In determining whether you are eligible for the Aged Pension in Australia, Centrelink has a two part test you must satisfy. The first part of the test is the “asset test” which puts a cap on what assets you can own before you lose your eligibility for the pension, and the second part of the test is the “income test” which dictates the amount of money you can earn before you will lose you eligibility for a full or part pension.
In addition to the above tests, Centrelink has very strict limits on how much of your assets you can ‘gift’ before your pension will be affected (the ‘gifting rules’). You can give away assets of $10,000 in a financial year, with a limit of $30,000 over a 5 year period.
Transactions that may be considered gifts include:
- Sale of property to family members for below market value.
- Buying a child a car.
- Transferring money to a Trust or Company.
- Transferring Control of a Trust or Company.
- If you forgive a loan.
- If you pay off someone else’s loan.
- If you donate money; or
- If you intentionally deprive your income.
The best thing to do is get advice before you make the gift. Unfortunately once you have made the gift you are at risk of the gifting rules applying and you losing part or all of the pension.
For more information visit Services NSW website and/or make an appointment with Centrelink.
This article was published on 2/9/24 and the information is valid only to the date of publishing. This article should be considered merely general and non-specific on the subject matter and is not and should not be considered or relied on as legal, advice. Meehans Solicitors is not responsible in the event this information is relied upon by the reader in the absence of specific legal advice.
