Centrelink New Year cash boost: Youth Allowance, Austudy, Caregivers, Abstudy changes
In the new year, benefits will rise for many – but interest rates will rise… though not immediately.
Australia’s one million pupils, students and carers will receive a boost to Centrelink benefits on New Year’s Day.
However, they won’t be enough to keep up with the rising cost of living because the cash boosts are indexed to outdated inflation rates.
January will also be the first month since April in which the Reserve Bank of Australia will not raise interest rates – just because it is the only month where the board does not meet.
The RBA is tipped to keep raising rates until at least mid-year, with major banks expecting home prices to continue falling into 2023.
Australia’s one million pupils, students (tennis players from Melbourne University, pictured) and carers will receive a boost to Centrelink benefits on New Year’s Day
Australians who study get a boost to their Youth benefit and Austudy While the Surcharge for informal carers is increasing to help benefit recipients cope with the cost of living crisis.
Social assistance benefits will increase on 1 January
YOUTH ALLOWANCE (living at home): $19.10 every two weeks up to $332.90 from $313.80
YOUTH ALLOWANCE (living away): $32.40 every two weeks up to $562.80 from $530.40
YOUTH ALLOWANCE (single with children): $41.40 every two weeks up to $720.40 from $679
AUSTUDY (single without children): $32.40 every two weeks up to $562.80 from $530.40
AUSTUDY (single with kids): $41.40 every two weeks up to $720.40 from $679
ABSTUDY: $22.40 per fortnight up to $389.40 from $367 for Aboriginal and Torres Strait Islander students and apprentices aged 18 to 21
NURSING ALLOWANCE: $8.30 every two weeks up to $144.80 from $136.50
Child benefit increases by $19.10 to $41.40 every two weeks, depending on whether a recipient lives at home or has dependent children.
Social Affairs Minister Amanda Rishworth hailed the increase in youth benefits as the most generous indexation since the social measure was launched in 1998.
“With the cost of living rising, we need to ensure that students and young people can cover basic costs while they focus on their studies and career aspirations,” she said.
Youth benefit recipients, who are single students or apprentices age 24 or younger, will see their biweekly payments increase by $19.10 to $332.90.
Single parents receiving child support receive a $41.40 biweekly boost, bringing the payment to $720.40.
Austudyfor single students without children, increases by $32.40 every two weeks to $562.80.
The Austudy payment for single students with children increases by $41.40 every two weeks to $720.40.
Abstudyfor Aboriginal and Torres Strait Islander students and apprentices, increases by $22.40 every two weeks to $389.40.
The Allowance for caregiver increases by $8.30 every two weeks to $144.80.
The 6.1 percent increase in those benefits is well below the annual inflation rate of 7.3 percent in the September quarter — the worst in 32 years.
That’s because those increases in Social Security benefits will be tied to the headline inflation rate of 6.1 percent in the June quarter.
Under the Social Security Act 1991, student payment increases that take effect on New Year’s Day are tied to the headline inflation of the previous fiscal year.
“Indexation factors are determined by comparing consumer price indices across specific points,” a spokesman for the Department of Social Services told Daily Mail Australia.
In previous years, it was no problem for welfare gains to be linked to a six-month old consumer price index, from the year to June 30, because inflation barely moved.
But at the beginning of 2023, after inflation, welfare recipients will actually receive a substantial discount on their benefits.
The Reserve Bank’s eight rate hikes in 2022 are expected to be followed by another hike in February.
The Big Four banks agree that the RBA money rate will rise after the Australian Bureau of Statistics released January 25 inflation data for the December quarter.
The Reserve Bank’s eight rate hikes in 2022 are expected to be followed by another hike in February. January is the first month since April where there won’t be a monthly RBA rate hike, just because the board doesn’t meet in the middle of summer except in extraordinary circumstances (pictured shows a terrace in Sydney being auctioned)
Covid PCR test discount ends
As of New Year’s Day, PCR tests for Covid are no longer free.
Australians who want a free PCR test to detect if they have the virus must get a referral from their doctor or nurse.
A year after drugstore tests sold out, the Department of Health said it was no longer necessary for everyone to get a free test.
As of New Year’s Day, PCR tests for Covid are no longer free (pictured is a Sydney nurse wiping an airline passenger’s nose at an airport clinic)
“There is no public health requirement or recommendation for low-risk individuals to undergo PCR testing,” it said.
With Australians no longer having to self-isolate if they test positive for Covid, the tests will be designed in 2023 to match people with the right drugs.
“Testing for Covid-19 will no longer be a surveillance tool, but will be more targeted and used to ensure rapid access to antiviral treatments,” the department said.
Concession card holders can still get free rapid antigen tests, which tell someone if they have an active virus in their body.
But starting Jan. 1, retirement homes will have a set allocation of RAT tests instead of weekly deliveries.
The Reserve Bank expects the consumer price index, or headline inflation, to hit a new 32-year high of eight percent.
This is more than double the RBA’s target of two to three percent.
January is the first month since April where there won’t be a monthly RBA rate hike, just because the board doesn’t meet in the middle of summer except in extraordinary circumstances.
The major banks all expect an increase of 0.25 percentage point in February, which would take cash rates to a new 10-year high of 3.35 percent, instead of 3.1 percent.
The Commonwealth Bank expects the February hike to be the last of this tightening cycle.
But ANZ and Westpac both expect further rate hikes in February, March and May, which would push cash rates to an 11-year high of 3.85 percent.
Westpac expects house prices in Sydney to fall by a further 8 per cent in 2023, while property values in Melbourne will fall by a further 10 per cent.
The banks are required to assess whether a potential borrower is able to cope with a three percentage point increase in the variable mortgage rate.
This reduction in borrowing capacity has led to a fall in house prices as several housing markets across Australia peaked for several months in 2022.
The 300 basis point rate hikes since May, when cash rates were still at a record low of 0.1 percent, marked the most severe pace of monetary policy tightening since the Reserve Bank issued a target cash rate in January 1990.
But SQM Research director Louis Christopher predicts big increases in home prices if the RBA cuts rates again in late 2023 and inflation peaks at eight percent.
He predicts an 8 to 12 per cent rise in property prices in Sydney, a smaller rise of 2 to 6 per cent in Melbourne, a moderate rise of 3 to 7 per cent in Brisbane and a whopping 9 to 13 per cent in Perth. .
This recovery in Sydney will be driven by the increase in underlying demand for housing due to the increase in arrivals from abroad, the return to office, the existing shortage of rental housing, the new stamp duty/land tax changes and the expected continued strength from Sydney’s economy,” he said.