Age Pension gifting rules explained

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If you give away your income or assets, they may still count towards your means test.

If you sell or transfer an income or asset and you get less than its value or nothing in return, that is considered a gift.

It is not considered a gift if you sell or transfer an income or asset and you get money, goods or services equal to the same value.

Services Australia provides a short video explaining when transferring an income or asset is considered a gift:

If you or your partner gift money, income or assets, Services Australia may assess it in your income and assets tests. Gifts are assessed to see how they reduce your assets and whether they go over the allowable amount for gifting.

Any gifts you made in the past five years may count in your income and assets tests.

How much can you gift?
You are allowed to gift up to $10,000 in one financial year or up to $30,000 over five financial years, but this cannot include more than $10,000 in a single financial year.

If your gift over this amount, Services Australia will count the excess in your assets test and also apply deeming and include it in your income test.

If you sell a house
Services Australia may include a gifted amount in your income and assets tests. For example, you own a property worth $380,000. But you sell it to your child for $200,000.

Services Australia would assess the $170,000 difference as a gift. The allowable gift of $10,000 in a financial year would not be included.

In some cases, Services Australia won’t include it in your income and assets tests. For example, you own a house valued at $380,000. You sell it for $350,000 on the open market. This is because it was the best offer to date. You didn’t think it was a good idea to wait for a higher offer.

Other transactions that could be considered gifts include:

  • buying or transferring a car
  • transferring money into a trust or company
  • giving up control of a trust or company
  • forgiving a loan
  • paying off someone else’s loan
  • donating money.

Are you aware of the rules around gifting?

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Written by Ben


Total Comments: 12
  1. 0

    Provide a universal pension & tax upon income i.e. abollish means & asset testing. Life would be much easier for all eh?

  2. 0

    If I gift my car to one of my children how is the value determined? Also my car is registered as a pensioner how does this affect my child when they get the car.

  3. 0

    Isn’t this ridiculous if you gift money or property while you are alive you face penalties. But after you die all of your assets are gifted to your remaining family without any penalties?
    Another reason to ring back inheritance tax. After all your children could use the money while they are starting off in life rather than later. I wonder if any research has been done to assess the impact on the economy if this were the case/

    • 0

      The main difference is that after you die, you no longer collect a publicly funded Pension.

    • 0

      You don’t face a penalty at all, you get less pension.

      You can gift as much as you like to your children now but that amount will still be assumed to be in your name as an asset and you pension will be calculated on those assets for five years. After five years you would have the pension calculated on the actual amount of assets you have on hand at that time, ie the gifted amount no longer is calculated in your pension amount.

    • 0

      Sorry 4b2 for hi jacking your thread but i’m hoping I can get through to Greg from here.
      After reading the comment left by Greg its got me thinking.
      is this a true factual piece of information or just a general comment ?
      is there some where this is written that i can read about.
      im in a similar boat and i am trying to gather information about it.
      is there an institution or profession that gives advice on Centrelink age pension matters?
      Thank you in advance

  4. 0

    Vote with your feet and today use your fingers to tell the PM and your your LP or national MP office that if they condone or continue CentreLinks disgraceful intrusive methods they are out on their ear come the next election.
    Also contact any incumbent ALP or independent with the same message.

  5. 0

    If your money is in super and you die who ever draws it out will be taxed but if you can draw it out then put it back they wont be taxed when you die

  6. 0

    Windfalls are treated differently than normal income by ATO. Is this true also of Services Australia?
    For example what happens if I have a family Tatts syndicate and I win $100,000. I run the syndicate so the cheque (or other payment) is sent to me. I then send each of my family members their share. Is this gifting? How does Services Australia treat this?



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