15th Oct 2018
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How does Centrelink view gifting for medical expenses?
Author: Janelle Ward
Can Diane gift her sick grandson?

Diane would like to help her sick grandson receive some much-needed treatment but would like to know if gifting the money would affect her Age Pension.

 

Q. Diane
I am a retired pensioner and receive a part Age Pension from Centrelink, along with an allocated pension. I was wondering if I was to withdraw $80,000 from my Allocated Pension to pay for my grandson to have specialist treatment overseas for severe allergies (currently not available in Australia), would that affect my Centrelink Age Pension? As my assets will be reduced, I should receive an increase in my Age Pension. Is that correct and would Centrelink permit this? I really want to help my precious grandson.

A. Any sum of money that you give away would be subject to gifting. Gifting allows you to give away $10,000 each year, up to a maximum of $30,000 in a five-year period. If you gift more than these amounts, it will be considered a deprived asset and you will continue to be assessed on this amount for the five years.

You would, of course, have the value of your assets reduced by $30,000, which should result in you receiving an increase in your Age Pension. but this will not allow you to benefit from the full $80,000 reduction.

Finding it hard to keep up-to-date with retirement rules? The RetirePlanner™ tool has all the information you need.

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    COMMENTS

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    TREBOR
    15th Oct 2018
    10:10am
    Anomalies... unforeseen consequences.... hard and fast rules that don't take into account individual circumstances....

    Of course, if we lived in a truly socialist country as some here wish to label aspects of it.... this would not be a problem. I'm not advocating that, but simply pointing it out...

    Is there an avenue for appeal in advance?
    Anonymous
    15th Oct 2018
    4:30pm
    It is not an individual circumstance of that woman.
    She is choosing to give money to her grandson, and wants the taxpayer to fund her loss of incomne
    I'm not surprised you see nothing wrong in that !!!
    TREBOR
    15th Oct 2018
    4:59pm
    Oh, well then - let the government foot all the medical bills on Medicare... see if I care... not surprised you'd demand a fully socialised healthcare system to fix all the inherent problems of our hybrid system.. particularly the rapacity and tax evasion of shareholders in priavte schemes...

    **theme from Dragnet** DUMB-DA-DUMB-DUMB....

    Easy meat...
    Anonymous
    15th Oct 2018
    5:02pm
    She wants the government to pay for non approved treatment overseas.

    Dumb da dumber
    Rotten meat from too much leaning
    TREBOR
    15th Oct 2018
    5:19pm
    Let the government pay for the health of citizens... they took that over now they must pay the piper...
    TREBOR
    15th Oct 2018
    5:22pm
    Aren't medical costs now part of some 'global economy' and 'global society'? I mean - some (names unmentioned, diablo) think that wages and labour and stuff is all on some global footing - why are not healthcare issues?

    When you demand and enforce by stealth a 'globalised' perspective - you must be prepared to complete your work... can't just take all the good bits and leave the bad....

    Better to collapse the whole thing back down to competing national economies.... worked better before...
    Paddington
    15th Oct 2018
    5:42pm
    oldbaid, a child needing medical treatment not available in Australia evokes this kind of nasty response from you?!
    Regardless of loss of income if this lady can afford to do this, so be it!
    The needs of a child trumps everything!
    Anonymous
    15th Oct 2018
    5:46pm
    Paddington - where was I being nasty ?
    By all means help the child
    But this woman wants the taxpayer to compensate her for it
    Stick to the topic and try not to let misguided emotion cloud your response
    Dave R
    15th Oct 2018
    10:22am
    What if you just paid the bills? Get the treating institution to put your name on the bills and if Centrelink were to question your decreased asset you could show them the bills you had to pay.
    Rae
    15th Oct 2018
    3:15pm
    That won't work Dave. You are not allowed to spend money on other people and get the taxpayer to top you up.
    Cowboy Jim
    15th Oct 2018
    10:58am
    These rules have been in for a long time. A mate quite a while back gave away his house to his son quite legally when he was in his late 50s. They went to a lawyer together sorting everything out. The father is now paying a fixed rental to the son after getting to pension age and gets rental assistance and a full pension and he is also allowed to have $200'000 more in assets as a non home owner. The son has to pay the rates as well as insurances and maintenance, the father knows exactly how much he's got for spending. If you have a family you can trust there always is a way to undermine C/Link, so it seems.
    Old Geezer
    15th Oct 2018
    11:04am
    The pension system is like a sieve with so many loopholes.
    TREBOR
    15th Oct 2018
    1:15pm
    So is the tax system.....
    Anonymous
    15th Oct 2018
    4:32pm
    Cowboy Jim - I find these sorts of rorts absolutely shocking and unacceptable

    This is why our pension system is becoming unaffordable - too many leaners who just want to rob taxpayers
    Cowboy Jim
    15th Oct 2018
    4:39pm
    albaid - they are doing these things in the old country for generations because they still have inheritance taxes, so if you give the stuff away with warm fingers it does not count. We down here have been an egalitarian society for too long and we might not to give all the stuff to the younger generations. The way they behave these days it is understandable.
    TREBOR
    15th Oct 2018
    5:00pm
    Same comment to youngies as Kerry Packer's on tax -

    It's not as if you're doing much of a job with it....
    Rae
    16th Oct 2018
    10:41am
    Giving the house away seems like a good idea to keep greedy aged care operators away from it as well. Why do they get funded by clients when every other business has to go get a proper loan and run the business themselves.

    This lady can gift whatever she likes but must wait 5 years for a aged care top up.

    There is nothing fair or universal about our current welfare system but rules are rules.
    Old Geezer
    15th Oct 2018
    11:03am
    It depends on whether or not the grandson is classified as disabled. If disabled she may be able to set up a trust and the trust pays for his treatment. She needs to consult and expert in this field as I only know of it not the ins and outs of it.
    Rae
    16th Oct 2018
    10:44am
    OG you'd think the parents would get a loan if this treatment works and is needed. Then pay it back. All this relying on parents and grandparents has gone a bit too far.

    Many of the younger generation do not seem willing to grow up and take responsibility for themselves.
    GrayComputing
    15th Oct 2018
    3:22pm
    It is time for the government (and for all of us to rant at them daily) to take action for human decency and a huge stress reduction for pensioners

    NO ASSET TEST FOR A PENSION EVERV AGAIN!
    A pension is not welfare.

    For the retired and retiring people in your electorate do you think they really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules
    Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly,

    As an MP do you really like being part of the system that allows this indirect abuse of the elderly?

    This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

    Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?


    NO ASSET TEST FOR A PENSION EVER AGAIN!

    Now is the time for a daily rant at your PM
    TREBOR
    15th Oct 2018
    5:17pm
    What are your suggestions for those already enjoying massive tax-free retirement incomes from past benefits? Just let them go on or tax them on income?

    Whichever way you approach this - governments respective have stuffed it, and only radical surgery will save the patient.

    First we need to extirpate Canberra ......... excise all malignant tissue in politics and chemically treat the surrounding tissue in the public service, perhaps irradiate them all... provided the patient survives - and this growth is massive - Australia can start again even if below par for a while and rebuild healthy tissue and eventually a healthy body entire.

    Like removing any cancerous societal growth, such as those created by affirmative action, privatisation, globalisation and so forth - the ONLY solution is massive surgery and then a struggle to regain health.

    It's a long hard road ahead to regain some semblance of normal functioning of the body social in the West.
    niemakawa
    15th Oct 2018
    5:28pm
    TREBOR, I have recently read a book by Clive Hamilton -SILENT INVASION- China's Influence in Australia. Maybe in the not too distant fure Australia will align itself with that country. A good read I recommend it.
    TREBOR
    15th Oct 2018
    6:10pm
    I'm developing a book titled 'Austrochine' - about Australia once it becomes a province of China, and is run by a sort of hybrid Australian/Chinese power structure.... a little like that book SS/GB - which was about Britain after the Nazis captured it.
    TREBOR
    15th Oct 2018
    6:35pm
    I'll look for Silent Invasion at the Library - where I'll be tomorrow...
    niemakawa
    15th Oct 2018
    6:54pm
    TREBOR I hope you can find a copy in the Libary. Good luck with your own project.
    niemakawa
    15th Oct 2018
    7:12pm
    TREBOR the book is available at booktopia. Maybe you would like to have a look at their website where there is an introduction to the book given and several reviews.
    Rae
    16th Oct 2018
    10:48am
    What about those who didn't spend all their money on holiday homes, boats, luxury caravans etc but bought income producing assets. Don't they count.

    No asset test will simply encourage more useless accumulation of lifestyle toys won't it?
    niemakawa
    15th Oct 2018
    4:21pm
    Am I reading this correctly. Only $ 50,000 will be comsidered as a deprived asset for 5 years?
    Cowboy Jim
    15th Oct 2018
    4:34pm
    I suppose you are allowed to gift $30'000 over 5 years max so out of the $80'000 needed would leave $50'000. After that 5 years I'd say that another $30'000 could have been gifted, unless they change the rules again. That then would leave $20'000 as a deprived asset.
    An accountant could answer all these questions.
    Anonymous
    15th Oct 2018
    4:38pm
    you are correct Jim.
    She in effect "loses out" on only $1,750 per year for the first 5 years. In the second , that "loss" drops to $700

    So not much at all.
    Cowboy Jim
    15th Oct 2018
    9:11pm
    Thanks for the calculations, olbaid. She will realise it is not an insurmountable
    problem.


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