Pensions are set to jump by as much as $35 per week after Treasurer Wayne Swan broke with tradition Monday and confirmed there would be an increase in the May Budget.
Until now the government's position has been to offer no guarantees.
"I am not in the business of handing out guarantees about anything," the Finance Minister Lindsay Tanner said recently, "there are a lot of other things that are also on the table."
But the Treasurer told ABC radio that pensioners were the only group guaranteed to get assistance in the Budget, saying he could make no other commitments.
"We have made a commitment when it comes to pensions, but as I have said there will be hard choices to be made. I'm not going to get into the business of ruling anything in, or ruling anything out," he said.
Mr Swan has had the report of the Harmer Pensions Review since the start of the month...
It is understood not recommend any particular increase but to canvass options.
He will shortly receive the retirement incomes part of the Henry Tax Review to allow him to consider pensions and the tax treatment of superannuation together in the Budget context.
The Prime Minister fed speculation that the increase would amount to $35 per week for a single pensioner and $51 per week for a couple when he used those terms to describe the $1,400 and $2,100 "down payments" delivered as part of the economic stimulus package in December.
The Combined Pensioners and Superannuants Association welcomed the commitment to action in the Budget but said the increases would have little effect if they were delivered across the board.
"Pensioners in public housing would lose 25 per cent in rent adjustments," said CPSA policy coordinator Charmaine Crowe.
"And part-pensioners with independent income getting perhaps just $2 a week would get the lot."
The Association asked the Harmer Review to pay the increase as a means-tested supplement which would not be taken into account in adjusting rents.
Because of a confidentiality agreement it signed with the Harmer Review in order to conduct discussions it is unable to disclose the Review's response.
But Ms Crowe says much more is needed for single people who's only income is the pension - around $70 per week according to modeling conduced by Westpac and the Association of Superannuation Funds.
Mr Swan said he faced "really hard choices" in framing the budget.
His challenge was to "continue to stimulate the economy and continue to invest in the future while working under the constraints imposed by collapsing revenue and the global recession".
While economic management was seldom easy, the last decade had been "an exception".
Much as he would have preferred to have spent his time simply ticking off items on his 'to do' list, he had to make the most of the cards he had been dealt.
He agreed with the Prime Minister that it would be "virtually impossible" for Australia to avoid a recession.
He was not able to say that things "would not get tougher".
Opposition arguments about deficits and government debt were "lazy and predictable" in the sharpest synchronised downturn in living memory.