Gifting - How will it affect my Age Pension?

Kind hearted YOURLifeChoices subscriber, John, would like to help his son and his wife purchase their own home but is not sure how gifting money will affect his pension. Q. John I have a little problem that I need some help with, and I think you might be just the ones to give me advice. It is a question that many parents my age, in their seventies, must have. I live on the Single Age Pension, my wife passed away three years ago. I am in the middle of selling a block of land I own for $160,000. When it is sold I would like to give my son and his wife around $20,000 to enable them to put a deposit on a house and pay it off with a mortgage, so they own their own home, instead of paying $350 every week on rent as they are doing now. If I give away this money what effect will this have on my pension? I should imagine that Centrelink would take a dim view of some one giving money away when they are getting pension ...

Kind hearted YOURLifeChoices subscriber, John, would like to help his son and his wife purchase their own home but is not sure how gifting money will affect his pension.

Q. John
I have a little problem that I need some help with, and I think you might be just the ones to give me advice. It is a question that many parents my age, in their seventies, must have. I live on the Single Age Pension, my wife passed away three years ago.

I am in the middle of selling a block of land I own for $160,000. When it is sold I would like to give my son and his wife around $20,000 to enable them to put a deposit on a house and pay it off with a mortgage, so they own their own home, instead of paying $350 every week on rent as they are doing now.

If I give away this money what effect will this have on my pension? I should imagine that Centrelink would take a dim view of some one giving money away when they are getting pension payments.

Do you think my pension will be reduced, or even taken away? I don't want to loose my pension and might have to give the idea of help with a deposit away if that is the case. Your advice on how it would work would be very much appreciated please.

A. There is a limit to the amount of money you can gift within a financial year. This is currently $10,000 in a financial year but no more than $30,000 in a five year period, so you could give them $10,000 this financial year and $10,000 next financial year without any penalties.

Essentially, even if you were to give away all of the proceeds from your block of land, you would still be deemed on $150,000, which may take you over the pension limit threshold depending on your financial circumstances and other assets which you hold.

For more information on gifting, visit www.humanservices.gov.au





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