Age pensioners are about to receive their biggest pension boost in seven years.

Millions of older Australians will see their fortnightly payments increase from 20 September, with Age Pension rates set to increase by 1.6 per cent.

The maximum single Age Pension rate will be $967.50 a fortnight – an increase of $14.80 – and couples will receive an extra $22.40 combined, with maximum fortnightly payments totalling $1458.60.

That takes the annual pension paid to singles to $25,155 and to couples $37,923.

“We are ensuring pensioners maintain their purchasing power in the economy, which is bouncing back strongly,” Social Services Minister Anne Ruston told The Australian.

“This change puts money in the pockets of all Australians who rely on our social security system and, in particular, older Australians.

“Since March 2013, the rate for single pensioners has increased by $159.10 a fortnight, while the rate for pensioner couples combined has increased by $239.80 a fortnight.”

Other welfare recipients will also benefit, as JobSeeker and other allowances will increase by up to $11.90 a fortnight. Rent assistance is also set to rise by between $1.80 and $2 per fortnight depending on the recipient’s situation.

Social security payments are adjusted twice a year. The 20 September boost will be the biggest increase since 2014 – a far cry from last September when there was no Age Pension increase for the first time in 23 years.

Around 2.58 million age pensioners are among almost 5.3 million people who will benefit from increased payments.