The federal government has blocked a coalition move to raise some pensions by $30 a week, despite documents showing it considered the same option during budget deliberations.
The federal opposition's attempt to introduce legislation to raise the rate of some pensions failed on Tuesday after Labor used its numbers in the lower house to kill the bill on constitutional grounds.
But documents obtained by Seven News under freedom of information laws show federal cabinet considered raising the pension by $30 a week during its budget deliberations.
The documents show Treasury costed several options to help pensioners ahead of the budget, which also included providing one-off payments of $1,000 to provide assistance while pensions were reviewed.
The cabinet documents also show Treasury warned that if the aged pension was lifted, payments to disability pensioners and carers should also be increased.
Labor has since said it wants to wait for the outcome of a tax review - due to report next February - before moving to lift pension rates, while accusing the opposition of playing politics on the issue.
The Opposition's bill to increase the single aged, single service age and Widow B pensions by $30 a week passed the Senate on Monday night, and was sent to the lower house on Tuesday afternoon where the government used its numbers to bury it.
However, before that, the coalition ramped up the pressure on government, with Opposition Leader Malcolm Turnbull moving a motion to have the bill immediately debated in the House of Representatives.
"We have seen the plight of pensioners trivialised and mocked by this government today," Mr Turnbull told a rowdy chamber.
"We've seen it described, this move to give single aged pensioners $30-a-week, we've seen it described by the veterans minister as a stunt.
"We've seen it described by the treasurer as a ploy and we've seen it described by the acting prime minister ... as low-rent politics.
"They (the government) are asking Australian pensioners to accept a payment, a pension that they say in their arrogance, they cannot live on but they will do nothing about."
Families and Community Services Minister Jenny Macklin said Mr Turnbull had only moved for the debate because he knew the bill was unconstitutional. The Senate is not able to originate laws appropriating revenue or monies.
"He (Mr Turnbull) doesn't understand the constitution and he sure as heck does not understand pensions policy," she said.
Ms Macklin said the opposition had the opportunity to raise the pension while it was in government but when the idea was put to cabinet last year, it did nothing.
"All they want to do is play politics with pensions, play low rent politics," she said.
Treasurer Wayne Swan said the opposition had shown it was out of touch with the needs of Australians.
"It is not just that they left out two million pensioners - it just demonstrates that they do not understand the financial pressures around the kitchen table."
He said the opposition did not understand the need for a long-term sustainable solution to the pension problem because they did not understand the everyday lives of Australian families.
The government said it was well on the way to completing a comprehensive investigation into how to improve the structure and adequacy of the pension system, and would act quickly to improve the pension system once the review was complete.
Australian Greens leader Bob Brown said the only people the government was hurting with its actions, were pensioners.
"It's patently obvious - and will be patently obvious to more than 20 million Australians - that it's simply using a false constitutional argument to avoid a very legitimate debate about social fairness - about a fair go for pensioners," Senator Brown told reporters.