Centrelink Q&A: Will a gift affect my pension?

If I gift my three grandchildren, will my Age Pension be affected?

Will a gift affect my pension?

May is thinking of gifting $10,000 each to her son and her three grandchildren. But she’s unsure if that means her Age Pension will be affected. We asked the Department of Human Services General Manager, Hank Jongen, for his advice.

 

Q.  May
What are the rules on gifting to family members? Would I be able to I gift $10,000 to my son and the same to my three grandchildren? Will my Age Pension be affected?

A.  The value of assets a person gives away or sells for less than what they’re worth may still count towards the assets and income test for their Centrelink payments. The most a person can gift without affecting their payment is $10,000 in one financial year, and up to a maximum of $30,000 over five financial years. This applies to singles and couples combined.

If you wish to gift $10,000 to your son and $10,000 to each of your three grandchildren, then you would be exceeding the $10,000 limit in that financial year. The $30,000 gifted to your grandchildren would be assessed as a financial asset for a period of five years from the date of the gift. This means it will be counted under the assets test, and subject to deeming under the income test.

You will still have access to the allowable gifting of $10,000 per financial year in any two of the following four years, to remain under the $30,000 five-year limit. But any gifting made in the five years prior to receiving the Age Pension may also count in your assets and income tests.

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 newsletters@yourlifechoices.com.au and we’ll do our best to answer it for you.

RELATED ARTICLES





    COMMENTS

    To make a comment, please register or login
    marhold
    9th Apr 2018
    10:33am
    Are you able to regift another $30000 after the first five year period?
    Nerk
    9th Apr 2018
    12:02pm
    and pay yourself and wife 1,000 per week each (b
    asic wage)
    leek
    9th Apr 2018
    2:14pm
    Yes. it starts again.
    Old Geezer
    9th Apr 2018
    10:55am
    Leave no trace and how would they know?
    Cowboy Jim
    9th Apr 2018
    1:42pm
    Give to your children 5 years before pension age and you can give the lot almost. If you trust your children there are many ways and that's where the higher classes have an advantage.
    Old Geezer
    9th Apr 2018
    3:08pm
    Just take out twice as much as you need every week in cash and give half away. It will soon add up. $500 extra a week is $26,000 a year.
    Cowboy Jim
    9th Apr 2018
    4:36pm
    Thanks Old Geezer - most of us cannot take another $500 a week out as it is not in there in the first place. Maybe another $100 p.f. might be possible but I most probably would spend it on a night out.
    Nan Norma
    9th Apr 2018
    11:22am
    $10,000 in one financial year. So could give $10,000 in June and $10,000 in July. No more than a total of $30,000 within five years.
    Nerk
    9th Apr 2018
    12:00pm
    Gift 30.000 to the under the mattress account.
    Cowboy Jim
    9th Apr 2018
    2:04pm
    The first place any intruder would look!
    GrayComputing
    9th Apr 2018
    12:57pm
    Dear PM MPs and senators

    It is time for the government (and for all of us) 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?

    As a MP you even stand to lose your chance at being part of the government unless all these criminal asset tests for a pension are dropped now.

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    Misty
    9th Apr 2018
    3:12pm
    What are you going on about GC?, I have never had a call from Centrelink and the waiting time in our local office is rarely more then 30 minutes, more like 15. I cannot see why anyone would object to an asset test, why would they?.
    Cowboy Jim
    9th Apr 2018
    4:30pm
    Well Misty, I would not object to an assets test either if it applied to the upper level like politicians as well. And GC is right, a pension was never meant to be welfare. When I started work 57 years ago it was called the Old Age Pension and the 60+ aged people in my company looked forward to it.
    Rae
    11th Apr 2018
    10:21am
    I object because it unfairly treats those who save and buy assessable items over those who just spend. We all paid tax but spenders are being unjustly favoured over savers.
    tams
    9th Apr 2018
    1:01pm
    There are two elements to this question - how will gifting affect my pension on the asset side, and how will it affect on the income side
    On the income side, the amount gifted is deemed. You can actually gift many thousands more without affecting your pension.
    The amount gifted is also counted as an asset. Depending upon your other assets, amounts over $10,000 may still have no effect.

    When considering a gift, you can contact Centrelink and do some scenarios based upon your other information. Pensioners will be surprised how much can be gifted without affecting the pension.
    Misty
    9th Apr 2018
    3:37pm
    Pensioners should research very carefully what they can and cannot gift and how it could affect their pensions.
    Old Geezer
    9th Apr 2018
    5:48pm
    Misty as long as you spend it on yourself you can take out as much as you like. Grand kid has just moved into their first house so it's time to refurnish our house again.

    You have to be a bit creative with this one.
    Nan Norma
    9th Apr 2018
    7:14pm
    Old Geezer is right, and I was told that by a C.link financial adviser.
    Fluffy Duck
    21st May 2018
    5:32pm
    If you receive a full pension and have assets under the assessable amount, surely it's none of Centrelink's business if you gift money? If you're a single homeowner pensioner with, say, $200,000 in the bank (or a super account, or wherever), why do you have to tell centrelink if you want to give $50,000 away? It doesn't affect your pension. You're not going to get any more. I can understand concerns about people giving money away (or hiding it in someone else's bank account, which I assume is why the rule exists) in order to qualify for a pension, but if you already qualify and think you can manage with a little less in savings I don't understand why it would need to be reported.


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles