Gary

Centrelink call the amount you can gift each year your allowable disposal amount.

This is the most you can give without affecting your payments from Centrelink

 It’s also called a gifting free area.

The allowable disposal amount is the same if you’re a single person or a couple.

It’s either:

$10,000 in 1 financial year

$30,000 over 5 financial years – this can’t include more than $10,000 in a single financial year.

You will find more info

https://www.yourlifechoices.com.au/age-pension/faq/how-much-money-in-the-bank

https://www.servicesaustralia.gov.au/individuals/topics/gifting/27276

https://www.servicesaustralia.gov.au/individuals/topics/how-much-you-can-gift/51972

Gary, if you are already under the income and assets tests you can give away as much as you like and it won't affect your age pension. Anything you give away that is above $10,000 a year or $30,000 over 5 years is still counted as part of your assets when calculating your eligibility for the pension. i.e. If you give away $30,000 in a year $20,000 of that is included the the amount of assets you own when calculating your age pension eligibility. If you were already under the assets and income limits before you gave the money away then your pension is not affected.

Two conflicting opinions here, one of them has to be right.

If you are already under the income and assets tests then you cannot afford to gift those sorts of amounts to others

They are not conflicting opinions. Anyone on the age pension can give away $10,000 per year or $30,000 over 5 years. Other than that you cannot deprive yourself of assets in order to become eleiglible for the age pension. So, if you give away extra it is still counted as an asset when calculating eligibility, so it doesn't affect your pension. 

e.g. if your assets are $40,000 over the asset test limit, you can't give away $50,000 and then claim pension eligibility, as your assets will only be counted as having gone down by $10,000 so you are still $30,000 over the limit. But if you are already under the assets limit before you give the money away, you are still under the limit after you've given money away.

To put it another way, anyone on a full or part pension can give away whatever they like, but their assets are only counted as reducing by $10,000 in a year.

So if a part pensioner owned an investment property worth $350,000 and wanted to gift it to their child, they could do so. But $340,000 of the value of the property would still be counted as their asset. They can't claim their assets have dropped by $350,000 so that they get a much larger pension.

If you're under the asset limit and getting the full pension already gifting WILL NOT affect your pension or benefits.

So if you have 300,000 cash and get the full pension you can give away 300,000 and still get your full pension and all the benefits.

The system is made purely to stop people giving away large amounts of money to their kids, for example, and then claiming the pension or more pension. 

What is considered a gift for Centrelink purposes?

For deprivation provisions to apply, a person disposes of an asset or income when they engage in a course of conduct that destroys, disposes of or diminishes the value of their assets or income, without receiving adequate financial consideration in exchange for the asset or income.

Adequate financial consideration can be accepted when the amount received reasonably equates to the market value of the asset. It may be necessary to obtain an independent market valuation to support your estimated value or transferred value or Centrelink may use their own resources to do so.

Deprivation also applies where the asset gifted does not actually count under the assets test. For example, unless the ‘granny flat’ provisions apply, deprivation is assessed if a person does not receive adequate financial consideration when they:

Transfer the legal title of their principal home to another person, or

Buy a new principal home in another person’s name.

What are the gifting limits?

The gifting rules do not prevent a person from making a gift to another person, but cap the amount by which a gift will reduce a person’s assessable income and assets, thereby increasing social security entitlements.

There are two gifting limits as follows:

A person or a couple can dispose of assets of up to $10,000 each financial year. This $10,000 limit applies to a single person or to the combined amounts gifted by a couple, and

An additional disposal limit of $30,000 over a five-financial-years rolling period.

The $10,000 and $30,000 limits apply together, meaning that assets can be gifted up to $10,000 per financial year without penalty, but without exceeding the gifting free limit of $30,000 in a rolling five-year period.

What happens if the gifting limits are exceeded?

If the gifting limits are breached, the amount in excess of the gifting limit is considered to be a deprived asset of the person and/or their spouse. The gift is assessable as an asset for five anniversary years from the date of gifting, and subjected to deeming under the income test. After the expiration of the five-year period, the deprived amount is neither considered to be a person’s asset nor deemed.

Are some gifts exempt from the rules?

Certain gifts can be made without triggering the gifting provisions. Broadly speaking, these include:

Assets transferred between the members of a couple, such as where a person who has reached age pension age withdraws money from their superannuation and contributes it to a superannuation account in the name of the spouse who has not yet reached age pension age.

Certain gifts made by a family member or a certain close relative to a Special Disability Trust.

Assets given or construction costs paid for a ‘granny flat’ interest.

Trying to be too smart by gifting prior to claim

Any amounts gifted in the five years prior to accessing the age pension or other allowance are also subject to the gifting rules.

Deprivation provisions do not apply when a person has disposed of an asset within the five years prior to accessing the age pension or other allowance but could not reasonably have expected to become qualified for payment. For example, a person qualifies for a social security entitlement after unexpected death of a partner or job loss.

I'd like to add too that ANYONE can gift away their assets at any time. I know of a few people who were under the impression that they couldn't gift more than the 10K/30K limits or they'd be in violation of some law.

Fact is anyone can gift their assests, as long as they realise their pension amount may reduce for the following 5 years. After the 5 years their pension would be calculated on their actual on hand assets.

Thank you one and all for your comments and enlightening me. It's a pity the Centrelink staff member couldn't tell me the same things. Cheers

Technically, it can affect your pension in the following scenario. You are below the assets threshold and only just below the income threshold. If your gift is an asset of say $25,000 car to a child your assets drop by $25,000 but Centrelink continues to maintain $15,000 ($25,000 minus the accepted $10,000) for 5 years. Although your Centrelink asset total has dropped by $10,000, the $15,000 is deemed so your Centrelink income total increases. This may put you over the threshold and reduce your pension from the maximum.

Technically, it can affect your pension in the following scenario. You are below the assets threshold and only just below the income threshold. If your gift is an asset of say $25,000 car to a child your assets drop by $25,000 but Centrelink continues to maintain $15,000 ($25,000 minus the accepted $10,000) for 5 years. Although your Centrelink asset total has dropped by $10,000, the $15,000 is deemed so your Centrelink income total increases. This may put you over the threshold and reduce your pension from the maximum.

The deeming on $15,000 is $37.50 / year or $1.44 / fortnight, so unlikely to put someone over the income limit.

Greg

OP = original poster is Gary and it appears he has changed his name to Gazza51

Hence both myself and Fedup addressed him that way.

.... Look at the first 2 comments.