each year as prices rise — effectively delivering a real-terms pay cut to every pensioner, every year, without anyone making an explicit decision to cut benefits.
To prevent that erosion, the government adjusts pension rates twice a year — in March and in September — based on movements in three key economic benchmarks: the Consumer Price Index (CPI), which tracks changes in the cost of goods and services; the Pensioner and Beneficiary Living Cost Index (PBLCI), which measures cost changes specifically relevant to people living on government payments; and Male Total Average Weekly Earnings (MTAWE), which reflects broader wage growth in the economy.
The pension increases by whichever of these three measures has risen by the most over the preceding six months. The inclusion of the wage measure is particularly important — it means that if wages across the economy grow faster than prices, pensioners benefit from that growth too, keeping their standard of living connected to the broader community rather than falling behind it.
A Department of Social Services spokesperson summed up the intent clearly: regular indexation protects pensioners by adjusting payments in line with economic conditions, ensuring older Australians maintain their standard of living over time.
What Could the New Rates Look Like From March 20?
Final figures are only confirmed and publicly released in the days immediately before the indexation date, so the numbers below are projections based on available economic data rather than official announcements. They should be treated as indicative rather than definitive.
With that caveat clearly noted: early estimates suggest that single Age Pension recipients could see an increase of roughly $20 to $30 per fortnight, potentially moving the total single rate — including the Pension Supplement and Energy Supplement — above $1,180 per fortnight. Couples receiving the combined pension may see a combined increase in the range of $30 to $40 per fortnight. Recipients of the Disability Support Pension and Carer Payment will also see corresponding increases, as those payments are indexed on the same schedule.
These are not large numbers in absolute terms. But their significance is cumulative and consistent. A $25 fortnightly increase adds up to $650 over a full year — and for someone like Carol, who budgets carefully down to the dollar, that’s a meaningful contribution toward phone bills, prescriptions, or household repairs.
Projected Rate Comparison: Before and After March 20
| Payment Category | Current Rate (Approx.) | Projected Rate After March 20 |
|---|---|---|
| Single Age Pension (incl. supplements) | ~$1,150+ per fortnight | ~$1,180+ per fortnight |
| Couple (combined, incl. supplements) | ~$1,730+ per fortnight | ~$1,760+ per fortnight |
| Disability Support Pension (single) | Similar to Age Pension single rate | Indexed upward proportionally |
| Carer Payment | Similar to Age Pension rate | Indexed upward proportionally |
All figures are estimates based on early projections. Official rates will be confirmed by Services Australia shortly before March 20, 2026. Check your myGov Centrelink account after that date for your exact updated payment amount.
Why This Increase Matters in the Current Cost-of-Living Environment
It would be easy to look at a $20 or $25 fortnightly increase and dismiss it as token. But that response misses the context in which Australia’s pensioners are living in 2026.
While headline inflation has moderated significantly from the peaks of 2022 and 2023, the moderation in the rate of price growth does not undo the cumulative price increases that occurred during that period. Grocery prices, electricity bills, home and contents insurance premiums, council rates, and the cost of healthcare have all risen substantially and — critically — have not come back down. Pensioners are not dealing with the rate of inflation that existed three years ago. They are dealing with price levels that are structurally higher than they were before the inflation surge began.
Perth retirees Ron and Julie, who rely on a part pension alongside modest superannuation savings, put it plainly. Every indexation increase is immediately directed toward offsetting specific cost rises — this time around, insurance and council rates. “Without it, we’d fall behind,” Ron said. “It’s not a luxury. It’s treading water.”
That experience — of indexation as a tool for staying still rather than getting ahead — is typical of how many pensioners relate to these biannual adjustments. They are not windfalls. They are corrective measures designed to prevent a slow erosion of financial security.
Who Receives the Indexation Increase?
The March 20 indexation applies automatically to recipients of the Age Pension, the Disability Support Pension, the Carer Payment, and equivalent payments for eligible veterans. Both full pension recipients and those on a part pension will see an increase — though the exact amount for part pensioners will be proportional to their current entitlement rather than the full indexed rate.
No application is required. If you are currently receiving a qualifying payment, the updated rate will simply appear in your next scheduled payment after March 20. You don’t need to contact Services Australia, visit a Centrelink office, or take any action whatsoever to receive the increase.
The one area worth checking is whether your income or asset situation has changed in a way that might affect your pension eligibility or rate independently of the indexation. If you have recently inherited money, sold a property, changed your working arrangements, or had a significant change in superannuation balances, those changes may interact with the indexation in ways that affect your actual payment. If any of that applies to you, it’s worth speaking with a Financial Information Service officer — a free service available through Services Australia — before March 20.
Will Everyone Get the Full Projected Increase?
The short answer is: not necessarily. The indexation sets the maximum rate for a full pension, but many pensioners receive a rate below the maximum because of the income test or the assets test — or both.
If you are close to the income or assets threshold at which your pension begins to reduce, the indexation increase in the payment rate may be partially offset by a corresponding change in how the test applies to your situation. The thresholds themselves are also periodically reviewed, but not always on the same schedule as the payment rates, which can create complex interactions for pensioners right at the margin.
The key point is that your personal payment after March 20 may not change by exactly the same amount that headlines suggest. Checking your actual updated payment in your myGov Centrelink account after the indexation date is the only way to know your specific new rate with certainty.
What the Experts Are Saying
Retirement income analyst Emma Li describes pension indexation as one of the most important structural protections built into Australia’s retirement support system — precisely because it operates automatically and consistently, without requiring political decisions every six months about whether to increase payments.
“Without indexation, retirees on fixed incomes would see real declines in purchasing power year after year,” she explains. “Indexed pensions mean that the standard of living the system provides doesn’t slowly erode over a long retirement. That’s fundamental to the security the Age Pension is supposed to deliver.”
She does note, however, that indexation is not a perfect hedge against every cost pressure a retiree might face. Certain expenses — private health insurance premiums, for example, or the costs associated with age-related health conditions — have historically risen faster than general inflation. Pensioners who face high out-of-pocket healthcare costs or who live in areas where housing costs are rising sharply may find that indexation keeps them moving but doesn’t fully close the gap.
Planning Ahead After March 20
Once the new rates take effect, it’s worth taking a few minutes to update your household budget to reflect the change. If you’ve been running projections based on your current fortnightly income, adjusting those figures after the indexation date will give you a more accurate picture of where you stand for the rest of the first half of 2026.
If you work part-time and receive a part pension, check that your income reporting is up to date. Changes in the pension rate can interact with earned income in ways that affect your overall payment, and staying current with your reporting through myGov avoids the risk of an overpayment that would need to be repaid later.
For those who haven’t yet explored all the support they’re entitled to, the period around an indexation update is a good time to speak with a Financial Information Service officer. The service is free, confidential, and available to anyone receiving a Centrelink payment. Officers can help you understand whether you’re accessing all the supplements and concessions you’re entitled to, which — combined with the indexation increase — could make a more meaningful difference to your fortnightly budget than the payment increase alone.
Frequently Asked Questions
When exactly do the new rates take effect?
From 20 March 2026. Your first payment at the new rate will be your next scheduled Centrelink payment on or after that date.
Do I need to apply or contact Centrelink to receive the increase?
No. Indexation is automatic. If you are currently receiving a qualifying payment, the increase will be applied without any action on your part.
How much will single pensioners receive?
Current projections suggest the full single rate including supplements could exceed $1,180 per fortnight. Final figures will be confirmed by Services Australia shortly before March 20.
Will the Disability Support Pension also increase?
Yes. The DSP is indexed on the same schedule as the Age Pension and will see a corresponding increase.
What if I’m on a part pension — do I still benefit?
Yes, though your increase will be proportional to your current entitlement rather than the full indexed rate.
How can I see my new rate after March 20?
Log in to your myGov account and navigate to your Centrelink payment details. Your updated rate will be visible there after the indexation takes effect.
Will the assets and income test thresholds also change?
Thresholds are reviewed separately and not always on the same schedule as payment rates. Check the Services Australia website for current threshold information.
Small Increases, Real Impact
Carol Hughes will check her account on the morning of March 20 the same way she has for years — quietly, practically, with no great drama. If the projected increase arrives, she’ll note the new figure, update her budget spreadsheet, and move on. It won’t change her life. It will help her keep living it.
That’s what pension indexation is actually for. Not transformation. Not generosity. Just the consistent, automatic, unglamorous work of making sure that the payments millions of older Australians depend on keep pace with the world they’re living in.
March 20 is five weeks away. If your renewal, income reporting, or financial situation has changed recently, now is the time to check that everything is in order — so when that payment lands, it lands correctly.
Log in to myGov after March 20 to confirm your updated rate. And if you’re unsure whether you’re receiving everything you’re entitled to, call Services Australia’s Financial Information Service — it’s free, and it could make more difference than the indexation increase alone.