Gift or income?

Is the money Brian received from his son a gift or income?

Gift or income?
Image credit: Shutterstock

Brian has been giving his son some accounting assistance but doesn’t know whether the money he has received is classed as a gift or income.

 

Q. Brian

I am being paid the full Age Pension and have helped my son out this year with his financial affairs, for which he has given me $2536 in appreciation for this assistance. Would this be viewed as a gift by Centrelink and not declarable or income which should be declared?

 

A. Provided by Department of Human Services

Based on the details supplied, this would be considered a one-off gift received in appreciation for assistance provided to his son and not an hourly rate or wage for provision of services. If this is the case, a one-off gift received by a pension customer is not assessed as income. Brian will however need to advise the Department of Human Services if there has been any change to his assets (for example bank balances) as a result of receiving these funds.





    COMMENTS

    To make a comment, please register or login
    Bes
    17th Jan 2014
    11:26am
    We are going overseas in July for five weeks. Do we have to notify Centrelink and for what reasons?
    Mike
    rowette
    17th Jan 2014
    12:05pm
    Hi there
    Yes you will need to let Centrelink know that you are departing Australia 2 weeks prior to leaving. Centrelink is alerted whenever we leave Australia when we go through immigration on our way out. If you do not let them know they will cancel any payment you receive from them. I am speaking from our experiences as we have left the country 4 times now. We do know of a couple who did not advise them and they had to re-apply for their pensions and also had to pay back money that had been paid into their account before it was a stopped.
    Tom Tank
    17th Jan 2014
    12:10pm
    It will also be a good idea to let them know when you return even although Immigration will advise Centrelink. Always better to be seen to be doing the right thing.
    This also gives Centrelink the opportunity to advise of anything that you should know upon your return
    Disco Diver
    17th Jan 2014
    12:28pm
    I have left Australia about 20 times, you have to inform Centrelink each time you leave and return, if not your pension will be stopped and have to re-apply. They know when you leave by immergration and when you return. I know it takes time to phone them if you can get through or wait hours on the phone.
    moorlands
    17th Jan 2014
    8:58pm
    Same circumstances regulalry, Disco, the phone is a nightmare, there must be a better way?.
    pixii
    17th Jan 2014
    9:58pm
    I tried to advise Centrelink , told I was too early to advise , one week before going , called day before I left , told I was too late , given toll free number to call when I got o destination 2 days time ,! Payment stopped ,! Called to advise I was home , reinstated , paid nearly $1000 , now under review , as operator made error , now I have to pay it back , this happens every time I go on holidays , and always advise , now owe over $4000 to be repaid to them for their errors,
    sidney70
    19th Jan 2014
    12:01pm
    You must notify centre link at least 14 days prior to departing. centre link will tell you whether you should tell them you have returned.
    Liani
    18th Jan 2014
    9:30am
    Wouldn't you think that the government would encourage older Austarlians who have worked all their lives and paid their taxes to continue to earn income which will find it's way back into the economy instead of penalising us for having some initiative. As we age, we want the security of a government pension, but many of us could earn income, but are reluctant to do so, as we have to take it with one hand and give it to the government with the other. I think that all those clever minds could come up with some ways of making it easier for us to continue to make a contribution without jeopardising our pension.
    Denny
    18th Jan 2014
    4:09pm
    We have gone abroad quite a few times and have notified Centrelink before we left and on our return. There is another way to tell them and that is by letter, either sent by post or uploaded on their web site. Last time I tried ringing and got cut off so went into their local office and had to wait ages. Denny
    A. N. Onymous
    18th Jan 2014
    5:23pm
    Following a trip my husband and I made overseas a few years ago, Centrelink apparently was advised by Immigration that only one of us had returned which of course affected our payments. Another Centrelink problem that had to be sorted out.
    rob101
    18th Jan 2014
    5:49pm
    I went overseas in August 2013 and advised Centrelink at the correct time before going.the young man who handled my call assured me there would be no problem with my Pension.There was it was cut off! no reason giving.Luckily I had kept my Receipt Number and date.my Pension was reinstated,but not before a LOT of angst was caused.Never Ever trust Centrelink. robert101
    A. N. Onymous
    18th Jan 2014
    6:33pm
    Sadly, I would have to agree with rob101. Another bad experience we had was in relation to an update of income and assets. My late husband was older than I and retired earlier. As he had an overseas pension and I was still working, he received only a part pension. This meant updating Centrelink every three or four months instead of the annual updates on a full pension. If we had a change in circumstances, I would update Centrelink even more often, i.e. without having received one of their regular questionnaires for update purposes. I always typed our advisory letters and usually handed them in at the local office rather than mailing them.

    On one occasion we had a decrease in assets or income, and I followed my usual procedure. We then received a letter saying his pension had been reduced, but without an explanation. As this did not make sense and, if anything, he should have received an increase, I went to the local office to ask how the amount had been calculated.

    We all make mistakes. Whoever took the figures I had turned in (in a typed letter which had the correct amounts) and put them in the system (i.e., the computer), made a typo and added a zero to the amount in a small bank account my husband had with $1040 in it. Just like that he had $10400 in the account, an increase in assets which activated a decrease in his part pension.

    I told the girl at Centrelink they could put that amount into that account and not have to correct the pension decrease!
    Gra
    18th Jan 2014
    6:46pm
    A simple thing like notifying Centrelink you are going overseas or have just returned should be able to be handled at reception when visiting an office, rather than having to wait ages for something that takes less than a minute to transact.
    shele
    19th Jan 2014
    3:57am
    I have been overseas a few times in recent years. I advised them first time and told I did not have to tell them if only going for short time (Each time I went it was for up to 3 and half weeks) So I have not advised the other times and not heard from them or had pension stopped. So, perhaps this rule applies if going away for a month or more! I hope to get to England & Europe mid year for a few weeks (possibly 6 weeks) so I will be advising them to be on the safe side!
    Pardelope
    19th Jan 2014
    4:54am
    You are dealing with a HUGE department. Things can and do go wrong.

    Play it safe and write a letter. Take it into your nearest office with a copy. Get them to date stamp (the received date) and their signature on the copy (which you will keep on file for future reference).

    If you cannot take a letter into the office, make sure you get a receipt number and keep it on file. If dealing directly with a staff member, get their name, the date, and the time you spoke to them.

    Always advise them of any changes in your circumstances (as advised on all correspondence you receive from them). Non compliance can result in nasty legal or financial costs.
    pixii
    19th Jan 2014
    10:27pm
    In response to Pardelope comment , I do all my reporting correctly , on time , etc , and yes I do now have a debt from each year I have been on holidays , because nearly every time I report or ask/ give information , different operators give different answers or input data incorrectly , and I have to pay the money back , now about $4500 over past 2 years holiday periods ,
    Pardelope
    21st Jan 2014
    4:36am
    This is why you should keep a record of what you advised them - and who you advised it to. If you have proof that you were advised a certain way, you should be able to get the payback waived. It may involve asking for a review of the decision - or even lodging a formal appeal against their decision.


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles