Centrelink Q&A: Do you have to declare an inheritance?

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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.

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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14 Comments

Total Comments: 14
  1. 0
    0

    How selfish and greedy is this person?
    She receives a large inheritance and she still wants her husband on the dole !
    What a louse !

    • 0
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      It is possible that the husband would really like to get a job back and the dole money could be secondary. I was unemployed, not on the dole as my wife had a job. But at the time I was constantly overlooked as the other candidates had a little paper from CES (as it was called at that time) promising the prospective employer half the cost of the blokes wages for 6 months. So a bloke on the dole was always ahead. If it is the dole money the bloke is after I totally agree with you, H S

    • 0
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      H S charming reply ,you certainly have a way with words .How easy it is to make vicious comments and pass judgement on people you probably don’t know or know of their circumstances.Very sad .

    • 0
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      Suck it up tj, that would be my first reaction too. The bloke is 59 in 6 years he will be eligible for the pension; its highly unlikely he will get a job in the interim if as cowboy suggest he needs the little bit of paper from Centrelink but as they’ve now received a LARGE inheritance surely that should tide them over.

    • 0
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      I’d be delighted to trundle into CentreLink if it meant that someone had given me a large inheritance.

    • 0
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      What is very sad, TJ, people with selfish and greedy mentalities that they can bludge on Centrelink handouts while being wealthy as a result of a large inheritance, as in this case.

  2. 0
    0

    Kate,
    You need to speak to a lawyer who specialises in family trusts. It may be too late as your benefactor should have had the foresight to leave the money in a testamentary trust.

    • 0
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      I’ve been through this and testamentary trusts are assessable by Centrelink. So if you are a trustee or a beneficiary it doesn’t matter, it will be assessed as an asset.

  3. 0
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    and why shouldn’t she declare it? Is it need or greed?
    I realise this is most likely a “pretend” situation to show an example of what should or should not be done, but really! Honesty and a clear conscience will hurt no one.

  4. 0
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    Hi, You should talk to a Financial Planner, as you may be able to invest the money in Super and then it may not be an asset or deemed for income in Centrelinks eyes, until you wish to access it in the future.

  5. 0
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    Money placed in Superannuation whilst you are under Age Pension age is not assessed, provided it is not paying you an Income Stream.

  6. 0
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    What a confused article – Kate is asking about effect on Newstart, and the article & Leon’s response seems to be about Age Pension tests! Please relate the answer to the question correctly!

    • 0
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      Leon and his article are spot on except for the unfortunate byline which mentions the Age Pension, but the answer is still correct.Especially since the questioner is very light on any helpful detail.


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