Should you declare an inheritance?

Kate is worried that, if she tells Centrelink about the inheritance she’s recently received, her husband will lose his Age Pension.

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Q. Kate
I have just received a large inheritance and I am afraid if I report it to Centrelink that my husband’s Newstart payment will stop. 

I am 61 and my husband is 59 and everything bought with my money will be in my name only. Should I tell Centrelink? Will it affect my husband’s Newstart payment?

A. Firstly, it’s not really a case of whether you should tell Centrelink about your inheritance, you’re actually legally required to do so within 14 days of receiving the money.

While the inheritance itself will not be considered income – it’s a one-off payment unlikely to happen again – what you do with it may fall under the income and assets test.

Regardless of whether the money is in your name only, your husband is assessed as part of a couple and, therefore, any income and assets that you both have will be counted.

If you use the money to purchase an asset, such as a car, holiday home, valuable artwork, etc, then this asset will be assessed.

The money will also be considered a financial asset and therefore deemed to earn a nominal rate of interest. This will then be assessed under the income test.

All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

If you have a Centrelink question, please send it to [email protected] and we’ll do our best to answer it for you.

Related articles:
New inheritance laws
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Written by Leon Della Bosca

Leon Della Bosca has worked in publishing and media in one form or another for around 25 years. He's a voracious reader, word spinner and art, writing, design, painting, drawing, travel and photography enthusiast. You'll often find him roaming through galleries or exploring the streets of his beloved Melbourne and surrounding suburbs, sketchpad or notebook in hand, smiling.
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