Centrelink & Gifting Rules

What are Gifting Rules?

In your retirement, you may like to make a gift to your children, a family member or a charity. If you receive the Centrelink Age Pension, there are limits on how much you can gift without impacting your Centrelink entitlements.

In other words, you can make a gift, reducing your assessable assets, if it meets these requirements:

• Less than $10,000 in a financial year; or
• Less than $30,000 over a five-year rolling period (current year plus last 4 years).

How does it work?

Singles and members of a couple get the same threshold i.e. a couple combined has a limit $10,000 in one year or $30,000 over 5. If your gift exceeds these thresholds, any amount over will be considered a "deprived asset" and will be counted as an asset for means testing purposes.

A deprived asset is assessed for 5 years from the date of the gift, during which time it may impact a person’s Centrelink entitlements. If the gift is returned, it will reduce the assessable deprived asset value (where applicable).

Inadequate consideration for the sale of an asset can be counted as a gift. The difference between market value and the consideration paid will be included.

What are the benefits?

• Gifting cash or assets within the $30,000 over 5-year limits reduce your assessable assets and may increase your Centrelink entitlements.
• If your Centrelink Age Pension payment increases, you will have more income to help meet your everyday living costs.
• You can assist family members / friends / charities by providing a gift within threshold limits and it won’t impact your Age Pension payment.

What should I be thinking about?

• You will no longer have this cash at your disposal for spending.
  
• You may only receive a small increase in your Centrelink payment relatively to the gift you make. The long-term value of this lump sum is potentially more than the additional payment you will receive.
  
• Centrelink payments are subject to legislative change which may impact the amount of your entitlement in the future.

This information is of a general nature. It does not consider your personal objectives, needs or situation. It does not represent legal, tax or personal advice and should not be taken as such. If it has been provided to you with a Statement of Advice (SoA), you should rely on the personal advice in the SoA.

Care has been taken to provide up to date and accurate information relating to the subject area however BR Advice Pty Ltd (ABN 30 612 056 523, AFSL 488655), Blue Rock Private Wealth Pty Ltd (ABN 95 166 927 055, AFSL 452733), Blue Rock Private Wealth (Melb) Pty Ltd (ABN 48 652 202 698, ASIC AFS No. 1298365) and their representatives make no representation as to its accuracy or completeness.

Published: September 2022.

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