The disability support pension (DSP) is set to increase in 2023. This has been confirmed by the Australian government. If you currently receive the DSP, it is important to understand these upcoming changes. This article explains everything you need to know about the DSP increase for 2023.
What is the Disability Support Pension?
The DSP provides financial support to people who are unable to work due to a permanent physical, intellectual, or psychiatric condition. To receive the DSP, your condition must be diagnosed by doctors and prevent you from working for at least 15 hours per week.
You also need to pass income and assets tests. The DSP helps recipients cover basic living costs like housing, food, medicine, and transport. As of September 2021, around 764,000 Australians received the disability support pension.
DSP Rates Will Increase in March 2023
In March 2023, the federal government will increase DSP payment rates. The exact percentage increase is still to be confirmed. However, it is expected to be based on growth in inflation and the Consumer Price Index (CPI) over the past year.
For context, the DSP increased by 2.1% in March 2022. The March 2023 increase could be around 5-6% based on current inflation forecasts from the Reserve Bank of Australia.
Estimating Your New DSP Payment Amount
To estimate how much your new DSP payment might be from March 2023, you can use the current payment rates and apply an estimated inflation increase percentage.
For example, the base maximum DSP payment for a single person with no children as of September 2022 is $987.60 per fortnight. If we apply a hypothetical 6% increase to this amount, the new estimated base rate would be around $1046.85 per fortnight.
However, your exact payment amount also depends on your relationship status, dependents, age, and income/assets. You can use the DSP payment calculator to estimate your new rate once the 2023 increase percentage is published.
Groups Calling for More Significant DSP Reform
While DSP recipients will welcome the increase in March, many advocacy groups argue the payment itself needs more significant reform. Organizations like the Australian Council of Social Service say the current DSP rates are simply too low to properly support recipients.
For example, in 2022 the base DSP rate for a single adult is around $987 per fortnight. However, research shows that when housing costs are factored in, this leaves recipients living below the poverty line.
As a result, groups like ACOSS, Every Australian Counts, and the Raise the Rate campaign are calling for a much larger increase of at least $50 per day. They say this is necessary for the DSP to actually cover basic costs and help people break out of poverty.
Other Government Supports for DSP Recipients
Along with the base DSP payment, there are other government supports available that recipients might be eligible for:
- Rent Assistance - for people who rent privately or through a community organization. Up to $145.80 per fortnight for singles.
- Pensioner Concession Card - provides concession discounts for things like prescription medicine, utility bills, public transport etc.
- Companion Card - provides a free ticket to certain events/venues for your carer or companion if you require attendant care support.
You can use the DSP payment estimator to check eligibility for additional supports based on your circumstances.
How to Plan and Budget for the DSP Increase
If you currently receive the DSP, there are steps you can take to plan and make the most of the increase in 2023:
- Review your budget - Make sure you understand where your money currently goes. This puts you in a good position to allocate the increase.
- Seek financial advice - A financial advisor can help you optimize your new income.
- Update your details with Centrelink - Make sure Centrelink has your updated relationship status, dependents, living situation, income etc. to calculate your new rate accurately.
- Factor in tax changes - The increase may impact how much tax you need to pay if your total income exceeds the tax-free threshold.
- Save any surplus - If possible, aim to save at least a portion of your increase rather than having your costs absorb it all. Even small regular savings can make a difference.
Frequently Asked Questions
How is the DSP increase amount decided?
The government bases the DSP increase on growth in inflation and the Consumer Price Index (CPI) so that payments retain their purchasing power. They do not simply increase at politicians' discretion.
When will the new DSP rates for 2023 be published?
The government will confirm and publish the new DSP rates in late February 2023, shortly before they take effect in March.
Will backpay be provided from 1 January 2023?
Unfortunately backpay is not provided for the period from 1 January to the date of rate increase. The new rate only applies from the actual increase date in March.
What is the current maximum base rate for the DSP?
As of September 2022, the maximum base DSP rate per fortnight is:
- Single - No children: $987.60
- Partnered - No children: $747.00 each
- Single - With dependent child(ren): $1157.10
Will the DSP be permanently indexed and increased every year now?
While DSP rates are very likely to increase most years with inflation, there is no legislation officially mandating this annually. The government still has discretion to adjust DSP indexing policies in future budgets if desired.
Conclusion
The disability support pension is set to increase in March 2023 in line with inflation. This will provide much needed additional assistance to cover rising costs of living. However, advocacy groups argue the system needs an overhaul to lift DSP recipients out of poverty long-term. As a recipient, make sure you understand how to estimate your new rate. And investigate other government supports you might be eligible for. Stay up to date on any developments related to DSP reform in future.
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