- 0.0% adjustment for PSS, CSS, and MSBS indexed pensions for January 2021
- 0.0% adjustment for DFRDB indexed pensions for recipients for January 2021 (regardless of age)
The Australian Bureau of Statistics has released the Consumer Price Index (CPI) data for the September 2020 quarter showing that the index has decreased to 116.2 from 116.6 for the March 2020 quarter.
While the index is negative over the six-month period, this should result in no change for indexed pensions from the Commonwealth Superannuation Scheme (CSS), Public Sector Superannuation Scheme (PSS) and Military Superannuation and Benefits Scheme (MSBS or MilitarySuper) from the first pension payday in January 2021.
The indexed portion of pensions from the Defence Force Retirement and Death Benefits (DFRDB) Scheme involves different rates of indexation depending on the recipient’s age at the adjustment date.
DFRDB recipients aged less than 55 years receive the CPI-linked adjustments on the indexed portions of their pensions.
The indexed portions of DFRDB pensions for recipients aged over 55 years of age is the greater of the CPI increase, the change in the Living Cost Index for pensioners and beneficiaries, or the increase needed to maintain the value of an indicative pension with 27.7% of Male Total Average Weekly Earnings (MTAWE).
Due to a negate rate in the relevant Living Cost Index, the 0% CPI linked adjustment will apply in January 2021 for all DFRDB recipients.
See also: DFRDB pension increases
While not applicable in January 2021 due to the negative CPI result, a pro rata increase would normally apply to any indexed pensions started less than six months before the indexation date.
Historical CSS, PSS and MSBS indexed pension increases
| Date of increase | Rate |
| January 2021 | 0.0% |
| July 2020 | 1.0% |
| January 2020 | 1.1% |
| July 2019 | 0.5% |
| January 2019 | 0.8% |
| July 2018 | 1.1% |
| January 2018 | 0.8% |
| July 2017 | 1.0% |
| January 2017 | 1.1% |
| July 2016 | 0.2% |
| January 2016 | 1.1% |
| July 2015 | 0.4% |
| January 2015 | 0.9% |
| July 2014 | 1.3% |
| January 2014 | 1.6% |
| July 2013 | 0.6% |
| January 2013 | 2.1% |
Its about time the goverment got rid of the cpi for pension increases this is so out of date, how can petrol jump 20 cents a litre overnight and electric bills rise by many dollors and the cpi is a lousey 0.08%.a review should be held to get rid of this old out of date system.
The problem remains with the Consumer Price Index (CPI) data is that it is controlled by the ABS and the ABS decide what goes IN and what they take OUT.
There is no connection with the real inflation rate that real people pay !!
1.1% is too much. Can I give some money back to the government, please.
Because the ABS take into account techonolgy such as Mobile phones, whereas the latest model iphone can be $1200 and next year its worth $800.
when I took my indexed pension in 2005 it was equivalent to the average salary. In 2019 it is nothing like it. How misled was I.
Hi Les, Is there any entity who provides guidance around PSS pensions other than Financier Planners?? And if there is a group lobbying for increased CPI or another calculation system. Thanks in advance.
Harps, not really, but plenty planners me included will provide fee for service advice. The key is not to ensure whoever you see knows what they are talking about. There is a Commonwealth Super Members Association which is effectively a lobby group. JB
When people whinge about define benefits…
My understanding is that after a great deal of effective lobbying by former members of the ADF that their pensions were increased by either the increase in average weekly earnings percentage or the CPI whichever was the greater!
Old Age Pensions are increased by the percentage increase of average weekly earnings as it reflects the correct increases in the cost of living. The CPI does not. Some time ago the Federal Gov attempted to align old age pensions to the CPI but the outcry forced them to abandon the idea. Too many items are excluded from the calculations of a CPI to correctly reflect an accurate rate of the increased cost of living. Commonwealth employees on a CSS pension can look forward to an ever decreasing ability to maintain their purchasing power.
too true ! real CPI should be based on health care, groceries, utility bills and council rates. these are always going up in price.
1.1% is too much. Can I give some money back to the government, please.
Can’t find the DFRDB increase (and for over 55s)
On Sun, 22 Dec 2019 at 10:15 pm, blog.superinfo.com.au wrote:
> Les commented: “Can’t find the DFRDB increase (and for over 55s)” >
Hi Peter. I’ve added a page for DFRDB pension increases. I’ve also add information about the indexation arrangements applicable from 1 July 2014. More info is available from https://blog.superinfo.com.au/2019/12/29/dfrdb-pension-increases/.
Hi Les
I believe the Pensioner and Beneficiary Living Cost Index (PBLCI) for the same period was 115.5 for September quarter compared with 114.5 for the March quarter. This would produce an increase of 0.9%, which is less than the 1.1% CPI. I haven’t performed the Male Total Average Weekly Earnings (MTAWE) calculation, which is the third formula to compare for DFRDB pensioners over 55, but based on previous history, the DFDRB increase would look to be all-round 1.1% for January 2020. I hope this helps and wishing a safe and Merry Christmas to our veterans as well as everyone in the broader ADF and APS community. Kindest wishes, Dan Blackman
We are too old too few and the govt does not give a stuff for ex service individuals. I think they will be happy once we are all dead.