Youth Allowance, Austudy and carer payments will rise by 6.1% in the biggest increase in decades

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Young people, students and caregivers will receive the biggest increase in their Social Security payments in decades on New Year’s Day.

Payments will increase by 6.1% from 1 January for people receiving youth allowance, Austudy and carer’s allowance. The increase is part of a routine adjustment to keep up with increases in the consumer price index.

Amanda Rishworth, the social services minister, said the increase in indexation would help ease the pressure from the rising cost of living.

“It will have a significant impact on the hip pockets of young people studying, looking for work or receiving the Disability Support Pension if they are under 21 and have no children,” Rishworth said.

Related: ‘Demoralizing’: life on payment of sub-poverty job seekers exposed in new report

Youth allowance recipients will see the biggest increase in the indexation of their payment since it began in 1998.

The payment of the allowance to young people will increase from $19.10 to $41.40 per fortnight, depending on their situation. Austudy recipients will see an increase of between $32.40 and $41.40 per fortnight.

Disability Support Pension recipients under the age of 21 and without children will receive payment increases of between $27.40 and $40.70 per fortnight, including the Young Disabled Supplement.

The rates of abstudy and support payments for separated children will also increase, as will carer’s allowance, mobility allowance, double orphan’s pension and pharmaceutical allowance.

“With the cost of living rising, we need to ensure that students and young people can cover basic costs while still focusing on their education and career aspirations,” Rishworth said.

Other allowances such as jobseeker’s allowance and parental allowance are indexed every six months and will be reviewed in March.

Cassandra Goldie, chief executive of the Australian Social Services Council, said payments were still too low.

“Indexation does not provide the real increase in income support that so many people desperately need because these payments were totally inadequate before the prices of food, rent, medicine, fuel and other essential products do not increase.”

She said the routine indexation of Youth Allowance and Austudy only happens once a year, in January. “This is one of the main reasons why Youth Allowance is so much lower than JobSeeker.”

The Jobseeker’s Rate is currently $668.40 per fortnight if you are single with no children, while Youth Allowance is $313.80 for those living at home and $530.40 if you live independently.

The maximum rental assistance rate, which is provided in addition to a range of payments, is $73 per week. But it’s lower for those who share the rent — just $50 a week, Goldie said.

Anglicare’s rental snapshots repeatedly show that there are no affordable rentals for people on Youth Allowance.

“The federal government must urgently increase income support payments, including the Youth Allowance, to at least $73 a day so everyone can cover basic needs,” Goldie said.

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