Gifting rules: when do they apply?

If you don't receive an Age Pension, can you gift as much money as you choose?

Mans hand holding Australian money in white envelope

Mal’s mother would like to gift her sons a substantial amount of money. Although she doesn't receive an Age Pension, is she free to give away as much as she wants?

Q. Mal

My mother sold her house after my father passed and elected to live with me and my wife. My wife is her carer.

My mother invested her funds, with her three sons as beneficiaries and, as this is a substantial amount, she no longer receives any Age Pension.

As she now has no links to Centrelink, she wishes to give some of her money to her three sons. She gifted $10,000 late last year to us – $3300 each.

Can she give us more now, say $50,000 split amongst us, without being penalised by any authority?

A. As your mother does not receive an Age Pension, then she can essentially gift as much as she likes. However, should her circumstances change and she is in a position to again apply for an Age Pension, the amount gifted will be subject to the gifting rules.

Also, if your mother should have to enter aged care and is looking to have her place funded by the Government, she will be subject to an income and asset test, and any money gifted in the five years prior to her assessment will be considered as part of the gifting rules.

You may also wish to have your mother’s accountant or financial advisor review her finances and provide relevant taxation and investment advice.

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    COMMENTS

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    Mojobomber
    27th Feb 2017
    10:50am
    If only one person of a couple receives Centrelink payments, can the other one who doesn't receive Centrelink payments, gift money without affecting their spouses pension?
    OLD TAX PAYER
    27th Feb 2017
    12:33pm
    The house my wife and I live in is jointly owned by my wife and our two children (25% each ).If we were to buy out their share and have the house only in our names,can this be classed by centrelink or DEMMED as they like to put it as a gift payment.
    johnp
    27th Feb 2017
    1:05pm
    My goodness some pitfalls for the unwary. If not careful with gifting; Centrelink later on could deny any pension thus meaning you could starve to death !!
    OllieB
    27th Feb 2017
    3:03pm
    Regarding gifting rules and the above post regarding Mal's mother. Can you tell me if one does not receive an aged pension due to the threshold of assets and income tests, BUT receives a Pensioner Health Card, are you still in the category of being able to gift as much as you like to someone? Does receiving a Card restrict you from gifting as much as you like?
    Sundays
    27th Feb 2017
    4:02pm
    These are very good questions. I would ask Centrelink before gifting as you wouldn't want to make a mistake.
    francobee
    1st Jun 2018
    5:50pm
    I wonder when a Government will address the ongoing costs of energy to we pensioners, this mob dole out a dribble here and there thinking we will be so grateful they will get our vote. Long term solutions are what is required, not a sop here and there, we need to budget too !!!


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