Amanda’s parents are considering a granny flat arrangement with her sibling, but are unsure how this, and gifting her an inheritance advancement, will affect their pensions.
My parents are both 90 years old and still live in their own home with some assistance. My father is on a full Veterans Affairs’ Gold Card pension and my mother is on the Age Pension. She also has Alzheimer’s Disease and it is becoming a burden for my father to care for her. He does not want to put her in a home and has wondered if it would be possible for him to sell his home and move in with my sister. Some of the sale value of his home would go towards buying a larger home, and my sister would also sell her home to contribute.
Would this affect their pensions? And would they be able to gift myself half of the value of their property as an advancement on my inheritance?
A. It’s a difficult time when your parents can no longer live on their own. Moving in with a family member can help to ease the burden as you mentioned. There are rules surrounding such an arrangement called granny flat rules. How such rules affect your parents’ pensions will depend on the type of agreement which is put in place. Therefore it is incredibly important that your parents and your sister seek independent financial and legal advice. As a general guide, you may find the article, Granny flat arrangements, useful.
In regards to gifting money to you as an advancement of any inheritance, this will be assessed under Centrelink’s gifting rules, which allow the gifting of $10,000 in a year, or $30,000 in a five-year period. Anything above this amount will be classed as a deprived asset and will be assessed for pension eligibility.