Many people like to help family members financially. While gifting can be a meaningful way to support loved ones, it can also have unintended consequences for current or future Age Pension entitlements. Centrelink has strict rules on how much you can give away without affecting your payments, and exceeding those limits can reduce your entitlement for up to five years.
This article explains how the rules work, what the gifting ‘free areas’ are, and uses an example to show how gifts can stack up over time.
The gifting rules refresher
Centrelink applies deprivation provisions when you give away assets or income for less than market value or don’t receive any consideration in return. If how much you gift is more than the allowed free amount, the excess is treated as if you still had it. This means it continues to count for your assets test, and deeming rules apply, so that income is also assessed on the excess. The key point is that even though you no longer have the money, Centrelink will still count it as a deprived asset for five years from the date of the gift.
How much can you gift?
The free areas are the same for singles and couples:
Up to ten thousand dollars in one financial year.
A maximum of $30,000 over a rolling five-year period, with no more than $10,000 in any single year.
If you gift more than this, the excess is treated a
