PSS and CSS Pension Indexation July 2026: Estimated 2.0% Based on ABS CPI Data
Updated May 2026 · 5 min read
July 2026 — Estimated Rate
2.0% (estimated)
Calculated from the ABS CPI movement between the September 2025 and March 2026 quarters. Applies to CSS, PSS, and MSBS indexed pensions already in payment from the first payday in July 2026. CSC has indicated the adjustment will be processed around 12–13 June 2026. This article will be updated once CSC publishes the confirmed rate.
How the indexation is calculated
CSC (Commonwealth Superannuation Corporation) adjusts indexed pensions twice each year — on the first pension payday in January and July — in line with movements in the All Groups Consumer Price Index (CPI) for the weighted average of eight Australian capital cities, published by the Australian Bureau of Statistics (ABS).
The July increase is based on the change in CPI between the September quarter of the prior year and the March quarter of the current year. The January increase uses the change between the March and September quarters.
The formula is straightforward:
FORMULA
(March 2026 CPI − September 2025 CPI) ÷ September 2025 CPI × 100
= (101.7 − 99.73) ÷ 99.73 × 100 = 1.976% → rounded to 2.0%
The result is rounded to the nearest tenth of a percent. Note that the CPI figures above use the ABS re-baselined series introduced in late 2025.
DFRDB and DFRB recipients
Defence Force Retirement and Death Benefits (DFRDB) and Defence Force Retirement Benefits (DFRB) indexation works differently depending on age:
- Under 55: Receive the same CPI-linked increase — 2.0% in July 2026.
- 55 and over: Receive the greater of the CPI increase, the Pensioner and Beneficiary Living Cost Index (PBLCI), or the increase needed to maintain 27.7% of Male Total Average Weekly Earnings (MTAWE). For July 2026, this means recipients aged 55 and over will receive at least 2.4% in July 2026 based on preliminary PBLCI/MTAWE calculations — exceeding the 2.0% CPI rate.
Pro rata adjustments for new pensioners
If your pension commenced less than six months before the adjustment date, you'll receive a pro rata increase rather than the full percentage. The pro rata fraction is based on the number of complete months your pension has been in payment before the adjustment date.
For example, if your pension started in April 2026, you would have been in payment for approximately two months before the July 2026 adjustment date — so you'd receive approximately 2/6 of the 2.0% increase, or around 0.7% — subject to CSC's scheme-specific calculation rules.
Historical CSS, PSS and MSBS indexation rates
Indexation rates have varied significantly over the past few years, reflecting movements in underlying CPI. The high inflation period of 2022–2023 produced some of the largest increases in recent memory.
| Adjustment date | CPI increase |
|---|---|
| July 2026 ← current | 2.0% |
| January 2026 | 2.1% |
| July 2025 | 1.2% |
| January 2025 | 1.2% |
| July 2024 | 1.6% |
| January 2024 | 2.0% |
| July 2023 | 3.3% |
| January 2023 | 3.6% |
| July 2022 | 3.5% |
| January 2022 | 1.5% |
| July 2021 | 1.1% |
| January 2021 | 0.0% |
| July 2020 | 1.0% |
| January 2020 | 1.1% |
Source: ABS CPI data (Cat. 6401.0). Rates are for CSS, PSS and MSBS indexed pensions.
What this means for your retirement plan
A 2.0% pension increase is meaningful for long-term planning. On a $60,000 annual PSS pension, the July 2026 adjustment adds $1,200 per year to your income — compounding from there as future indexation builds on the higher base.
One important planning consideration: over long periods, CPI-linked pensions have historically tended to grow more slowly than wage-linked benchmarks — though there are periods where CPI temporarily exceeds wages growth. The Age Pension, by contrast, is indexed to the higher of CPI or the Male Total Average Weekly Earnings benchmark, meaning the gap between CSS/PSS pensions and wage-linked incomes has tended to widen over long retirements. This is a risk worth modelling explicitly if you expect to rely heavily on your defined benefit pension.
Model your PSS or CSS pension in the RetireConfident calculator
RetireConfident supports defined benefit pensions including PSS, CSS, and MSBS — including CPI indexation, reversionary pensions, and the defined benefit income cap. Enter your annual pension after tax and the calculator handles the rest.
Frequently asked questions
How much will PSS and CSS pensions increase in July 2026?+
Based on the ABS CPI movement between the September 2025 and March 2026 quarters, PSS, CSS and MSBS indexed pensions are estimated to increase by 2.0% from the first pension payday in July 2026. CSC has indicated the adjustment will be processed around 12–13 June 2026.
How is PSS pension indexation calculated?+
The increase is calculated as: (Current quarter CPI − Previous quarter CPI) ÷ Previous quarter CPI × 100, rounded to the nearest 0.1%. For July 2026: (101.7 − 99.73) ÷ 99.73 × 100 = 2.0%.
When are PSS and CSS pensions adjusted?+
Pensions are adjusted twice a year: on the first payday in January (based on the September quarter CPI) and the first payday in July (based on the March quarter CPI). If your pension started less than six months before the adjustment date, a pro rata increase applies.
Do DFRDB and DFRB pensions get the same increase?+
DFRDB and DFRB recipients under 55 receive the same CPI-linked increase (2.0% in July 2026). Recipients aged 55 and over receive the greater of the CPI increase, the Pensioner and Beneficiary Living Cost Index (PBLCI) change, or the increase needed to maintain 27.7% of Male Total Average Weekly Earnings (MTAWE). For July 2026, preliminary PBLCI/MTAWE calculations suggest a rate of at least 2.4%, exceeding the 2.0% CPI rate.