If you are in receipt of a Centrelink pension you should consider the consequences of making a gift. Whilst you can gift or transfer assets for any value you choose your rate of pension or allowance may be affected if you exceed the allowable gifting amount.
Gifting is a term used by Centrelink (also known as ‘deprived assets’) when you or your partner:
- give away assets, including transferring assets for less than market value, and
- do not receive adequate consideration for the gift or transfer in the form of money, goods or services.
The allowable gifting amount is $10,000 each financial year to a total of $30,000 in any five consecutive financial years. This amount applies regardless if you are a single person or couple.
If you gift more than the allowable amount the excess will be assessed as a deprived asset for five years from the date of gift and will be deemed for income test purposes.
Any gifts made before you are entitled to a Centrelink pension or allowance will be assessable if made within the five year period prior to application.
The gifting rules can apply for any of the following:
- money or any other asset you transfer to family members or relatives
- gifts to other people or charities
- gifts to a private trust or company where you or your partner are not the controller of the trust or company
- assets sold for less than market value
- relinquishing control of a private trust or company. If you do this you will be considered to have gifted all the assets held by the trust or company
- transferring your shares in a private company or units in a fixed trust and you do not receive full market value for them
If you are currently receiving the Centrelink Age Pension and want to know if you are getting the maximum rate available to you then please contact our office for your free review.
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