An analysis by the Australian Bureau of Statistics has shown cost of living pressures for pensioners are easing.
The annual rate of the cost of living for pensioners has dropped to three per cent over 2011, less than the Consumer Price Index (CPI) at 3.1 per cent. and down sharply from the 4.1 per cent recorded in the year to September.
The cost of living fell for pensioners in the December quarter by 0.4 per cent, partly reflecting a 2.1 per cent decline in food and non-alcoholic beverages costs and a 2.6 per cent drop in health.
The drop in December was partially offset by a 1.0 per cent rise in communication costs and a 0.9 per cent rise in alcohol and tobacco.
However, pensions are now indexed to the higher of movements in the cost of living, the CPI and 27.7 per cent of average weekly earning of males.
A spokesman for Treasurer Wayne Swan says the government understands it is tough for pensioners and that is why the government put in place the biggest ever increase to the pension and is set to introduce another increase this year.
