No matter how well intentioned, gifting may positively or negatively impact your Age Pension entitlements because your gift may still count towards your income and assets tests. This also applies if you sell them for less than they're worth.
You can choose to give away any amount. If you go over the value of the gifting free area, it will affect your payment. Any gifts you made in the past 5 years may be included in your income and assets tests. If you aren't required to report your income to us regularly, you must tell us about any gifts within 14 days.
If you or your partner gift money, income or assets, we may assess it in your income and assets tests. Before you or your partner make a gift, contact us to check if it will change your payment. You should call your regular payment line.
You can choose to give away any amount and as many gifts as you like. If the total value of your gifts is more than the value of the gifting free area, your payment may be affected.
The value of the gifting free areas are the same if you're a single person or a couple. They are both: $10,000 in one financial year. $30,000 over 5 financial years - this can't include more than $10,000 in a single financial year.
Gifting limits
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 gifts must not exceed $30,000 in a rolling five-year period.
You must tell us about any lump sum you get, even if you think it's exempt from the income test.
So long as the gift meets the gift limits and other requirements, it falls within 'allowable disposable income'. If a gift exceeds those limits, however, the excess will be assessed as a deprived asset.
Respect the Annual Gift Tax Limit
You are responsible for making multiple gifts totalling $17,000 to people of your choice without paying the gift tax. If you give more than that to any recipient, you will be subject to tax, so you must ensure the gift is under $17,000.
If the total of gifts made in a financial year is more than $10,000, the excess will be assessed as a deprived asset. This is called the $10,000 rule. A maximum of $30,000 can be gifted over a rolling period of 5 financial years, but must not exceed $10,000 in any 1 year to avoid deprivation.
Tell Centrelink
This is really important. You must tell Centrelink with 14 days of receiving the lump sum. If you don't, you could be overpaid, and you will need to repay the money to Centrelink. This could be particularly difficult if you take a long time to tell them and have already spent the money.
To get Age Pension you generally need to have been an Australian resident for at least 10 years in total. For at least 5 of these years, there must be no break in your residence.
Assets Test
A single homeowner can have up to $656,500 of assessable assets and receive a part pension – for a single non-homeowner the higher threshold is $898,500. For a couple, the higher threshold to $986,500 for a homeowner and $1,228,500 for a non-homeowner.
The inheritance won't affect your income or assets test if you put it in a super fund if: you're under Age Pension age. you haven't started drawing on the fund.
As of 2022, any gift under $16,000 isn't typically subject to gift tax and doesn't need to be reported to the IRS. This is due to the annual gift tax exclusion.
Buying a home is an important goal for many Australians, and parents can be keen to lend a hand to help their adult children buy a first home. Two common ways that parents or other family members help out older children is by giving them cash for a deposit or acting as a guarantor for their loan.
Under Australian law, you can give real estate to a relative as an outright gift. When giving ownership to a third party, there is no exchange of money. The gifting process involves filing a Transfer of Land with your title office. Filing a gift deed may also be necessary.
Your gift or donation must be worth $2 or more. If the gift is property, the property must have been purchased 12 months or more before making the donation. The most you can claim in an income year is: $1,500 for contributions and gifts to political parties.
Technically speaking, you can give any amount of money you wish as a gift to one or more of your children or any other member of family. Some parents also choose to buy property and put it into their child's / children's name(s).
There are no inheritance or estate taxes in Australia. However, you may have tax obligations for the assets you inherit: capital gains tax may apply if you dispose of an asset inherited from a deceased estate. income tax applies as usual to any dividends or rental income from shares or property you inherited.
Bank interest reviews. We check your bank account information is up to date. We do this to check we paid you the right payment and amount in the past.
Many people believe Centrelink has access to your bank account and will take it into consideration for your payment rate. This isn't true. Centrelink can't access your bank accounts to determine up to date figures. They're basing your assessment on the last amount you gave them.
The Work Bonus income bank is useful for pensioners who wish to work, particularly those who undertake intermittent or occasional work. Note: from 1 December 2022 to 31 December 2023, a one-off, temporary credit of $4,000 applies to Work Bonus income bank balances.