Age Pension gifting rules explained

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

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