13th Jan 2014

Is an insurance payout an asset?

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Debbie McTaggart

Paul's mother has just received an insurance payout and is unsure whether it will affect her Age Pension.

Q. Paul

My dad had a life insurance policy and when he passed away, Mum received $23,000. She is on an Age Pension and I would like to know if the payout is considered as an assessable asset?

A. Provided by Department of Human Services
The amount received is not income. However, Centrelink may assess the amount under the income and assets tests depending on what your mother does with the amounts received. e.g. if the amounts are placed into a bank account, then deeming will apply to the value of the bank account. You have 14 days to advise Centrelink of what your mother has done with the funds.





COMMENTS

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Johnny
20th Jan 2014
11:05am
PENNY PINCHING OFF PEOPLE WHO HAVE NOTHING, SHAME ON THE GOVT
Thinker
20th Jan 2014
11:36am
Without being an expert, it seems to me that before death the surrender value of the policy would have been an asset with a deemed income. I hope they had put it in their assets declaration and updated the surrender value.
In response to Johnny it is not penny pinching, it ensuring that limited resouces are distributed to those with greatest need.
Nightshade
21st Jan 2014
7:59am
Limited resources are the operative words here -
While the political arena federal / state / local throw the money away by the billions like it is used toilet paper.
BRAVO !
Nightshade
21st Jan 2014
8:16am
Oprah Winfrey announced on her show that SHE would be flying her ENTIRE audience - 300 people - on an ALL EXPENSES PAID trip to Australia -
The trip cost the Australian Tax payer $2.3 million - that is $2.300.000 in real Australian dollar terms.
$1.000.000 in accommodation.
Each audience member received a FREE Motorola Smartphone.
"the Australian tax payer would be HAPPY to pay"
dailymail.co.uk
tiger
20th Jan 2014
11:48am
I had a $44,000 compensation payout against a large Supermarket and ended up with about $30,000.The insurance company paid up no questions asked.It made no difference to my age pension,into a suitable bank bearing interest account,where it has been untouched for nearly 2 years now.The monthly interest is very good.As long as you inform Centrelink there's no problem.
FrankC
20th Jan 2014
12:57pm
Don't forget Tiger, move some money from it or into it, or the government will take it off you if you haven't touched it for 2 years!
Jill
20th Jan 2014
12:24pm
Can you just spend this money on something like a cruise and a car and so on without penalty
tiger
20th Jan 2014
12:43pm
Tiger here, of course. I decided to put mine away in an interest bearing account.it's your money do what you like with it. I did have a week in Darwin and came back on the Ghan to Adelaide.
Gra
20th Jan 2014
2:44pm
Unless you are very close to the threshold in the asset test, there would be no penalty if you placed the money in the bank.
You could spend the money or part thereof on a cruise but any remaining money would be included in your assets, just as a car you bought would be included in your assets.
Aurora60
20th Jan 2014
1:35pm
doe this apply to Newstart too?
Gra
20th Jan 2014
2:36pm
That question is best asked at a Centrelink office of a Centrelink officer.
Gra
20th Jan 2014
2:41pm
Of course the amount received is going to be classed as an asset. While it is not classed as income the amount received has certainly added to the value of Paul's mum's assets. The best way to deal with any money received like that, whether it be an insurance payout or inheritance is to notify Centrelink that you have received the money and tell them what you intend to do with it. The only way it won't be included in your assets is if it is spent on a holiday.
MONICA
20th Jan 2014
3:12pm
I am on a disability pension, I was in a car accident 15 m onths ago no the reason why Im on a pension.

The first $75,000 is not assessed as income but anything above $75,000 is included as income ive been told by Centrelink, if its invested and you get interest you still have to fill in a tax form and pay tax on it as Ive been told so pay off all your debts take a holiday don't give any to family as they will have their hands out so will friends so keep money to yourself then invest wats left!!!!
doggone
20th Jan 2014
4:33pm
whatever you do in lfe you can safely be tthe government is peering over your shoulder.
Nightshade
21st Jan 2014
9:23am
Recently, it was said on TV that the elderly were living in just one room of their house because they could not afford the power bills -
The response was that the elderly were HOGGING BIG HOUSES when they should sell & move to smaller accommodation -
Is this implying that if you live in your family home - let us say a modest 3 bedroom house & you can only afford to heat & light one room in that house at an given time because power bills have risen - YOU ARE GREEDY ?
I use tea candels in the house to see to get around.
I don't watch TV any more.
I only heat & cool when absolutely necessary.
I only buy when things are on special or are absolutely necessary.
I use the car only to get me to appointments & shopping.
I cannot walk very far & I cannot use public transport.
BUT hey - I am still looking for a work - & indeed I would love a job though I am incapacitated - though my incapacity is not acknowledged / accepted .
I am a greedy, bludging un-Australian.


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