As a general rule, how is an inheritance assessed by Centrelink?
Bob is about to receive an inheritance but as he receives an Age Pension, he’s unsure how it may be affected. So, as a general rule, how is an inheritance assessed by Centrelink?
I would like some information regarding receiving an inheritance when getting a Centrelink Age Pension. Could you give me some information about this matter?
A. You will need to advise Centrelink of your inheritance and you should do so within 14 days of its receipt. Some lump sums are excluded from the income test, such as one-off payments that are unlikely to be repeated. Exempt items include:
- a one-time gift
- an inheritance
- an irregular superannuation amount, such as commutation of a superannuation pension
- compensation and insurance payouts
- the value of emergency relief
- certain redress payments – for example, historical negligence
- a prize, reward or lottery win
- single or occasional gambling wins
- a compensation payment you receive from an Australian trust.
However, what you do with your lump sum may affect your pension under the asset and income test. If you invest the money, it will be deemed to earn interest, which will be assessed under the income test. If you use the money to purchase an asset, such as a car, then this asset will be assessed under the asset test.
You can find out more by visiting HumanServices.gov.au, or by calling 13 23 00.
You may also wish to consult an independent financial advisor on how best to structure your finances and make the most of your lump sum.
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