Gifting some of your assets or retirement savings to assist family,friends or worthycausescan bean excellent way toaidyounger members of your social circle or society at large.
Planning is key, however, if you wish to avoid unintended financial consequences.
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.
What is gifting?
For Centrelink purposes, giftingrefers to sellingor transferringincome or an asset for less than its value or without receiving anything in return. If you receive adequate compensation, it is not considered a gift.
Gifting limits
While you can give awayas much you like, there are limits (gifting free area or thresholds) within which a gift wouldn’t affect your Age Pension benefit.
- 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 five financial years.
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About the author
Aakash Mehta
Aakash Mehta is a financial adviser and has been working in the financial planning profession for more than 7 years. He has an undergraduate degree in commerce, a post-graduate degree in international finance and a diploma in financial planning. His day-to-day work exposes him to real life financial planning issues around superannuation, retirement, insurance and estate planning, and he contributes to SuperGuide by writing case studies and articles on various financial planning strategies.
Learn more about the Age Pension in the following guides:
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