Concern for pensioners who missed out

The global downturn has not deterred the government from delivering costly widespread pension reform, but welfare groups are angry that some pensioners have been left out.

The federal government will spend $14.2 billion over five years to lift the pensions of more than three million Australians.

From September, single pensions will receive a weekly increase of up to $32.49 and couples up to $10.14.

This will lift the single aged pension to around $320 a week.

But more than 350,000 single mums and dads on the parenting payment, and the unemployed will miss out.

Part pensioners who earn extra income will also loose part of their payments under changes to the income test.

The Australian Council of Social Service (ACOSS) chief executive Clare Martin says unemployed people will receive more than $100 less than the single aged pensioners because of the changes.

"The sole parents have been left behind and certainly (the) unemployed who are on a very low rate of allowance ... have been left way behind," Ms Martin told ABC Television.

"As unemployment grows in Australia we've got more Australians being left on a very unsustainably low allowance and (who) will really struggle to survive."

Families Australia is also concerned for the 224,500 long-term jobless families, who have at least one dependent child under 16 and at least one parent not working.

"They have relatively few resources at their disposal to face the recession. Targeted and effective support still needs to be delivered to these families", Families Australia chief executive Brian Babington said.

The federal government will also gradually lift the aged pension eligibility age from 65 to 67 years by 2023.

National Seniors Australia has welcomed the pension increase and rise in eligibility age.

"The government recognised how needy they (pensioners) were and showed concern for those struggling with rising (living) costs," chief executive Michael O'Neil said.

"Increasing the pension age is a sensible approach by the government as it recognised the needs of the ageing population."

But the Combined Pensioners and Superannuants Association says the weekly increase is not enough and lifting the age eligibility will drive more people into poverty.

"We have great fears about those pensioners who only have the pension as their sole source of income, as they are and always have been the group who are in most need of assistance," spokeswoman Charmaine Crowe she said.

"Our fear is that the $32 a week increase won't suffice for them."

The current age of 65 is in line with the Organisation for Economic Co-operation and Development (OECD) average, she said.

"It will increase poverty amongst the over 65s as they will be forced onto a NewStart Allowance which, as we all know, has not been increased in this budget."

The pension increases bring the single rate of the pension up to two thirds of the couple rate, as recommended in the Harmer pension review.

"These are the most significant reforms to the pension since it was introduced 100 years ago, and are a vital investment in preparing Australia for the future," Family Affairs Minister Jenny Macklin said in a statement.

The federal opposition was unavailable for comment.